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SSRO DPS and Qualifying Defence Contract Analysis

 

SSRO pursuit of benchmarking data 

 

The SSRO has published a number of bulletins that seek to provide an analysis of data submitted as part of the contractor reports required under the regulatory single source procurement framework and that the SSRO expects will ultimately be beneficial to the UK MoD in negotiating single source contracts with industry by providing benchmarking data.

Two specific bulletins issued by the SSRO are of particular interest in respect of potential longer term sources of benchmarking data. The reported data however is not currently credible as benchmarking data. 

 

Bulletin: Defined Pricing Structures in Qualifying Defence Contracts. (March 2017)  

Each published SSRO DPS has a number of cost categories or cost collection lines. This particular bulletin reviewed amongst other data the percentage cost of programme management and system engineering in relation to the total allowable cost across a number of qualifying defence contracts. 

Programme Management cost was in the range of 0-21% with a simple average of approx. 11%.

Systems Engineering was in the range of 0-100%.

The SSRO acknowledged that the current DPS analysis did not provide credible benchmarking information.

 

Bulletin: Engineering Labour rates reported in Qualifying Defence Contracts/Qualifying Subcontracts – (July 2016)

This bulletin looked at the engineering labour rates reported across a number of qualifying defence contracts and qualifying subcontracts. The labour rates reported were in the range of £11-£74 per hour however the SSRO did not have the data available to confirm whether the majority of these rates included overhead and other costs within the labour rate. The reported rates also included multiple labour rates from individual contractors. 

No mention was made by the SSRO as to whether the contractors also recovered their overhead costs on material as well as labour throughput.