Single Source Contract Regulations
Part 2 of the Defence Reform Act 2014 (DRA) creates a framework for regulating defence contracts and sub-contracts which have not been competed. These are known as single source contracts (SSCs). Such contracts account for about half of MOD procurement spend, which is equivalent to over £8 billion per year. The Single Source Contract Regulations 2014 (S.I. 2014/3337) (SSCRs), made under the DRA, are engaged when a defence contract is awarded with a value over £5 million without any competition, unless one or more of the specific exclusions set out in the SSCRs apply. These are known as qualifying defence contracts (QDCs) or qualifying sub-contracts (QSCs). There is a general power under section 14(7) of the DRA for the Secretary of State to direct that a particular contract which would otherwise meet the requirements should not be subject to the SSCRs. The DRA does not specify whether a contract should be competed.  Where the DRA and SSCRs are engaged they make provision for the pricing of SSCs. They also make provision for transparency and record-keeping requirements, from the beginning of an SSC to its completion.  The DRA also creates an arm’s length body, the Single Source Contracts Office (the SSRO) which issues guidance on the application of the regime and adjudicates on disputes between the Secretary of State and contractors.
	The Government set out its broad policy objectives for reform of the regulatory regime in the DRA and SSCRs in a Command Paper published on 4 April 2022 (Defence and Security Industrial Strategy: Reform of the Single Source Contract Regulations). 1 This set out changes centred around three main themes: providing greater choice and flexibility in procurement; speeding-up and simplifying the procurement process and promoting innovation. It also included several technical changes designed to address problems that have been identified during the eight years over which the regime has been operating. Delivery of the reform will require amending the DRA (which is achieved by way of a Schedule to the legislation), amending existing or creating new secondary legislation, and changes to Statutory Guidance issued by the SSRO.