Most UK defence contracts awarded without competition fall under the Single Source Regulatory Framework, which is designed to ensure fair pricing and value for money.
Price changes may arise where the scope of a contract changes, new work is added, or the costs or assumptions used to set the original price need to be updated. 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.
Used well, the new contract pricing amendments guidance should help prevent issues from escalating into disputes, and enable amendments – and the capability they support – to be implemented sooner.
Pricing amendments can be complex – therefore clear guidance helps reduce delays to procurement and avoid unnecessary additional costs. This guidance supports the SSRO’s commitment to continuous improvement, while making the Regulations more accessible for MOD, established suppliers and SMEs.
We have introduced this new guidance in response to MOD and industry feedback and the SSRO’s experience of regularly advising on contract amendments. The guidance aims to help contracting parties to navigate and understand the process of pricing contract amendments; answer common questions; and help the parties resolve issues more quickly and easily.
To help users navigate the guidance, the SSRO has included:
- a quick start guide with key points and links to relevant sections;
- practical examples to explain concepts and common issues;
- references to related SSRO guidance and the Regulations where relevant; and
- clear signposting on where to get further help.
The SSRO is holding a teach-in session for those who have an interest in the guidance – the session will be held on Wednesday 10 June. Details of how to attend can be found on this webpage. Read the new guidance here.