Pricing guidance
In January 2024 the SSRO published new pricing guidance to support the implementation of changes to the single source regulatory framework, which came into force on 1 April 2024. We consulted stakeholders between January and April 2024, seeking feedback on the new guidance. Following consideration of consultation responses we have published updated guidance on:
- Alternative pricing types
- Allowable Costs
- The baseline profit rate and its adjustment
These updated guidance documents provide contracting parties with:
- Support to use alternative pricing methods for contracts which allows non-competitive defence contracts to be priced in new ways. For example, an item can be priced by reference to competitive markets: simplifying and speeding up procurement.
- More flexibility and transparency through broadening the ability for a contract to be split into different components or parts, each with its own profit rate and price (known as componentisation). This allows contract prices to better reflect the risk-sharing between the MOD and defence contractors.
- A rationalisation of how the contract profit rate is calculated, removing two steps from the previous six-step process and simplifying the agreement of contract profit rates.
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