12(1)Section 20 (allowable costs) is amended as follows.
(2)In subsection (2)—
(a)after “qualifying defence contract” insert “, or, where the contract is divided into components, a component of that contract”;
(b)in paragraph (b), after “contract” insert “or component”.
(3)After subsection (2) insert—
“(2A)Single source contract regulations may provide that the requirements set out in subsection (2)(a) to (c) are not met in relation to a cost where the cost arises from profits made by a person connected with the primary contractor.
(2B)The regulations may specify the circumstances in which a person is connected with the primary contractor.”
(4)In subsection (4) after “contract” insert “, or where the contract is divided into components, a component of that contract.”.
(5)For subsection (5) substitute—
“(5)Where a person within subsection (5A) applies to the SSRO for such a determination, the SSRO must determine—
(a)the extent to which a cost is or would be an allowable cost under a qualifying defence contract or a component of such a contract, or
(b)the extent to which a method which is used or may be used to determine a cost under a qualifying defence contract or a component of such a contract would result in that cost being an allowable cost under such a contract or component.
(5A)The following persons are within this subsection—
(a)the Secretary of State;
(b)an authorised person;
(c)a primary contractor under a qualifying defence contract;
(d)a potential primary contractor.”
(6)In subsection (6), for “the contract”, in the first place it occurs, substitute “a qualifying defence contract”.
Commencement Information
I1Sch. 10 para. 12 not in force at Royal Assent, see s. 127(2)
I2Sch. 10 para. 12 in force at 19.1.2024 by S.I. 2024/61, reg. 2(1)(b)(v) (with reg. 3)