Annual Compliance Report 2023
This report presents the SSRO's review of compliance with reporting requirements, by defence contractors, under the regulatory framework for single source defence contracts.
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The regulatory framework for single source defence contracts requires contractors to submit a range of statutory reports to the Ministry of Defence and the SSRO. The 2022/23 report examines the timeliness and quality of reports submitted to the SSRO’s Defence Contract Analysis and Reporting System (DefCARS) for qualifying defence contracts and qualifying sub-contracts entered into between 1 April 2022 and 31 March 2023.
Under this regulatory framework, defence contractors must submit a range of vital information to the MOD and the SSRO, including estimated and actual costs, profits and overheads in non-competitive defence contracts. The data we hold provides a significant, growing resource, with over 1400 individual reports being expected each year. This data can be used to support contract management; and produce reports and analysis to drive better defence procurement. But submissions which are made with gaps or are of poor quality limit the usefulness and the usability of the data.
The report finds that though there has been some improvement from last year only 65 per cent of reports expected during 2022/23 were submitted in accordance with the reporting timeframes set out in the Regulations and only 48 per cent of reports met the quality threshold on first attempt. Both of these are below the SSRO’s KPI of 75 per cent.
The SSRO’s Chief Executive, John Russell, says
Defence contractors are required to submit reports into our DefCARS database, and it’s essential that these reports are submitted on time and that they’re correct. Good quality, current data helps the MOD to manage their contracts and suppliers, and ultimately supports better procurement - ensuring good value for money for the UK taxpayer and a fair and reasonable price for defence contractors.
We have a statutory role in monitoring compliance against reporting requirements, and we play an active part in assisting contractors to make submissions and in helping the MOD to use the data.
Our annual Compliance Report shows some improvement in timeliness and quality in 2022/23, but we would expect to see more progress going forwards. In the absence of such progress, and where we identify material levels of non-compliance, we will carefully consider what further steps we can take to drive the necessary change.
The MOD’s Director General Commercial, Andrew Forzani, says:
The Defence Command Paper has set out that the Department will put data exploitation at the heart of our procurement, and compliance with the Single Source Contract Regulations is an important component in ensuring delivery teams have the data needed to proactively manage our single source contracts.
The SSRO continues to support industry to comply with their statutory reporting requirements through the provision of our reporting guidance, delivery of training and development of our reporting system and the report contains several recommendations highlighting how the SSRO, the MOD and Defence Contractors can all play a part in driving increased levels of compliance and enable better use of data within the regime. These include the need for the MOD to develop the ‘acquisition pipeline’ to better identify new qualifying contracts; for the SSRO’s work on data utilisation to continue with more MOD teams; and for contractors to take greater care when completing report submissions, especially with basic information relating to the contract.