The Defence Reform Act 2014 (the Act) and the Single Source Contract Regulations 2014 (the SSCR) set out a regulatory framework for pricing, recordkeeping and reporting in contracts for goods, works and services above £5M in value that are placed by the Ministry of Defence without competition (known as Qualifying Defence Contracts or QDCs). They also apply to single-source sub-contracts to QDCs above £25M in value (known as Qualifying Sub-Contracts or QSCs).
The Single Source Contract (Amendment) Regulations 2018 (the 2018 Amendment Regulations) came into effect on 1 August 2018, making four key changes to the categories of contracts that are excluded from being QDCs or QSCs[1]:
- Contracts made within an international cooperative defence programme can now be included if agreed by the parties to the contract
- Contracts for intelligence activities are no longer excluded
- There is a new exclusion on national security grounds
- Contracts which effectively transfer an existing contract to a new party on materially the same terms are now excluded
This article summarises the changes and offers some observations on what they mean in practice for MoD and contractors.
[1] Regulation 58 of the SSCR also sets out additional criteria that are relevant where a sub-contract is entered into only partly for the purpose of enabling performance under a QDC.
[2] Regulation 58 of the SSCR also sets out additional criteria that are relevant where a sub-contract is entered into only partly for the purpose of enabling performance under a QDC.
Get in touch
Please contact Chris Chesterman or Melissa Walford if you would like to discuss any of these changes or what they mean for your contracts.
Read the other articles in this series
Update to the Single Source Contract Regulations 2014: New rules for pricing amendments to QDCs
Update to the Single Source Contract Regulations 2014: New reporting requirements for contractors