Defence procurement contract review checklist

1Award and the regime

1. Which regime governs the contract: the Procurement Act 2023, legacy Defence and Security Public Contracts Regulations, the FAR and DFARS, or a buyer's own terms?

   The regime decides the award procedure, the remedies a losing bidder has, the terms implied into the contract and the grounds for excluding the supplier later.

   legislation.gov.uk: Procurement Act 2023, section 7 (defence and security contracts)

   Key term: Award route and challenge

2. Has the standstill period ended, and is any challenge to the award still possible?

   A contract signed during standstill, or under challenge, can be set aside. Lenders and buyers should not treat the revenue as secure until the period has passed.

   legislation.gov.uk: Procurement Act 2023, section 51 (standstill periods)

3. Is it a single source contract within the Defence Reform Act 2014, so that price is set by the statutory formula and the SSRO's rates?

   Profit is capped by the contract profit rate, costs must pass the allowable costs test and the contract carries reporting duties. That shapes margins and the cash a lender can rely on.

   legislation.gov.uk: Defence Reform Act 2014, section 15 (pricing of single source contracts)

   Single source pricing tracker and calculator

4. For a US contract, must certified cost or pricing data be given, and does the defective pricing exposure sit with the seller after a sale?

   Truthful Cost or Pricing Data Act exposure survives the deal. Ask for the certificates and any defective pricing audits in diligence.

   Acquisition.gov: FAR 15.403-4 (certified cost or pricing data)

   Key term: Pricing and profit