Research and analysis

Defined pricing structures in qualifying defence contracts - March 2017

The Single Source Regulations Office has published analysis of the use of the Defined Pricing Structures (DPS) across qualifying defence contracts (QDCs) and qualifying sub-contracts (QSCs).



The Single Source Contract Regulations 2014 (the Regulations) require contractors to provide to the SSRO a cost breakdown of the contract price for a qualifying defence contract (QDC) or qualifying sub-contract (QSC) by a defined pricing structure (DPS). The objective of the DPS is to establish a single, centrally available, comprehensive data set that, in conjunction with other contract data, can be used to determine relationships between costs and outputs, and record the estimated and outturn costs, for every QDC and QSC. This will enable future analysis such as parametric and benchmarking analysis, while assisting effective contract monitoring.

This bulletin presents analysis of the DPS structures reported in 72 QDCs/QSCs that became a QDC/QSC on or before 31 December 2016, and where reports have been received as of 1 February 2017.

The analysis shows that contract cost data was reported using a standard DPS structure in 57 of the 72 QDCs/QSCs analysed (79 per cent), while 15 QDCs/QSCs used a non-standard structure (21 per cent). The majority of QDCs/QSCs (72 per cent) used fewer DPS lines than the SSRO’s statutory DPS guidance suggests in relation to the contract price. The most commonly reported DPS cost categories across all DPS types are Programme Management, System Engineering and Consumables/Fungibles.

Published 30 March 2017