Defence Reform Act 2014

18 Contract profit rate: supplementary

(1) The Secretary of State or an authorised person, and the primary contractor, must have regard to guidance issued by the SSRO in relation to any of the steps set out in section 17(2).

(2) Single source contract regulations may—

(a) disapply the requirement to take any or all of steps 2 to 6 in section 17(2) in relation to a qualifying defence contract the value of which is less than the amount specified for the purposes of this paragraph;

(b) provide for any or all of those steps to apply in relation to such a contract with modifications set out in the regulations;

(c) where the Secretary of State is a party to a group of qualifying defence contracts with the same primary contractor, provide for section 17(2) to apply in relation to those contracts—

(i) taken together or individually, and

(ii) with such modifications as may be set out in the regulations.

(3) Single source contract regulations may provide that the SSRO—

(a) may, on an application by a person within subsection (4), determine whether the amount of an adjustment agreed under step 2, 3 or 6 in section 17(2) is appropriate;

(b) may, in consequence of a determination by virtue of paragraph (a) that the amount of such an adjustment is not appropriate, determine that the price payable under the contract is to be adjusted by an amount specified by the SSRO.

(4) The following persons are within this subsection—

(a) the Secretary of State,

(b) an authorised person, and

(c) the primary contractor.