ADS are once again holding a Defence Commercial Workshop training session due to popular demand.

Single source defence contracts for the UK are regulated by law within a Single Source Procurement Framework established by Part 2 of the Defence Reform Act 2014. The law governs how contracts are priced, costed, what profit is allowed and how pricing mechanisms work and gives MOD significant open book access to the contractor's data. There are penalties for non-compliance. It is possible for contract prices to be re-set up to two years after contract completion. Understanding the rules is therefore vital to ensure a price is valid and will withstand scrutiny.

Benefits of Attending:

  • Understanding pricing, negotiating, costing and reporting on single source contracts that are subject to the Defence Reform Act
  • Opportunity to understand the latest regulations and statutory guidance

Workshop content includes:

  • The Regulatory Framework
  • Review of when legislation applies
  • The pricing formula, allowable costs and profit calculation
  • Pricing contract exchanges
  • Converting pre-existing contracts to qualifying contracts
  • Records, MOD access rights, confidentiality
  • Reports and reporting
  • Compliance, SSAT, SSRO, its powers and responsibilities
  • Current issues relating to the Act, Regulations and statutory guidance, and prospective changes
  • Treatment of contracts outside the Act

The pricing formula:

  • Review of the latest allowable cost rules, and possible changes in the next update
  • Review of contract profit rate risk and incentive adjustments
  • Review of cost, contingency and risk estimation requirements and implications for suppliers
  • Recent legislative changes and possible changes for the next review
  • Pricing of sub-contracts and changes
  • Potential for lower value contracts and contracts for indirect articles to become qualifying contracts
  • Proprietary item pricing

Workshop leaders:

The course is led by Tim Watkins and David Scillitoe.

Tim is a Chartered Accountant who has 20 years. experience in senior finance positions within major UK defence companies. Tim was involved in the industry team working with the MOD and Review Board maintaining the Yellow Book arrangements. Tim now acts as an industry Technical Advisor on Defence Reform Act (DRA) regime and was involved in the development of the DRA with the MOD. He now provides training and advice either directly to companies or to industry through ADS.

David is a commercial advisor, with more than 30 years' experience in senior advisory positions within major UK defence companies. David has supported the industry team engaged with MOD on costing and pricing policy matters since 1989; acting at its commercial advisor for the Yellow Book arrangements and for the pre- and post-legislative consultations and developments on the Single Source Procurement Framework.