Defence Reform Bill

The above-named Lords give notice of their intention to oppose the Question that Clause 13
stand part of the Bill.

Page 40, line 18, at end insert “and ratified by the House of Commons Defence
Select Committee,”

Page 43, line 22, leave out sub-paragraph (5) and insert—

“(5)     A majority of members of such a committee must be persons who are not
members or employees of the SSRO.”

Page 10, line 22, at end insert “provided the stipulation in subsection (7A) below is
satisfied”

Page 10, line 22, at end insert—

“(7A)    Before the direction may take effect, the Secretary of State shall report to
Parliament regarding the intended direction and shall provide full details
in support of his decision and the grounds on which such decision was
taken.”

Page 13, leave out line 19 and insert—

“(3)     Single source contract regulations may provide that, if the achievement of
a fair and reasonable contract profit rate for a qualifying defence contract
at the time of pricing was frustrated because the information supplied or
made accessible by one party to the other at the time of pricing, and on
which that contract profit rate was based in whole or in part, was materially
inaccurate or incomplete, the SSRO—”

Page 13, line 20, after “(4)”, insert “made within six months after the price payable
under a qualifying defence contract has first been determined in accordance with
section 15,”

Page 13, line 24, after “appropriate,” insert “if material,”

Page 13, leave out line 32 and insert—

“(1)     The Secretary of State shall by regulations, for each financial year, provide
a determination of—”

Page 14, line 14, leave out subsection (1) and insert—

“(1)     The Secretary of State shall set out in regulations guidance about
determining whether costs are allowable costs under qualifying defence
contracts.”

The above-named Lords give notice of their intention to oppose the Question that Clause 21
stand part of the Bill.

The above-named Lords give notice of their intention to oppose the Question that Clause 25
stand part of the Bill.

Page 18, line 40, leave out from beginning to “on” and insert “A primary contractor
and the Secretary of State must notify the other”

Page 18, line 47, at end insert “when that effect or relevance is believed to exist”

Page 19, line 19, leave out paragraph (a)

Page 24, leave out line 21 and insert “single source contract regulations”

Page 24, line 34, leave out subsection (6) and insert—

“( )     The provision that may be made under subsection (1) by virtue of section 42(2) includes power to specify penalties of different amounts according to
the value of the contract to which the contravention relates.”

Page 24, line 37, leave out subsection (7)

Page 26, line 38, leave out “regulations under this Part” and insert “single source
contract regulations”

Page 26, line 38, at end insert—

“(1A)    Before undertaking a review under this section the SSRO must consult the
industry body and those persons as it thinks fit and must have regard to the
results of that consultation.

(1B)    Where by virtue of subsection (1A) the SSRO has held consultations in
relation to proposals for this Part and regulations under this Part, it must,
when recommending changes to the Secretary of State, in accordance with
subsection (4) below, publish a report of the results of those consultations,
and of its own conclusions.”

Page 27, line 33, leave out subsection (4) and insert—

“(4)     A statutory instrument containing—

(a)   the first single source contract regulations,

(b)   provision made by virtue of section 14(2), (6) or (8) (contracts to
which single source contract regulations apply), whether alone or
with other provision, or

(c)   provision made by virtue of section 33 (amount of penalty),
whether alone or with other provision,

may not be made unless a draft of the instrument has been laid before, and
approved by a resolution of, each House of Parliament.

(5)     Any other statutory instrument containing single source contract
regulations is subject to annulment in pursuance of a resolution of either
House of Parliament.”

Page 27, line 34, at end insert “subject to the subsections below”

Page 27, line 34, at end insert—

“(4A)    A statutory instrument containing regulations made under section 33 may
not be made unless a draft of the instrument has been laid before, and
approved by resolution of, each House of Parliament.”

Page 27, line 34, at end insert—

“(4A)    A statutory instrument containing regulations made under section 21(1)
and (2) may not be made unless a draft of the instrument has been laid
before, and approved by resolution of, each House of Parliament.”

Page 27, line 34, at end insert—

“(4A)    A statutory instrument containing regulations made under section 20 may
not be made unless a draft of the instrument has been laid before, and
approved by resolution of, each House of Parliament.”

Page 27, line 34, at end insert—

“(4A)    A statutory instrument containing regulations made under section 19 may
not be made unless a draft of the instrument has been laid before, and
approved by resolution of, each House of Parliament.”

Page 31, line 35, at end insert—

“( )     No statutory instrument containing an order under subsection (1) in
respect of Part 1 (with or without provision under subsection (4)) is to be
made unless a draft of the instrument has been laid before, and approved
by a resolution of, each House of Parliament.”

Page 31, line 35, at end insert—

“(2A)    No statutory instrument containing an order under subsection (1) in
respect of Part 1 (with or without provision under subsection (4)) is to be
made unless the Secretary of State has first satisfied the conditions set out
in subsection (2B) below and, subsequent to this, a draft of the instrument
has been laid before, and approved by Parliament, in strict accordance with
the super-affirmative procedure as set out in Schedule (Super-affirmative
procedure for orders under Part 1).

(2B)    The conditions that the Secretary of State must fulfil are as follows—

(a)   to publish and lay before Parliament an evidence-based impact
assessment which must assess the risks and merits of at least the
following options—

(i)   DE&S as modified by the Secretary of State in 2014,

(ii)   the arrangements for provision of defence procurement
services as laid out in Part 1 of the Defence Reform Act 2014
(“GoCo”), and

(iii)   other options as may be recommended following
consultation with the House of Commons Defence Select
Committee (Defence Select Committee);

(b)   to lay before Parliament an independent report setting out the
comparative advantages of the defence procurement arrangements
referred to in paragraph (a)(i) to (iii) above;

(c)   to require the Defence Select Committee to review and scrutinise
the independent report referred to in paragraph (b) and report on
its findings to Parliament; and

(d)   to lay before Parliament such other documents as the Secretary of
State may deem necessary to properly inform Parliament’s
decision.”