Contract amendments, such as adding or removing goods, works or services, can significantly affect the price of qualifying contracts. The SSRO has issued updated guidance to assist both contractors and the Ministry of Defence (MOD) with redetermining the price of their qualifying contracts when making amendments.
Disputes and delays in agreeing contract pricing amendments can have a direct, negative impact on the timely delivery of vital defence capabilities.
This guidance supports the government’s objectives to strengthen national security and deliver defence outcomes at pace, as set out in the Strategic Defence Review, and to transform procurement and acquisition and forge more effective partnerships with industry, as set out in the Defence Industrial Strategy. By providing a clearer, more consistent approach to redetermining prices when contracts are amended, it helps reduce avoidable friction in commercial discussions and supports faster decision-making.
In particular, the new contract pricing amendments guidance is designed to help parties reach agreement more quickly by clarifying the regulatory requirements, addressing common questions early, and providing practical navigation tools. Used well, the guidance should help prevent issues from escalating into disputes, and enable amendments – and the capability they support – to be implemented sooner.
The Procurement Act 2023 granted new powers to the SSRO to issue guidance it considers appropriate in relation to the application or interpretation of any area of the law governing qualifying defence contracts. We have selected contract amendments for focused guidance in response to MOD and industry feedback that this is an area where additional support would be valuable, as well as the SSRO’s first-hand experience of regularly advising on this topic following queries from contracting parties regarding contract pricing amendments.
This contract pricing amendments guidance is focused on helping parties understand and apply the regulatory requirements for making contract pricing amendments; addressing common asked questions; and enabling swifter and easier resolution of issues for contracting parties.
In developing the guidance, the SSRO has sought to improve the user experience by:
- Creating a quick start guide to highlight the key points and signpost users to the most relevant sections of the full guidance given their circumstances.
- Providing examples to explain key concepts and help with common issues.
- Referencing and linking to related SSRO guidance and Regulations where relevant.
- Better signposting to further information and support.
The guidance will help contracting parties to:
- Understand what a contract pricing amendment is.
- Grasp key concepts that apply to all pricing amendments.
- Identify which scenario(s) apply to their amendment(s).
- Know where componentisation occurs and how to handle multiple amendments.
- Resolve common issues and highlight where to find further support.
This guidance is issued alongside the following SSRO guidance, the latest versions of which should be read in conjunction with this document:
- Guidance on the baseline profit rate and its adjustment – version 8.3
- Guidance on allowable costs – version 7.3
- Guidance on the alternative pricing of contracts – version 1.3
- Guidance on preparation and submission of contract reports
Anyone with an interest in the regulatory framework may wish to review these documents. The SSRO is always interested to hear about the experiences of users of our guidance to help us to understand how it may be further improved.
This guidance applies to qualifying defence contracts and qualifying sub-contracts entered into or amended on and after 1 April 2026.
The SSRO publishes its Responses to Commonly Asked Questions on a quarterly basis. These will be added to the guidance periodically where appropriate.
Independent and authoritative advice on any matter related to the interpretation and application of the regulatory framework can be provided to either contracting party (or both), through the SSRO’s non-referral advice service. Alternatively, referrals to the SSRO can be made for an opinion or determination on such matters. Guidance queries, non-referral advice requests and referral requests should be addressed to helpdesk@ssro.gov.uk.
The following video provides an overview of the contracts amendments guidance:
The video below focuses on pricing amendments to single source contracts, including components priced using the commercial pricing method. Viewing supports Section 4A of the Contract Amendments Guidance and it explains how to apply these pricing amendments within the single source regulatory framework.
