• Test 1

Expertise - UK Ministry of Defence Single Source Contracts

Metasums has provided technical support to major UK defence contractors and UK trade associations throughout the period of change to the recently implemented single source pricing reforms required by the Defence Reform Act.

Terry Hersey is a chartered management accountant with 40 years’ experience gained in senior finance posts within major defence contractors. An unrivalled industry based understanding of the accounting requirements of the existing framework arrangement, the new commercial frameworks, and the recently implemented law.

Metasums can assist in you getting ready and safe.

Each contractor needs to become fully conversant with the MOD ASG website if he is to understand his rights and obligations that relate to non-competitive contracts. The site is constructed by MOD to inform its own commercial, accounting and procurement staff and is largely open to access by contractors and the general public. The ASG contains commercial guidance to MOD staff that sometimes looks to be indistinguishable from an instruction. The site also gives access to existing and retired DEFCONs and DEFFORMs. For contractors who already have or are preparing for contracts placed under the new legal framework it will be particularly important to be able to distinguish between (1) regulations (approved by Parliament), (2) statutory guidance (prepared and issued by the SSRO) and (3) MOD commercial guidance which has no status in law. MOD guidance on the ASG to its Officers is only as good as far as it goes; the guidance is often superficial and does not address many areas that could represent significant risk to contractors.

The Defence Reform Act introduces significant changes to the pricing and reporting of all new Single Source contracts. The changes are significant and apply to contracts and contractors and group companies undertaking larger single source contracts regardless of their location or ownership. The Defence Reform Act (DRA) can be found here and regulations can be found here

Regardless of the framework applicable to a contract or a contractor MOD expects to pay a fair and reasonable price for goods or services it acquires from contractors. When the contract or the contractor is subject to the single source pricing regulations (SSPRs) the law has to be followed by MOD and the contractor. The contractor needs to understand and ensure compliance with the new and revised arrangements to make this happen.