Procurement Bill [HL] (HL Bill 4)

Procurement Bill [HL]Page 110

(6)In subsection (6) omit “or the funding adjustment”.

Allowable costs

11(1)Section 20 (allowable costs) is amended as follows.

(2)In subsection (2)—

(a)5after “qualifying defence contract” insert “, or, where the contract is
divided into components, a component of that contract”;

(b)in paragraph (b), after “contract” insert “or component”.

(2A)Single source contract regulations may provide that the
10requirements set out in subsection (2)(a) to (c) are not met in relation
to a cost where the cost arises from profits made by a person
connected with the primary contractor.

(2B)The regulations may specify the circumstances in which a person is
connected with the primary contractor.”

(4)15In subsection (4) after “contract” insert “, or where the contract is divided
into components, a component of that contract.”.

(5)Where a person within subsection (5A) applies to the SSRO for such
a determination, the SSRO must determine—

(a)20the extent to which a cost is or would be an allowable cost
under a qualifying defence contract or a component of such a
contract, or

(b)the extent to which a method which is used or may be used
to determine a cost under a qualifying defence contract or a
25component of such a contract would result in that cost being
an allowable cost under such a contract or component.

(5A)The following persons are within this subsection—

(a)the Secretary of State;

(b)an authorised person;

(c)30a primary contractor under a qualifying defence contract;

(d)a potential primary contractor.”

(6)In subsection (6), for “the contract”, in the first place it occurs, substitute “a
qualifying defence contract”.

Reports

12(1)35Section 25 (reports on overheads and forward planning etc) is amended as
follows.

“(a)where P is associated with one or more other persons—

(i)the ultimate parent undertaking in relation to P and
40those other persons, or

(ii)where permitted under the regulations in relation to
a report mentioned in subsection (2), another person
associated with P which that undertaking and the

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Secretary of State have agreed is to be a designated
person in relation to that report, and”.

(8A)In this section, “financial year” means a year beginning with 1 April
5or a year beginning with such other date as may be agreed between
the Secretary of State and a designated person.”

13In section 43 (interpretation etc), in the definition of “financial year”, at the
end insert “(but see section 25(8A) for the different meaning of “financial
year” in that section)”.

10Qualifying sub-contracts

14(1)Section 29 (determining whether a contract is a qualifying sub-contract) is
amended as follows.

“(c)where the assessment is that the proposed contract would not
15be a qualifying sub-contract if it were entered into, to give
notice in writing of that fact, and of reasons for the
assessment, to the Secretary of State, an authorised person
and the prospective sub-contractor.”

“(c)20where the assessment is that the proposed sub-contract
would not be a qualifying sub-contract if it were entered into,
to give notice in writing of that fact, and of reasons for the
assessment, to the Secretary of State, an authorised person
and the prospective sub-contractor.”

(4)25In subsection (5), in each of paragraphs (a) and (b), after “would”, insert “or
would not”.

15In section 30(4)(a) (application of single source contracts regime to
qualifying sub-contracts)—

(a)after “for the” insert “primary contractor or”;

(b)30for “the sub-contractor’s opinion” substitute “their opinion”.

16In section 31(3) (compliance notices)—

(a)in paragraph (e), omit “, or”;

(g)in circumstances where P is required to give the
35notice mentioned in section 29(2)(c) or (4)(c) in respect
of a proposed contract, P fails to give such a notice.”

Powers of the Single Source Regulations Office (“SSRO”)

17(1)Section 35 (opinions and determinations by the SSRO) is amended as
follows.

(2)40In subsection (1)(a), omit “qualifying defence” in both places it occurs.

“(c)a person who has entered into a contract with the Secretary of
State (a “contractor”);”

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(4)In subsection (2)(d)—

(a)for “the”, in the first place it occurs, substitute “a”;

(b)omit “(in the case of a proposed contract)”.

“(3)5The SSRO may, on a reference made to it by a person mentioned in
subsection (2), give an opinion on any other matter relating to the
application or interpretation of this Part or single source contract
regulations.”.

(6)In subsection (4)(a), omit “qualifying defence”.

(7)10In subsection (5), omit “primary” in both places it occurs.

35A Guidance

The SSRO may issue such guidance as it considers appropriate in
relation to the application or interpretation of this Part or single
15source contract regulations.”

19In paragraph 10(3) of Schedule 4 (procedure of the SSRO), after “16(2)(b)”
insert “or (4)”.

Section 107

Schedule 11 Repeals and revocations

20Primary legislation

1Paragraphs 9(9)(d) and 11(6)(b)(ix) of Schedule 7B to the Government of
Wales Act 2006 (as inserted by an Act of Parliament resulting from the Trade
(Australia and New Zealand) Bill that was introduced into the House of
Commons on 11 May 2022).

225Sections 39 and 40 of the Small Business, Enterprise and Employment Act
2015.

3An Act of Parliament resulting from the Trade (Australia and New Zealand)
Bill that was introduced into the House of Commons on 11 May 2022.

Subordinate legislation

430The Defence and Security Public Contracts Regulations 2011 (S.I. 2011/
1848).

5The Public Contracts Regulations 2015 (S.I. 2015/102).

6The Concession Contracts Regulations 2016 (S.I 2016/273).

7The Utilities Contracts Regulations 2016 (S.I. 2016/274).

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Retained direct EU legislation

8Commission Decision 2006/211/EC of 8 March 2006 establishing that
Article 30(1) of Directive 2004/17/EC of the European Parliament and of the
Council coordinating the procurement procedures of entities operating in
5the water, energy, transport and postal services sectors applies to electricity
generation in England, Scotland and Wales.

9Commission Decision 2007/141/EC of 26 February 2007 establishing that
Article 30(1) of Directive 2004/17/EC of the European Parliament and of the
Council coordinating the procurement procedures of entities operating in
10the water, energy, transport and postal services sectors applies to the supply
of electricity and gas in England, Scotland and Wales.

10Commission Decision 2010/192/EU of 29 March 2010 exempting
exploration for and exploitation of oil and gas in England, Scotland and
Wales from the application of Directive 2004/17/EC of the European
15Parliament and of the Council coordinating the procurement procedures of
entities operating in the water, energy, transport and postal services sectors.

11Commission Implementing Decision (EU) 2017/1870 of 16 October 2017 on
the publication of the reference of the European standard on electronic
invoicing and the list of its syntaxes pursuant to Directive 2014/55/EU of
20the European Parliament and of the Council.