SSRO funding adjustment (step 4)

5.1

Section 17(2) of the Act, and regulation 11(5), set out the requirement for the funding adjustment.

“Deduct the SSRO funding adjustment which is in force at the time mentioned in step 1.”

5.2

The relevant time should be the time of agreement, as defined in regulation 2(1). The SSRO has provided separate guidance that will assist the contracting parties to determine the time of agreement for a particular QDC or QSC.

5.3

A contract profit rate must include the SSRO funding adjustment.

5.4

Section 19(1) of the Act requires the Secretary of State to determine the SSRO funding adjustment for each financial year.

5.5

The SSRO is required annually to review the figures used to determine the contract profit rate for pricing single source contracts. Section 19(2) of the Act requires that, for each financial year, the SSRO must provide the Secretary of State with its assessment of the appropriate SSRO funding adjustment for qualifying defence contracts. The SSRO has published information on its methodology to aid those who may wish to scrutinise or replicate the approach taken.

5.6

Section 19(4) of the Act states that the Secretary of State must publish the SSRO funding adjustment for each financial year in the London Gazette, no later than 15 March in the preceding financial year. The SSRO funding adjustment in force for the financial year commencing 1 April is: