The Single Source Contract Regulations 2014

Contract costs statement

29.—(1) The primary contractor must provide a contract costs statement within 12 months after the contract completion date of the qualifying defence contract.

(2) The statement must contain the following information—

(a) the start and end dates of the contractor’s accounting period;

(b) if there has been any agreement between the contractor and the Secretary of State as to the cost allocation and apportionment methodology to be used in the contract cost statement, a description of that agreement and any deviations from the methodology;

(c) an annual profile of the actual allowable costs, showing—

(i) all purchased items, services and expenses (including payments to sub-contractors) which are direct costs;

(ii) any other direct costs; and

(iii) all indirect costs, showing each cost recovery rate charged and the quantum of the corresponding cost recovery base;

(iv) the total actual costs which the contractor claims are allowable costs;

(d) if there is any variance between the total actual costs (sub-paragraph (c)(iv)) and the costs described in sub-paragraph (c)(i) to (iii), an explanation of the reason for that variance;

(e) if there is any variance between a cost recorded in the most recent information provided in response to a direction under regulation 30(1) or (3)(d) and the amount reported for the same cost in sub-paragraph (c)(i) to (iv), an explanation of the reason for that variance; and

(f) the percentage of the allowable costs included in the statement which are still estimated rather than actual.

(3) Up to 2% of the actual allowable costs required by paragraph (2)(c) may, without explanation, be estimated costs.

(4) 2% or more of the actual allowable costs required by paragraph (2)(c) may be estimated costs, if an explanation is given of—

(a) why it is not possible to provide actual costs at the time the statement is provided; and

(b) when actual costs will be available.

(5) In this regulation—

(a) “direct costs” means costs which—

(i) the contractor claims are allowable costs under the contract; and

(ii) have not been calculated using a cost recovery rate;

(b) “indirect costs” means costs which—

(i) the contractor claims are allowable costs under the contract; and

(ii) have been calculated using a cost recovery rate.