Qualifying defence contracts

(1)

The Secretary of State may by regulations under this Part (“single source contract regulations”) make provision in relation to qualifying defence contracts.

(2)

For the purposes of this Part, a contract is a “qualifying defence contract” if—

(a)

it is a contract under which the Secretary of State procures goods, works or services for defence purposes [Refer: regulation 3] from another person (a “primary contractor”),

(b)

the value of the contract [Refer: regulation 5] is of or above the amount specified in single source contract regulations [Refer: regulation 6] [before 31 March 2015, £500,000,000; otherwise, £5,000,000],

(c)

the contract does not fall within a description specified in the regulations [Refer: regulation 7] , and

(d)

subsection (3), (4) or (5) applies to the contract.

Info: Section 42(4)(b) requires that regulations made by virtue of subsection (2) must be approved by Parliament.

(3)

This subsection applies to a contract if—

1. the contract is entered into on or after the relevant date [18 December 2014], and
2. the award of the contract is not the result of a competitive process [Refer: subsection (6)] .

(4)

This subsection applies to a contract if—

1. the contract was entered into before the relevant date [18 December 2014],
2. the award of the contract was not the result of a competitive process [Refer: subsection (6)] ,
3. the contract is amended [Refer: Schedule: re-determination of the contract price] on or after that date, and
4. in amending the contract, the Secretary of State and the primary contractor agree that it is to be a qualifying defence contract.

(5)

This subsection applies to a contract, whether entered into before or after the relevant date [18 December 2014], if—

1. the award of the contract is the result of a competitive process [Refer: subsection (6)] ,
2. the contract is amended [Refer: Schedule: re-determination of the contract price] on or after the relevant date [18 December 2014],
3. the amendment is not the result of a competitive process [Refer: subsection (6)], and
4. in amending the contract, the Secretary of State and the primary contractor agree that it is to be a qualifying defence contract.

(6)

Single source contract regulations must make provision for determining whether the award, or amendment, of a contract is the result of a competitive process [Refer: regulation 8] [Refer: regulation 9] .

Info: Section 42(4)(b) requires that regulations made by virtue of subsection (6) must be approved by Parliament

(7)

The Secretary of State may direct that a particular contract to which subsection (3) applies is not a qualifying defence contract even though the contract otherwise meets the requirements of subsection (2).

(8)

In this section, “defence purposes” has the meaning given by the regulations [Refer: regulation 3] .

Info: Section 42(4)(b) requires that regulations made by virtue of subsection (8) must be approved by Parliament

(9)

In this Part—

1. “relevant date” means the date on which the first single source contract regulations come into force [18 December 2014];
2. references to “single source contract regulations” are to be read in accordance with subsection (1);
3. references to a “primary contractor” are to be read in accordance with subsection (2)(a).