About the Independent Review of Single Source Pricing Regulations

Independent Review of Single Source Pricing Regulations

About the Independent Review of Single Source Pricing Regulations

The Minister for Defence Equipment Support and Technology announced an Independent Review of Single Source Pricing Regulations on 26 January 2011. see http://www.mod.uk/DefenceInternet/DefenceNews/DefencePolicyAndBusiness/ModAnnouncesReviewOfSingleSupplierContracts.htm. The Minister has appointed Lord Currie of Marylebone to chair the review of regulations to be used by the Ministry of Defence (MOD) when pricing work procured under single source conditions. Lord [...]

→ Read more

Independent Review of Single Source Pricing Regulations – Consultation Details

TOPIC OF CONSULTATION Consultation is invited on Lord Currie’s recommendations to provide value for money for the taxpayer, foster a culture of efficiency within the defence industry, and provide a fair return for industry. SCOPE OF CONSULTATION The review covers the single source pricing regulations used by the MOD. Please note that this does not [...]

→ Read more

Single Source Pricing Regulations – PDF Document

Provided below is a link to the Single Source Pricing Regulations Document. This document should be used in accompaniment to the Key and Ancillary Recommendations on this site. Single Source Pricing Regulations Document (PDF) . For further information please view the Single Source Pricing Regulations – Consultation Details post or visit the Single Source Pricing MOD web [...]

→ Read more

Key Recommendation 1:

Open book accounting (as defined in the report, see Annex E, paragraph E.152) should be mandated on all single source contracts as a supplement to the Equality of Information provisions that exist under the current single source arrangements.

→ Read more

Key Recommendation 2:

All contracts above a threshold value of £50m should be reported on regularly by the contractor, using a standardised format, with annual certification by the contractor’s Board.

→ Read more

Key Recommendation 3:

DEFCON 648A should be modified from what is currently an overly protective regime to one that more strongly encourages contractors to reduce their cost base. We propose that the current 5% threshold, above which MOD receives automatic sharing, should be increased to 10% or 15%. We also recommend that the 75% MOD sharing arrangement might [...]

→ Read more

Key Recommendation 4:

An Overhead Report should be submitted annually by all contractors with aggregate single source contracts in excess of £100m total value. The report should have two distinct sections: Forward Planning, detailing planned overhead expenditure that will impact the prices of single source contracts; and Overhead Recovery, detailing under/over recovery of overheads on single source work [...]

→ Read more

Key Recommendation 5:

The implicit starting point for the contract profit allowance should be a ‘risk free’ profit rate. Commercial leads should have to justify and movement away from the ‘risk free’ rate using an assessment of the contractor’s risk. The MOD should develop guidance for commercial negotiators to follow in assessing the extent of the allowance that [...]

→ Read more

Key Recommendation 6:

The Single Source Regulations Office (SSRO) should provide an independent review of the realism of budgets allocated to single source contracts to provide assurance to the MOD that single source contracts are in financial control.

→ Read more

Key Recommendation 7:

The Review Board should be replaced by a SSRO with a remit to scrutinise single source defence procurement. The SSRO would define and maintain a framework that encourages efficiency and value for money in MOD single source procurement. It should be an independent Non-Departmental Public Body, sponsored by the MOD. After appropriate consultation, the SSRO [...]

→ Read more

Next Page »