The Single Source Regulations Office (SSRO) is using its new
power to issue guidance: focusing on helping contracting parties
better navigate the final price adjustment, which protects from
excess profits and losses.
Following recent legislation (the Procurement Act 2023), the SSRO
is no longer confined to issuing guidance only on specific areas
of the single source contracting legislation but can now issue
guidance in relation to the application or interpretation of any
area. We are conducting a consultation on the development of new
guidance regarding the ‘Final Price Adjustment (FPA)' in response
to feedback from stakeholders, who have told us that it is an
area where they would appreciate additional support. The guidance
we are consulting on will be used by parties to resolve common
issues and enable swifter and easier resolution.
The FPA allows the contractor or the Ministry of Defence to share
excess profits or losses that result from a contract, rather than
having them fall solely on one of them. The FPA is
generally used towards the concluding stages of a contract.
However, should parties become aware during earlier stages that
there are likely to be excess profits or losses then they should
discuss use of the FPA at this stage. The guidance provides
further detail as to when and how the FPA might be used.
To further strengthen our guidance, we have incorporated
real-world scenarios to help users understand and resolve common
issues, as well as signposting within the guidance the relevant
Regulations and instructions on how to contact the SSRO for
additional support. We plan to use our new powers to issue more
guidance in a broader range of areas particularly where
stakeholders tell us they would like more support.
The consultation runs
until 14 November.
