Commentary on Sections Part 2: Single Source Contracts Section 13 and Schedule 4: Single Source Regulations Office (“SSRO”)
46.This section provides for the establishment of the SSRO. The SSRO will be classified as a Non-Departmental Public Body (NDPB) and will replace the existing Review Board for Government Contracts, but will have a much greater remit than the Review Board had. The SSRO will act as the regulator for the new framework.
47.There will be a Framework Document setting out the arrangements between the MOD and the SSRO. This document will be publicly available.
48.The initial set-up costs of the SSRO will be funded by the MOD, and the Department will continue to contribute to its funding. However, once in a steady state, up to half of its funding will be provided by deductions from the price payable under contracts which are subject to Part 2. The amount of funding that will be obtained this way will be determined every year by the Secretary of State on the advice of the SSRO and taken from payments made to contractors (see step 4 of the contract profit rate, under section 17).
49.The functions of the SSRO are set out in various places in Part 2. In summary they are:
50.The SSRO will also have the function of providing other assistance or services to the Secretary of State in accordance with arrangements made with the Secretary of State (section 37(1)), but if it does so those will be paid for by the Secretary of State (section 37(2)). The industry contribution described above, which will be deducted at step 4 of the contract profit rate, will not contribute to this work.
51.Subsection (2) sets out the overall aim of the SSRO in carrying out its functions. That aim is to ensure both value for money for the government and a fair and reasonable price for contractors in relation to contracts to which Part 2 applies.
52.Subsection (3) gives effect to Schedule 4, which provides for governance aspects of the SSRO. The Schedule describes the members the SSRO will have, their terms of office, and how they may resign or be removed or suspended from office. It allows the SSRO to employ staff and provides for the remuneration and pensions of employees and members. The SSRO may determine its own procedure, subject to a requirement that when it is exercising certain functions listed in paragraph 10(3) (which include making determinations under specified provisions), this must be done by a committee which includes someone who is neither a member nor an employee of the SSRO (paragraph 10(5)). This is to bring an external view to the determination.
53.Schedule 4 contains other provisions that are standard for an NDPB. It also provides (paragraph 17) that the SSRO is not a servant or agent of the Crown and does not enjoy any Crown status or immunity. Its members and employees are not civil servants.