Allowable Costs under the Single Source Contract Regulations

Costs are only allowable for the purposes of the pricing of a Qualifying Defence Contract or Qualifying Sub-contract and for subsequent allocation to that contract if the costs meet the test of being:

Appropriate &

Attributable to the Qualifying Defence Contract or Qualifying Sub-contract &

Reasonable in the circumstances 

Nicknamed the "AAR" test

The SSRO Allowable Cost guidance is statutory guidance and is largely principle based, however approximately 20 indirect cost categories have additional information as to whether the cost may be allowable. It should also be noted that within the SSRO Allowable Cost guidance certain costs may not be allowable, may be partly allowable (with MoD agreement) or may be fully allowable. With this in mind contractors should seek to follow NAPNOC principles and not commence work under a single source contract until a price for the contract work has been agreed.

Link to SSRO publications page for Allowable Costs: Single Source Cost Standards - Statutory Guidance on Allowable Costs