scope:

Introduction

Responsibility for the efficient and economic performance of contracts for the development of defence equipment must rest with the contractor. The technical, time and cost objectives to which the contractor is working must, however, be acceptable to the Ministry. The achievement of these objectives is the paramount consideration and the Ministry must be in a position to see that appropriate action is taken without delay should the prospects of doing so become uncertain.

In general, the Ministry's requirements in this connection will have regard for the importance and expected cost and duration of the work and the technical and other risks involved. It is intended that they should not involve either party in unwarranted administrative effort.

Guidance as to the Ministry's requirements in this regard, where the cost of the work is expected to exceed £3M, are set out in the guidance document on The Planning and Cost Management of Major Development Contracts (DEFCON GUIDE NO. 1). lt is recognised that the guidance given in that document is not appropriate without progressive modification and simplification for contracts of lesser value. The_se notes accordingly set out simplified guidance procedures for contracts less than £500,00 in value, together with general guidance on procedures for contracts from that value up to £3M.

The extent to which the requirements described in this document will apply, and the procedures applicable to individual contracts, will be agreed with the contractor and stated in the contract. The contractor's existing cost accounting and management control procedures will be used wherever possible.

It is intended that these guidelines should apply to sub-system contracts and other subcontracts under £3M in value placed by the prime contractor under a prime contractorship arrangement as well as to contracts placed by the Ministry. To the extent that they are applicable, the procedures may also be applied, in agreement with the contractor, to minor research and other contracts placed on a cost-plus basis.