Defence Reform Act 2014
What this means for your business
- Enforced by
- ECJU, Home Office, SIA
- Applies to
- United Kingdom
- On this page
- 4 compliance obligations, 1 practical guide
What you must do
4 compliance obligations under this legislation — 1 can result in imprisonment.
Management duties 2
Ensure costs claimed on defence contracts are allowable
If your business is the primary (or potential primary) contractor on a UK defence contract, you must only claim costs that are appropriate, directly linked to that contract, and reasonable. You must be ready to show the government or the SSRO that each cost meets these tests whenever they ask.
Follow SSRO guidance on contract profit rates
If your business is the primary contractor on a defence contract, you must take account of the guidance issued by the Senior Salaries Review Officer (SSRO) when setting the contract’s profit rate. You also have to cooperate with any SSRO decision that adjusts the profit rate or the contract price if it is found to be incorrect.
Offences and prohibitions 1
Disclose protected defence procurement information without consent
2 years imprisonmentIf you reveal confidential information that has been obtained by the Secretary of State, an authorised person or the SSRO – and that information relates to an individual or a business and is covered by single‑source contract rules – you commit a criminal offence unless an exemption applies (such as consent, public availability or a statutory purpose). A conviction can lead to up to two years’ imprisonment and an unlimited fine.
Record keeping 1
Keep and make available records for defence contracts
If your business is a contractor on a qualifying defence contract, you must keep accounting and other relevant records up‑to‑date and accurate, and be ready to show them to the Secretary of State or an authorised person on request. You also have to provide copies of those records and answer any reasonable follow‑up questions.
Penalties for non-compliance
1 penalty under this legislation. 1 can result in imprisonment. 1 carry an unlimited fine.
Disclose protected defence procurement information without consent
Unlimited fine and/or 2 years imprisonment
Practical guidance
Our guides explain how to comply with the requirements above.
Sections and provisions
59 classified provisions from this legislation.
Duties 7
Powers 18
- Schedule 1 Exemptions relating to premises used by a contractor
- s.2 Financial assistance
- s.3 Financial claims against contractors or former contractors
- s.6 Status of contractor
- s.8 Intellectual property rights
- s.28 Qualifying sub-contracts
- s.31 Compliance notice
- s.32 Penalty notice
- s.34 Enforcement
- s.37 Provision of other services to Secretary of State
- s.40 Power to repeal Part
- s.41 Single source contract regulations: time limits and determinations
- s.42 Single source contract regulations: general
- s.46 Payments to employers etc of members of reserve forces
- s.47 Report on volunteer reserve forces
- s.50 Commencement
- Schedule 4 Single Source Regulations Office
- Schedule 7 Payments to employers etc of members of reserve forces: supplementary
Definitions 9
- s.1 Arrangements for providing defence procurement services contractor DE&S defence procurement
- s.12 Interpretation of this Part company publicly owned company TUPE regulations
- s.14 Regulations relating to qualifying defence contracts relevant date defence purposes
- s.15 Pricing of contracts AC
- s.26 Duty to report relevant events, circumstances and information
- s.35A Guidance
- s.35 Opinions and determinations Specified
- s.43 Interpretation etc authorised person financial year SSRO
- Schedule 2 Restrictions on disclosure or use of information relevant information Relevant contract accounting officer
Exemptions 9
- Schedule 3 Transfer schemes under section 10
- s.10 Transfer schemes
- s.16 Pricing of contracts: supplementary
- s.17 Contract profit rate
- s.21 Final price adjustment
- s.24 Reports on qualifying defence contracts
- s.25 Reports on overheads and forward planning etc
- s.27 Records and reports: restrictions
- s.33 Amount of penalty