Five primary procurement routes, each suited to different equipment types, market conditions, and strategic contexts. Select a card for detailed guidance.
State-to-state agreement bypassing commercial competition. Leveraged for allied military equipment, classified technology transfer, or where FMS/DCS regimes apply.
Pre-qualified panel of suppliers; call-off contracts placed over an agreed term. Ideal for recurring consumables, sustainment services, and spares supply chains.
Award to a sole supplier without competition. Justified by OEM exclusivity, urgency, or where only one source can satisfy the technical requirement.
Invitation to a shortlisted set of pre-qualified vendors. Used for classified programmes, niche capability domains, or when only a small market can respond.
Unrestricted tender to the market. Maximises value for money, encourages new entrants and innovation. Required by most public procurement regulations above threshold.
Answer the questions below to receive a tailored purchase method recommendation with contract type, pricing model, and risk guidance.
The procurement trigger determines which constraints are active from the outset — IP ownership, incumbent suppliers, urgency authorities, and certification regimes all depend on this answer before any other question is relevant.
Three fundamental pricing structures, each allocating risk differently between buyer and seller. Complements the contract type selection in the Digital Procurement tool.
| Equipment | Preferred Pricing | Ceiling / Limit | Open Book? | Key Condition |
|---|---|---|---|---|
| Fighters / Combat Aircraft (production) | Fixed Price | Contracted price | No | Stable spec, repeat production lot |
| Satellite (GEO, novel) | Cost+ / Target Cost | Cost ceiling in contract | Yes | High technical risk, new technology |
| Satellite (repeat series) | Fixed Price | Contracted price | No | Heritage design, proven supply chain |
| Naval Vessel (lead ship) | Target Cost | Ceiling price agreed | Yes | Share ratio negotiated; transition to FFP for batch |
| Missiles (production) | Fixed Price | Unit price | No | Proven design, volume ordering |
| EW / Classified R&D | Cost+ Fixed Fee | Estimated cost + fee | Yes | High technical uncertainty, exploratory |
| IT/Cyber Services | Fixed Price / T&M | NTE ceiling | Partial | T&M only where scope undefined |
| Sustainment / MRO (framework) | Fixed Rates | Rate card | Optional | Volume-dependent discounts; open book for benchmarking |
| UAS Development | Target Cost → FFP | Stage gates | Yes (dev phase) | Development Cost+ transitions to production FFP at maturity |
Open book procurement requires the contractor to provide transparent access to cost data, enabling independent verification and equitable negotiation. It is the foundation of any Cost+ or Target Cost contract.
Contractor provides full visibility of actual incurred costs: labour, materials, sub-contractors, overheads, profit.
Buyer retains right to audit books via a Delegated Contracting Authority (DCA) or third-party Cost Assurance Analyst.
Fee (profit) is negotiated separately from cost. Fee structure (Fixed / Incentive / Award) drives contractor behaviour.
Enables buyer to challenge inefficiencies, reject unallowable costs, and implement Should-Cost benchmarks.
Model a Cost+ Fixed Fee contract. Adjust the cost elements and fee rate to see the negotiated contract value.
| Criterion | Open Book | Closed Book (FFP) |
|---|---|---|
| Technical maturity | Low–Medium (TRL 1–6) | High (TRL 7+, production) |
| Cost visibility | Full access; audit rights | No access after award |
| Contractor efficiency incentive | Moderate (fee-driven) | High (profit from underrun) |
| Buyer cost risk | Higher (pays actual cost) | Low (fixed obligation) |
| Suitable purchase method | Direct / Closed Competition / G-G dev | Any — open / framework / G-G FMS |
| Admin burden | High — requires cost assurance resource | Low — invoice and close |
| Typical use | Development, novel platforms, EW, space dev | Production, COTS, repeat buys, spares |
Midlife upgrades represent a structurally distinct procurement event. The platform is a sunk cost; the upgrade must be procured as a new capability with its own method, pricing model, and risk allocation strategy.
Select the upgrade type and platform context to receive tailored purchase method advice.
| MLU Phase | Recommended Pricing | Open Book? | Notes |
|---|---|---|---|
| Feasibility Study / Concept Phase | Cost+ Fixed Fee | Yes | Scope undefined; time-boxed; output is feasibility report + ICD |
| Preliminary Design (PDR) | Cost+ / Target Cost | Yes | Technical risk still high; milestone payment structure |
| Critical Design & Integration (CDR) | Target Cost | Yes | Share ratio incentivises cost discipline; ceiling price mandatory |
| Qualification & Test (FSED) | Target Cost → FFP | Partial | Transition to FFP once design is proven |
| Production Installation (fleet-wide) | Fixed Price | No | Design stable; learning curve and volume discounts negotiated |
| Post-Installation Support / ILS | Fixed Rates (Framework) | Optional | Rate cards agreed; open book used for benchmarking only |
Consolidated view across all purchase methods and pricing models to support senior procurement decision-making. Use alongside the contract type decision from the companion Digital Procurement tool.
Hover any cell for rationale. ✓ Best = natural combination · Possible = with justification · ✗ = policy/audit issues
| Purchase Method ↓ / Pricing → | Fixed Price (FFP) | Target Cost (FPIF) | Cost+ (CPFF/CPIF) | Open Book + T&M | FMS / G-G Case |
|---|---|---|---|---|---|
| G-G (Government-to-Government) | ✓ FMS production lots | Possible (co-dev) | Possible (dev phase) | Rare | ✓ Standard FMS case |
| Framework Contract | ✓ Primary method | Not typical | Not recommended | Possible (services) | N/A |
| Direct (Single Source) | Possible (production) | ✓ Complex direct awards | ✓ Primary for R&D/dev | ✓ Cost assurance reqd | N/A |
| Closed Competition | Common (system devel) | ✓ Lead platform dev | ✓ R&D, novel systems | With cost assurance | N/A |
| Open Competition | ✓ Default for production | Less common | Rarely appropriate | Difficult to audit widely | N/A |
| Equipment | Method | Pricing Model | Open Book | MLU Method | MLU Pricing |
|---|---|---|---|---|---|
| Combat Aircraft (production) | G-G / Closed | Fixed Price | No | Direct OEM | Cost+ → FFP |
| GEO Satellite (novel) | Closed Competition | Cost+ / Target | Yes | Direct OEM | Cost+ |
| Naval Vessel (lead ship) | Closed Competition | Target Cost | Yes | Direct OEM / Closed | Target Cost |
| Missile / Munition (production) | G-G / Closed | Fixed Price | No | G-G / Direct | Fixed Price |
| Armoured Vehicle | Open Competition | Fixed Price | No | Closed / Direct | Target Cost |
| Radar / EW System | Closed Competition | Cost+ / FFP | Dev phase | Direct OEM | Cost+ |
| Ground Station / Comms | Open Competition | Fixed Price | No | Open / Framework | Fixed Price |
| IT / Cyber Systems | Framework / Open | Fixed Price / T&M | Partial | Framework | Fixed Rates |
| Sustainment / MRO | Framework | Fixed Rates | Optional | N/A | N/A |
| R&D / Demonstrator | Closed / Direct | Cost+ Fixed Fee | Yes — mandatory | N/A (not production) | N/A |
| UAS / Drone (system dev) | Open / Closed | Cost+ → FFP | Dev phase | Open Competition | Fixed Price |
| Risk | Triggered By | Purchase Method Mitigation | Severity |
|---|---|---|---|
| Cost overrun — no ceiling | Cost+ without ceiling price clause | Mandate cost ceiling / NTE; insert should-cost benchmarks | High |
| Single-source lock-in | Direct contract, no competition | Government IP ownership; dual-source strategy; competitive re-compete at MLU | High |
| G-G dependency / policy risk | G-G for core capability | Ensure national maintenance rights; escrow source code; ILS local content | Medium |
| Framework under-utilisation | Poorly scoped framework | Define realistic call-off volumes; minimum order obligations; regular benchmarking | Medium |
| Open competition: no qualified bidders | Market smaller than assumed | Pre-RFP market engagement; pre-qualification; fallback to closed competition | Medium |
| MLU IP dispute | OEM owns integration IP | Negotiate IP rights at initial contract; Government Purpose Rights clause | High |
| Open book audit failure | Contractor non-compliance | Audit rights in contract; step-in rights; withheld progress payments | Medium |
The five routes in this tool are the primary competitive posture decisions. A complete procurement strategy also requires selection from the broader route taxonomy below, which governs legal authority, vehicle type, and international mechanism.
Eight route families, each with distinct legal basis, oversight regime, and typical use case. The five primary methods in this tool sit within the Competition Posture column.
| Route Family | Legal Basis (UK/EU) | Legal Basis (US) | Competition Posture | Open Book? | Typical Use |
|---|---|---|---|---|---|
| Government-to-Government (G-G) | Exempt: Procurement Act 2023; bilateral MOU/DCA | Arms Export Control Act; FAR 6.302-4 | None | No (FMS pricing opaque) | Allied military platforms, ITAR-controlled systems, FMS, OCCAR, NATO agency |
| Framework Agreement / IDIQ | Procurement Act 2023 s.45; PCR 2015 Reg 33 | FAR Subpart 16.5 (IDIQ); GSA Schedules | Pre-competed | Optional at renewal | Sustainment, IT, professional services, spares; multi-year recurring spend |
| Direct / Single Source | Procurement Act 2023 s.41; SSCR 2014 (regulated profit) | FAR 6.302-1 to 6.302-7 (J&A required) | None | Mandatory (SSCR/TINA) | OEM exclusivity, UOR, follow-on production, IP-locked capabilities |
| Closed / Restricted Competition | Procurement Act 2023 s.19 (limited conditions); DSPCR Reg 26 | FAR Part 15 (negotiated); DFARS 215.3 | Restricted | Recommended (Cost+) | Classified programmes, small industrial base, space/EW systems |
| Open Competition | Procurement Act 2023 s.14; above-threshold mandatory | FAR Part 6 (CICA); SAP below threshold | Full | No (FFP standard) | COTS, vehicles, IT, training systems, professional services, commodities |
| Other Transaction Authority (OTA) US only — no direct UK equivalent |
N/A (no UK OTA equivalent; DASA innovation grants partial analogue) | 10 USC §4021–4022; not governed by FAR/CICA | Flexible | Negotiable | Prototype/R&D with nontraditional contractors; production follow-on without FAR |
| Commercial Solutions Opening (CSO) US DoD / expanding |
DASA grants; Innovate UK Defence; competition notice | 10 USC §3458; NDAA FY26 s.1823 expanded | Open (commercial) | No | Commercial technology; AI/autonomous systems; VC-backed defence tech startups |
| Collaborative / Multinational Programme | OCCAR Convention; NATO NSPA; bilateral MOU | Foreign Comparative Testing; NSPA | Consortium | Partial (OCCAR audit) | TYPHOON, NH-90, BOXER, FREMM, Meteor, MGCS; burden sharing and work-share |
| Private Finance Initiative (PFI) / DBFO No new PFI in UK since 2018 |
Treasury Green Book; HMT PFI guidance (historic) | Public-Private Partnership legislation | Competitive tender | Full (unitary charge model) | Infrastructure: bases, accommodation, training facilities; asset off-balance sheet |
Interactive chart. Click a tier row to expand detail. Bars show estimated % of spend through each route family. Estimates are professional judgements grounded in UK MOD 2023/24 published data and NATO procurement literature — no single official source provides this exact disaggregation.
| Source | Publisher | Date | Used For |
|---|---|---|---|
| MOD Trade, Industry and Contracts 2024/25 | UK MOD / GOV.UK | Sep 2025 | Overall competitive/non-competitive split; FMS spend; framework spend |
| MOD Trade, Industry and Contracts 2023/24 | UK MOD / GOV.UK | Mar 2025 | 44% non-competitive, 37% competitive baseline figure; top-10 supplier concentration |
| Annual Qualifying Defence Contract Statistics 2023/24 | SSRO / GOV.UK | Jul 2024 | Single-source contract volume (59 QDCs/QSCs); average profit rate 9.47%; avg duration 4.9yr |
| Defence Procurement Reform (CBP-9566) | UK Commons Library | Mar 2025 | Historical competitive split; SSCR framework; Procurement Act 2023 route structure |
| UK Public Sector Defence Procurement Tracker | Tussell | 2024/25 | Framework agreement usage (£5bn, 10 frameworks in 2024); SME participation (5%) |
| EO 14265: Navigating Defence Procurement Reforms | Troutman Pepper / DoD | May 2025 | AAF six acquisition pathways; OTA statutory basis 10 USC §4021-4022 |
| FY26 NDAA — Key Provisions | Ryan & Wetmore / Congress | Mar 2026 | CSO expansion (s.1823); CAS threshold changes; nontraditional contractor provisions |
| GAO Report: Reciprocal Defence Procurement Agreements | US GAO | 2024 | RDP agreement framework; 28 partner countries; $9.7bn annual US defence exports |
| FAR / DFARS / 10 USC | US Federal Acquisition Regulation | Current | US contract type authorities; competition requirements; OTA statutory basis |
| Professional judgement (LASS TECH) | — | 2025 | Equipment-tier × route distribution estimates; no single official source provides this breakdown |
The pricing model labels CPFF, CPIF, CPAF, FFP, FPIF, T&M, and IDIQ each describe a specific legal and financial structure with distinct risk allocation, fee mechanics, and compliance requirements. Select any card for full definition.
| Type | Fee Structure | Cost Risk: Buyer | Cost Risk: Seller | Open Book? | Typical Use | FAR Ref |
|---|
| Scenario | Open Book? | Why / Why Not | UK Regime |
|---|---|---|---|
| FFP — post-award | No | Price is fixed; cost visibility has no effect on buyer's obligation. Auditing actual costs post-award provides no financial benefit. | Not required. May be used for benchmarking at recompete. |
| FFP — pre-award (should-cost) | Optional | Buyer may require cost breakdown to validate proposed price before agreeing a fixed price. This is "open book to award" not "open book contract". | TINA (Truth in Negotiations) equivalent: required above threshold for non-competitive awards. |
| FPIF / Target Cost | Recommended | Share ratio only works fairly if actual costs are verifiable. Without cost visibility, buyer cannot confirm whether underrun was efficiency or underreporting. | SSCR 2014 profit rate step process requires cost transparency. |
| CPFF / CPIF / CPAF | Mandatory | Buyer reimburses actual costs — cost visibility is the entire mechanism. Without it, buyer has no ability to challenge unallowable or excessive costs. | SSCR 2014 mandatory for QDCs; DCAA audit rights in US Cost+ contracts. |
| T&M (Time & Materials) | Mandatory | Labour rates and material costs must be auditable. NTE (not-to-exceed) ceiling requires cost tracking. | Required; T&M is highest-risk contract type for buyer and requires active cost surveillance. |
| Framework (call-off) | At renewal | Post-award call-off prices are pre-agreed. Open book used at framework renewal to benchmark rates against market and challenge overhead creep. | SSCR applies if individual call-off becomes a QDC (>£5M, non-competitive). |
| G-G / FMS | No (FMS) | FMS pricing uses US Government audited standard rates; UK buyer has no access to US contractor cost books. DCS (Direct Commercial Sales) can include open book. | FMS exempt from SSCR; DCS treated as direct contract. |