Grounds for referral to the SSRO

Contents: This section of the SSRO's guidance summarises the matters that may be referred to the SSRO.

Grounds for determinations

The table below summarises the matters the SSRO may be asked to determine and whether it has a power or a duty to do so. It identifies the person or persons who may make a reference to the SSRO and any time limits which apply. If there are any procedural requirements that apply to a ground, these are also identified.

Ground	Function	Referring parties	Time limit	Procedural requirements
Adjustment of price payable in a target price contract (section 16(2)(b))	The SSRO must determine the amount of any adjustment	Secretary of State, authorised person or primary contractor	—	—
Adjustment under step 2, 3 or 6 of Contract Profit Rate calculation (section 18(3) and regulation 18)	The SSRO may determine the amount of the adjustment in section 17(2) (contract profit rate) and in consequence may determine that the contract price is to be adjusted by a specified amount.	Secretary of State or primary contractor	Within two years after the contract completion date	—
Extent to which a cost is an Allowable Cost (sections 20(5), 20(6) and regulation 19)	The SSRO may determine the extent to which a particular cost is an Allowable Cost under a qualifying defence contract. Consequent to such a determination, the SSRO may determine an adjustment to the contract price	Secretary of State, authorised person or primary contractor	20 working days from date of written notice	Before a reference is made by the Secretary of State to the SSRO, a written notice must be sent to the primary contractor requiring it to show that the costs are AAR. The Secretary of State must allow at least 20 working days to elapse from the date of the notice and there must have been no response or no satisfactory response from the primary contractor. The same pre-conditions do not apply to a reference made by the primary contractor.
Final Price Adjustment (section 21(3)(b) and regulation 16)	The SSRO must determine the total price payable where the Secretary of State and the primary contractor are unable to agree the final price adjustment	Secretary of State, authorised person or primary contractor	After the contract completion date, but no later than 2 years after the contract completion date.	Reference should only be made to the SSRO where the parties have been unable to agree the final price adjustment. One of the parties must have notified an intention to make a final price adjustment, which should be within 3 months of a contract costs statement being provided. The Secretary of State may have to notify a final price adjustment within 15 months of the contract completion date if that date is sooner than 3 months from provision of the contract costs statement.
Penalty notice matters (section 32(8))	The SSRO must make a determination, on receipt of an application, as to: whether the person has contravened section 31 or failed to take the steps specified in a compliance notice (or both); whether the person had a reasonable excuse for contravening section 31 or failing to take the steps specified in the compliance notice (or both); and the amount of the penalty.	Recipient of the penalty notice	Before the end of the period of 6 months from the date the penalty notice is given (section 32(6)(f))	—
Prescribed matters (section 35(1)(b) and regulation 52)	The SSRO must make a determination on matters prescribed in the Regulations in relation to a qualifying contract, being the defined pricing structure and output metrics that the contractor must use in all reports provided under Part 5 of the Regulations for that contract	Secretary of State, authorised person, primary contractor (in the case of a QDC), or the person who proposes to enter into the contract with the Secretary of State (in the case of a proposed contract)	For QDCs by virtue of section 14(3) of the Act no later than 6 months after: the date the QDC is entered into; or the date the QDC is subsequently amended, where that amendment affects the prescribed matters. For QDCs by virtue of section 14(4) or 14(5) of the Act no later than 6 months after: the date the contract became a QDC; or the date the QDC is subsequently amended, where that amendment affects the prescribed matters.	—
Pre-scheme referral (section 35(7) and regulation 55)	The SSRO must give a determination if (i) a contract was entered into before 18 December 2014 and the contract required the Review Board for Government Contracts to make a determination in relation to any matter referred to it; and (ii) a party to the contract refers the matter for determination after 18 December 2014.	A party to the contract	No later than 2 years after: the date described in the contract as the contract completion date; if no such date is described in the contract, the date on which the contractor completes all obligations which entitle it to final payment under the contract; or if the contract is terminated before either of the dates described in (a) or (b), the date that the contract is terminated.	—

The SSRO's referral procedures for determination and the grounds summarised in the table apply to qualifying sub-contracts (and sub-contractors) as they apply to qualifying defence contracts (and primary contractors), but subject to the modifications set out in Regulation 64, which include that:

In respect to the Adjustment of price payable in a target price contract ground, the referring parties include the contracting authority and the sub-contractor, instead of the primary contractor;
In respect to the Prescribed Matters ground, the referring parties include the Contracting Authority (in the case of a qualifying sub-contract) and the person who proposes to enter into the qualifying sub-contract (in the case of a proposed qualifying sub-contract). In this regard “Contracting Authority" means the party which is, or would be, liable to pay the contract price under a qualifying sub-contract; and
In respect to the Adjustment under step 2, 3 or 6 of Contract Profit Rate calculation ground, the effect of the referral is that the SSRO may determine that a payment of a specified amount must be made to or by the Secretary of State

In addition to determinations, there are two other types of referral covered by those procedures, which are summarised in the table below. These are covered within the guidance because the determinations process is considered to be broadly applicable. The SSRO will apply the guidance to such referrals, subject to modification where appropriate.

Ground	Function	Referring parties	Time limit
Conduct in accessing records (section 23(6) and regulation 21)	The SSRO may on an application by the record-keeper in relation to a qualifying contract review the way in which the Secretary of State or an authorised person has acted in examining records, requiring copies of records or requesting further information or explanation relating to relevant records.	Record-keeper	No later than 3 months after the duty to keep the relevant records ends.
Disapplication of requirements to give information for confidentiality (section 27(3) and regulation 47(3))	In circumstances where a person intends not to comply with a requirement to permit examination of records, to make reports or to notify relevant events, circumstances or information, the Secretary of State may refer the matter to the SSRO and the SSRO must investigate whether an obligation of confidentiality (which has been relied upon to support the non-compliance) has been entered into otherwise than for genuine commercial reasons.	Secretary of State or an authorised person	Within 40 working days of receiving the person's notice that they intend not to comply

Grounds for opinions

The table below summarises the matters the SSRO may be asked to give an opinion on and whether it has a power or a duty to do so. It identifes the person or persons who may make a reference to the SSRO and any time limits which apply.

Ground	Function	Referring parties	Time limit
Prescribed matters (section 35(1)(a) and Regulation 51)	The SSRO must give an opinion on matters prescribed in the Regulations relating to a QDC or a proposed QDC, being: (a) the appropriate amount of adjustment in steps 2, 3 or 6 of contract proft rate calculations; (b) the appropriate amount of a group cost risk adjustment, group POCO adjustment, or group capital servicing adjustment; (c) any question relevant to the cost recovery rates to estimate likely allowable costs; and (d) the extent to which a particular cost would be an allowable cost. and, in respect to qualifying defence contracts only: (e) whether the Secretary of State has acted unreasonably in exercising a power to require the contractor to provide information in an on-demand report.	Secretary of State, authorised person, primary contractor (in the case of a QDC), or the person who proposes to enter into the contract with the Secretary of State(in the case of a proposed contract) In relation to ground (e), only the primary contractor.	Grounds (a) to (d): none In relation to ground (e), within 3 months of receiving written direction by the Secretary of State.
Joint referral (section 35(3) and Regulation 53)	The SSRO may give an opinion on any matter relating to a QDC or proposed QDC if both the Secretary of State and the primary contractor (in the case of a QDC) or the other proposed party to the contract (in the case of a proposed QDC) make the referral.	Secretary of State and primary contractor (or the other proposed party to the contract) jointly	No later than 2 years after the contract completion date
Pre-scheme referral (section 35(7) and Regulation 55)	The SSRO must give an opinion if (i) a contract was entered into before 18 December 2014 and the contract required the Review Board for Government Contracts to give an opinion in relation to any matter referred to it; and (ii) a party to the contract refers the matter for opinion after 18 December 2014.	A party to the contract	No later than 2 years after: (a) the date described in the contract as the contract completion date; or (b) if no such date is described in the contract, the date on which the contractor completes all obligations which entitle it to final payment under the contract; or (c) if the contract is terminated before either of the dates described in (a) or (b), the date that the contract is terminated.

This guidance and the grounds summarised in the table above applies to qualifying sub-contracts (and sub-contractors) as they apply to qualifying defence contracts (and primary contractors), but subject to the modifcations set out in Regulation 64, which include that:

in respect to the Prescribed Matters ground, the referring parties include the Contracting Authority (in the case of a qualifying sub-contract) and the person who proposes to enter into the qualifying sub-contract (in the case of a proposed qualifying sub-contract). In this regard “Contracting Authority” means the party which is, or would be, liable to pay the contract price under a qualifying sub-contract; and
in respect to the Joint referral ground, the referring parties include the proposed subcontractor (in the case of a proposed qualifying sub-contract) instead of the “other proposed party to the contract”.

Appeals against assessment as a qualifying sub-contract

The table below summarises the main regulatory provisions concerning an appeal against a QSC assessment. It identifes the person or persons who may make a reference to the SSRO and any time limits which apply.

Ground	Function	Referring parties	Time limit
Appeal against positive assessment (section 29(5) and Regulation 62)	The SSRO must determine an appeal against an assessment that a proposed contract or subcontract would be a QSC if entered into.	A prospective sub- contractor (reg62(1) and (2)).	(a) The notice of appeal is to be received by the SSRO no later than six months after the person bringing the appeal received the notice of assessment (reg 62(5)(b). (b) No appeal may be brought after the proposed contract is entered into (reg 62(3))

Notices of cessation as a qualifying sub-contract

The table below summarises the main regulatory provisions concerning a notice of cessation. It identifes the person or persons who may make a reference to the SSRO and any time limits which apply.

Ground	Function	Referring parties	Time limit
Cessation of application of Part 2 of the Act and the Regulations to qualifying subcontracts (section 30(4) and Regulation 63)	The SSRO must decide to either overrule or uphold a notice of cessation, subject to whether the conditions in regulation 58(3) or 58(4) are met	The sub-contractor to the qualifying sub-contract (reg 63(1)	The notice must be received by the SSRO no later than the contract completion date of the qualifying sub-contract (reg 63(2)(a))

Note: The annotations on this page are applied to underlying text taken from the SSRO's referrals guidance, available at ssro.gov.uk. Errors or ommisions can occur, or updates may not be reflected. Always check the source document.