Guidance

13. User guide for qualifying business unit estimated cost analysis report

This user guide, template and glossary are discontinued since the launch of the new DefCARS on 15 March and are therefore for reference purposes only.

Documents

Qualifying business unit estimated cost analysis template

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Details

The purpose of the qualifying business unit estimated cost analysis report (QBUECAR) is to facilitate a trend analysis of qualifying business unit (QBU) costs year on year.

The report helps the SSRO and the MOD understand the reasons for variance and to facilitate the development of defence cost benchmarks to compare across QBUs within suppliers and between suppliers.

The minimum value of the qualifying defence contract or qualifying subcontract for the reporting requirement to be imposed is:

  • £20 million for the financial years ending on 31 March 2016 and 31 March 2017; or
  • £50 million for subsequent financial years.

The cost analysis reports provide analysis of costs at business unit (BU) level. This report:

  • records estimated costs for the relevant accounting period (comprising total costs less materials) against standard categories;
  • compares estimated costs against prior period actuals;
  • provides an explanation of key variances between estimates and prior period actuals;
  • provides details of forecasted employee numbers and site metrics;
  • provides a summary of forecasted key cost activities;
  • provides a summary of business unit revenue by main contract types;
  • provides details of estimated recovery rates and bases; and
  • provides prior notification of future initiatives that will impact recovery rates.

The contractor must provide the QBUECAR:

  • for a pricing QBU, with the actual rates claim report for that pricing QBU; and
  • for a non-pricing QBU:
    • three months after either:
      • the end of the relevant accounting period; or
      • the date on which the ongoing contract condition was first met in relation to the relevant financial year, whichever is the later;
    • if the designated person and the Secretary of State agree a date which is within three months after the end of the period described in paragraph above, by that date.

Note: a non-pricing QBU is a BU that incurs costs that are not apportioned directly to any QDC(s) / QSC(s), but to other BUs (for example Head Office).

Published 1 April 2016