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Defence Reform Act 2014

Section 23: Records

80.Subsection (1) requires the SSCRs to contain provision requiring contractors to keep relevant records (whether in hard or electronic form). The records required to be kept include those that enable the MOD to verify the estimates used in pricing, to ensure that contractors are complying with their Part 2 obligations (in particular in relation to reports made under sections 24 and 25 and in relation to sub-contracts) and to better understand how costs are being managed and whether performance indicators are being met. The Secretary of State (or an authorised person) will have access to those records (subsection (5)). This underpins many other provisions of this Part, for example for contractors to demonstrate under section 20(4) that a cost claimed is an allowable cost, or in the event of a referral to the SSRO under section 32(8).

81.The period which those records should cover will be specified in the SSCRs (subsection (4)) and, for records relevant to pricing (as set out in the SSCRs), will include the period before the QDC was entered into. This is necessary to allow for the auditing of the contract pricing procedure. The persons who will be subject to this duty are contractors who are party to a QDC, but also persons other than contractors who are subject to the reporting requirements of section 25.

82.The SSCRs will make provision for the inspection of these records by the Secretary of State (or an authorised person), including the times at which such examination may be made and the notice that must be given, and the right to require copies (subsection (5)).

83.Failure to comply with this section may lead to a financial penalty under sections 31(3)(a)(i) and 32.

84.A person who is required to keep records, and to provide access to those records, may ask the SSRO to review the way that the Secretary of State (or the authorised person) has exercised their functions under this section. If the SSRO is of the view that the Secretary of State or the authorised person has behaved unreasonably, it may make a declaration to that effect (subsections (6) and (7)).

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