Compliance

(1)

The Secretary of State may give a person a compliance notice if the Secretary of State thinks—

1. that the person has contravened this section, and
2. that there are steps that can be taken by the person to remedy the contravention.

(2)

A compliance notice is a notice which—

1. specifies those steps, and
2. directs the person to take them.

(3)

A person (“P”) contravenes this section if—

1. P fails to comply with one or more specified [Refer: regulation 48] requirements imposed by virtue of—
1. section 23 (duty to keep accounting and other records), or
2. section 24 or 25 (reports),
2. P provides a specified [Refer: regulation 48] report under section 24 [Reports on qualifying defence contracts] that is misleading in a material respect and P—
1. knows that the report is misleading, or
2. is reckless as to whether the report is misleading,
3. P fails to comply with the duty under section 26 (duty to notify Secretary of State of occurrence etc of a relevant event),
4. in circumstances where P is required to make an assessment under section 29(1) [Determining whether a contract is a qualifying sub-contract] or (3) in respect of a proposed contract, P fails to make such an assessment,
5. P makes a negative assessment under section 29(1) or (3) in respect of a proposed contract and the Secretary of State believes that that assessment is incorrect, or
6. in circumstances where P is required to give the notice mentioned in section 29(2)(b) or (4)(b) in respect of a proposed contract, P fails to give such a notice.

(4)

In subsection (3)—

1. “specified” means specified in single source contract regulations;
2. “negative assessment” means an assessment that the proposed contract would not be a qualifying sub-contract if it (and, in a case within section 29(3), the proposed qualifying defence contract) were entered into.

(5)

A compliance notice must be given before the end of the period specified in single source contract regulations [Refer: regulation 49] .

(6)

A compliance notice must—

1. give details of the contravention,
2. specify the period within which the steps specified in the notice must be taken, and
3. state that, if P fails to take those steps, the Secretary of State may give P a penalty notice under section 32.

(1)

The Secretary of State may give a person a penalty notice in the cases set out in subsections (2) and (3).

(2)

The first case is where the Secretary of State thinks that the person—

1. has failed to take the steps specified in a compliance notice, and
2. does not have a reasonable excuse for the failure.

(3)

The second case is where—

1. the person has contravened section 31, and
2. the Secretary of State does not think that there are steps that can be taken by the person to remedy the contravention.

(4)

A penalty notice is a notice requiring the person to pay a penalty to the Secretary of State before the end of the period of six months beginning with the date on which the notice is given.

(5)

A penalty notice must be given before the end of the period specified in single source contract regulations [Refer: regulation 49] .

(6)

A penalty notice must—

1. specify the contravention to which the notice relates,
2. state the amount of the penalty (as to which, see section 33),
3. specify the date by which the penalty must be paid (subject to subsection (8)),
4. specify how the penalty may be paid,
5. give details of the interest that would be payable by virtue of section 34(2) in relation to any part of the penalty that is unpaid after the date specified under paragraph (c), and
6. explain how the person may apply to the SSRO, before the end of the period mentioned in subsection (4), for a determination of any of the matters mentioned in subsection (7).

(7)

Those matters are—

1. whether the person has contravened section 31 or failed to take the steps specified in a compliance notice (or both);
2. whether the person had a reasonable excuse for contravening section 31 or failing to take the steps specified in a compliance notice (or both);
3. the amount of the penalty.

(8)

Where a person applies to the SSRO for a determination of a matter mentioned in subsection (7)—

1. the SSRO must determine the matter and the penalty is not payable until it has done so,
2. in determining the matter, the SSRO may—
1. substitute its own decision for any decision of the Secretary of State (and may vary the amount of the penalty or cancel the penalty notice), and
2. state the date by which the penalty must be paid (except where the SSRO cancels the penalty notice), and
3. the SSRO's determination is final.

(9)

A penalty notice may specify circumstances in which a penalty of a reduced amount specified in the notice is payable.

(10)

Single source contract regulations may replace the time limit for the time being specified in subsection (4) [the regulations do not].

(1)

Where the Secretary of State gives a person a penalty notice in relation to a contravention of section 31, the amount of the penalty must not exceed the amount for the time being specified in relation to the contravention in single source contract regulations [Refer: regulation 50] .

(2)

Subsection (1) does not apply where the Secretary of State gives a person a penalty notice in relation to a contravention within section 31(3)(b) or (c); and in such a case the amount of the penalty is to be calculated as if the contravention were a breach of contract (and is to be calculated in accordance with the general law of contract having effect in England and Wales).

(3)

In determining the amount of a penalty under section 32, the Secretary of State must have regard to guidance issued by the SSRO.

(4)

The SSRO must publish guidance issued under subsection (3) in such manner as it thinks appropriate.

(5)

Subsections (1) to (3) apply in relation to any determination by the SSRO by virtue of section 32(8)(b) as to the amount of a penalty as they apply to the Secretary of State.

(6)

The provision that may be made under subsection (1) by virtue of section 42(2) includes power to specify penalties of different amounts according to the value of the contract [Refer: regulation 5] to which the contravention relates.

(1)

This section applies where the Secretary of State has given a penalty notice to a person.

(2)

If all or part of the penalty is not paid before the payment date, the unpaid balance carries interest from that date at the rate for the time being specified in section 17 of the Judgments Act 1838 [8 percent per annum].

(3)

The “payment date” is the date by which the penalty must be paid, as stated in the penalty notice.

(4)

But where the SSRO, in determining a matter mentioned in section 32(7), states a new date by which the penalty must be paid, the “payment date” is that new date.

(5)

The Secretary of State may recover from the person as a debt due to the Secretary of State the unpaid balance and any unpaid interest.