EU AI Act Article 50 — 20 days to seal | Get passport
DEFONEOS · Contract Award Letter Pack · v1.0
11 Jul 2026UK MOD / NATO / AUKUS-ready
The literal contract award-letter draft a buyer's legal team redlines before signing.
Owner-gated companion to defoneos-mod-90-day-sovereign-pilot-sow.html (the Schedule 1-7 scope). The award letter is the wrapper — 2 pages — that legally binds the buyer (Authority) to CSOAI Ltd (Supplier) under English law. It includes the Order Form, Conditions of Contract (NEC4 or MOD DEFCON 760 short-form adapted), the pricing schedule, IPR clause (Crown copyright carve-out), data-protection schedule, and signature block. Drafted so a Grade-7 procurement officer can redline and return within 5 working days.
2 ppAward letter length
7Schedules attached
14 dSignature window
0Open negotiation items
1. Letter structure — 8 clauses
Date and parties — buyer full legal name, supplier (CSOAI Ltd, UK Co. 16939677, registered office), contract reference (DEFONEOS-PILOT-2026-NN).
Background — 3-line recital of the 90-day sovereign pilot per the published SoW at defoneos-mod-90-day-sovereign-pilot-sow.html.
Contract documents (order of precedence) — (i) this Letter; (ii) Schedule 1 SoW; (iii) Schedule 2 Pricing; (iv) Schedule 3 IPR & Crown Copyright; (v) Schedule 4 Data Protection (UK GDPR Art 28); (vi) Schedule 5 Security (JSP 440 baseline + SC-cleared personnel undertaking); (vii) Schedule 6 Acceptance (the 240-test pytest gate); (viii) Schedule 7 Exit & Escrow.
Total contract value — fixed-price £180,000 (Platform pilot fee) + £60,000 (deployment & air-gap option) + DEFONEOS-SEAL issuance at £12,000 per seal = £252,000 ex VAT for 90-day pilot, milestone-billed 30/30/40 against P1/P2/P3 acceptance.
Commencement and term — commencement on the latest signature date; pilot term 90 calendar days; option to extend 2 × 90 days at +25% (named in Schedule 2); supersession clause for any prior NDA or MoU.
Signature — wet-ink or DocuSign-equivalent (Adobe Sign approved for UK gov); both signatures legally bind the parties; no purchase order shall issue prior to mutual execution.
Governing law & jurisdiction — laws of England & Wales; exclusive jurisdiction of the English courts (or, if buyer is a Crown body, the Crown's statutory right to elect ADR per the Crown Proceedings Act 1947).
Notices — to contracts@defoneos.org for Supplier; to buyer's named procurement contact; deemed served on next working day by email, 3 working days by post.
2. Letter body — the literal draft (3 pages)
[Letterhead of [BUYER FULL LEGAL NAME — e.g. "Ministry of Defence, acting through Defence Science and Technology Laboratory (Dstl)"]
[Buyer address line 1, line 2, postcode]
[Date — to be inserted on signature]
To: CSOAI Ltd (the "Supplier")
Company No. 16939677
Registered office: [REDACTED — see Companies House]
Trading as: DEFONEOS
Subject: Contract Award — DEFONEOS Sovereign Public Services OS — 90-day Pilot
Reference: DEFONEOS-PILOT-2026-[NN]
Dear Sirs,
1. BACKGROUND
Following your tender response dated [DATE] to our Statement of Requirement under reference [BUYER REFERENCE], and the subsequent clarification meetings held on [DATES], we are pleased to award the 90-day sovereign pilot engagement described in Schedule 1 (Statement of Work) on the terms set out in this Letter and the Schedules attached.
2. CONTRACT DOCUMENTS
The Contract comprises:
(i) this Letter;
(ii) Schedule 1 — Statement of Work (DEFONEOS-PILOT-2026-[NN]-S1);
(iii) Schedule 2 — Pricing Schedule (DEFONEOS-PILOT-2026-[NN]-S2);
(iv) Schedule 3 — Intellectual Property Rights & Crown Copyright;
(v) Schedule 4 — Data Protection (UK GDPR Art 28 Processor Terms);
(vi) Schedule 5 — Security (JSP 440 baseline; SC-cleared personnel);
(vii) Schedule 6 — Acceptance (240-test pytest gate);
(viii) Schedule 7 — Exit, Escrow & Source Code Custody.
In the event of conflict the order of precedence shall be (i) to (viii) above.
3. CONTRACT VALUE
The total fixed price for the pilot is two hundred and fifty-two thousand pounds (£252,000) exclusive of VAT, payable in three milestone tranches:
P1 (Day 30) — Acceptance of base deployment to buyer's nominated environment → 30%
P2 (Day 60) — Acceptance of 33-agent BFT governance council integration → 30%
P3 (Day 90) — Acceptance of DEFONEOS-SEAL issuance workflow + exit handover → 40%
Pricing is firm for the 90-day pilot. Extensions are at the rates in Schedule 2.
4. COMMENCEMENT AND TERM
The Contract shall commence on the date of the last signature below (the "Commencement Date") and shall continue for ninety (90) calendar days unless terminated earlier in accordance with Schedule 6. The Authority may, at its sole discretion, exercise up to two (2) extensions of ninety (90) days each at the rates specified in Schedule 2.
5. WARRANTIES AND COMPLIANCE
The Supplier warrants that:
(a) it holds and shall maintain for the duration of the pilot Cyber Essentials Plus (certification evidence at Schedule 5);
(b) all personnel accessing Authority data hold SC clearance (Baseline) and shall provide evidence on request;
(c) the Software is developed and hosted entirely within the United Kingdom and within the sovereign jurisdiction declared in Schedule 5;
(d) the Software shall pass the 240-test pytest acceptance gate specified in Schedule 6.
The Supplier shall issue a DEFONEOS-SEAL credential against the deployed Software at the end of the pilot, signed by a quorum (≥23 of 33) of its BFT governance council, evidence of which shall be appended to the final delivery report.
6. INTELLECTUAL PROPERTY
IPR in the Software shall vest in the Supplier. The Authority receives a perpetual, irrevocable, non-exclusive, royalty-free licence (with the right to sub-licence to other UK Crown bodies and AUKUS partners) to use, copy, modify and distribute the Software for non-commercial governmental purposes. Crown Copyright in any Authority-supplied data or specifications shall vest in the Authority under the Copyright, Designs and Patents Act 1988 s.163. See Schedule 3 for the full text.
7. DATA PROTECTION
The parties shall comply with Schedule 4 (Data Protection). The Supplier acts as Processor under UK GDPR Art 28 and shall not transfer Authority Personal Data outside the United Kingdom.
8. GOVERNING LAW
This Contract is governed by the laws of England and Wales. The parties submit to the exclusive jurisdiction of the courts of England and Wales, save that where the Authority is a Crown body nothing in this clause shall prejudice any statutory right of the Crown under the Crown Proceedings Act 1947.
9. NOTICES
Notices shall be sent to:
Supplier: contracts@defoneos.org (with copy to legal@defoneos.org)
Authority: [INSERT NAME & EMAIL]
A notice is deemed received: by email, at 09:00 on the first working day after sending; by post, on the third working day after posting.
10. ENTIRE AGREEMENT
This Contract constitutes the entire agreement between the parties in respect of its subject matter and supersedes all prior negotiations, MoUs, NDAs and representations, whether oral or written.
11. EXECUTION
Please evidence your acceptance of this Contract by signing in the space provided below and returning a countersigned copy to the Authority within fourteen (14) working days of the date of this Letter.
Yours faithfully,
_______________________________
[NAME]
[ROLE]
For and on behalf of [BUYER FULL LEGAL NAME]
Date: ____________________________
ACCEPTED AND AGREED:
_______________________________
Nicholas Templeman
Director, CSOAI Ltd (Company No. 16939677)
For and on behalf of the Supplier
Date: ____________________________]
3. Schedule 1 (SoW) cross-reference
The full Schedule 1 (Statement of Work) is at defoneos-mod-90-day-sovereign-pilot-sow.html. Legal teams should print it as Annex A to the Letter. Key acceptance milestones referenced in clause 3 of the Letter:
Milestone
Day
Acceptance gate
Tranche
P1 — Base deployment
30
Air-gapped deploy in buyer VPC + 240-test pytest green
30%
P2 — BFT governance
60
33-agent council quorum on a real proposal (dry-run evidence)
30%
P3 — SEAL + exit
90
DEFONEOS-SEAL issued + source-code escrow lodged with NCC Group
40%
4. Schedule 2 — Pricing Schedule (per-tranche)
Item | Unit | Qty | Unit (£) | Total (£)
------------------------------------------------------------|---------------|-----|----------|----------
Sovereign Platform pilot fee (incl. 33-agent BFT council) | fixed price | 1 | 180,000 | 180,000
Deployment to buyer environment (air-gapped option +£60k) | fixed price | 1 | 60,000 | 60,000
DEFONEOS-SEAL issuance (1 seal, signed, escrow evidence) | per issuance | 1 | 12,000 | 12,000
------------------------------------------------------------|---------------|-----|----------|----------
Subtotal (excl. VAT) | 252,000
VAT @ 20% | 50,400
TOTAL | 302,400
Extension rates (per 90-day extension):
Platform extension fee £45,000
Additional BFT council convenings £12,000 each
Additional SEAL issuances £12,000 each
Advisory day rate (named expert) £2,400/day
Travel & subsistence: at UK Government rates (GED).
Subcontracting: none permitted without Authority written consent.
5. Schedule 3 — IPR & Crown Copyright (excerpt)
3.1 Supplier IPR. The Supplier retains all intellectual property rights in the
Software, the Documentation, and any derivative works created in the
performance of the Contract, subject to the licence granted at clause 3.3.
3.2 Crown Copyright. Crown Copyright in any Authority-supplied data,
specifications, requirements or other material provided to the Supplier
shall vest in the Authority under section 163 of the Copyright, Designs
and Patents Act 1988. The Supplier shall not assert any rights in
Authority-supplied material and shall affix the appropriate Crown
Copyright notice as instructed.
3.3 Authority Licence. The Supplier grants the Authority a perpetual,
irrevocable, worldwide, non-exclusive, royalty-free licence (with the
right to sub-licence to other UK Crown bodies, NATO members, and AUKUS
partners) to use, copy, modify, adapt, and distribute the Software and
Documentation for any non-commercial governmental purpose, including
for national-security, defence, and civil-resilience purposes.
3.4 Open-source carve-out. The Software is licensed to the general public
under the Apache License 2.0. The Authority licence at clause 3.3 is
additional to, and does not limit, any rights granted under that public
licence.
3.5 Background IPR. Each party retains all rights in its Background IPR.
Neither party acquires any rights in the other's Background IPR except
as expressly set out in this Contract.
3.6 Escrow. Source code and build artefacts shall be deposited with NCC
Group Escrow (or equivalent CESG-certified escrow agent) under a
tri-partite escrow agreement attached at Schedule 7.
6. Schedule 4 — Data Protection (Art 28 excerpt)
4.1 The Supplier is a Processor of Authority Personal Data under
UK GDPR Article 28. The Processor shall:
(a) process the Personal Data only on documented instructions from
the Authority, including with regard to international transfers;
(b) ensure that all personnel authorised to process the Personal Data
are subject to confidentiality obligations no less protective than
those in this Contract;
(c) implement appropriate technical and organisational measures to
ensure a level of security appropriate to the risk, including
encryption at rest (AES-256) and in transit (TLS 1.3);
(d) not engage another processor without prior written consent;
(e) taking into account the nature of the processing, assist the
Authority by appropriate measures, insofar as possible, in
fulfilling the Authority's obligation to respond to requests
from data subjects exercising their rights;
(f) at the choice of the Authority, delete or return all Personal
Data after the end of the provision of services relating to
processing;
(g) make available to the Authority all information necessary to
demonstrate compliance with Article 28 GDPR.
4.2 Sub-processors: none at Commencement. Any addition requires 30 days'
written notice and the Authority's right to object.
4.3 International transfers: prohibited. All Personal Data shall remain
within the United Kingdom at all times.
4.4 Breach notification: within 24 hours of becoming aware.
7. Schedule 5 — Security (JSP 440 baseline)
Personnel security — all Supplier personnel with access to Authority systems or data hold SC (Security Check) clearance issued by United Kingdom Security Vetting (UKSV); evidence provided on request and refreshed annually.
Physical & environmental — hosting within UK sovereign jurisdiction only (no overseas data centres, no overseas support engineers with remote access).
Cyber Essentials Plus — Supplier holds and maintains CE+ certification for the duration of the Contract; certificate number recorded in Schedule 5 Annex A.
Cryptographic controls — TLS 1.3 in transit; AES-256 at rest; ML-KEM-768 (Kyber) for any post-quantum key exchange within 12 months.
Supply chain — Supplier publishes a Software Bill of Materials (CycloneDX 1.5) per release; reproducible builds.
Audit — Supplier submits to a security audit by the Authority or its nominated third party (paid by the Authority, scoped to 10 person-days) on no fewer than 14 days' notice, no more than twice per Contract year.
Incident response — Supplier maintains a 24/7 incident response capability; P1 incidents (suspected unauthorised access or data loss) notified within 1 hour.
8. Schedule 6 — Acceptance (the 240-test gate)
The Supplier publishes the 240-test pytest acceptance suite at defoneos-mod-technical-validation-agenda.html. Acceptance of a milestone is conditional on the relevant test subset returning green in the Authority's environment. Tests are re-runnable by the Authority at any time during the pilot term without Supplier involvement. Test evidence is co-signed by both parties and lodged with the SIGIL chain at proofof.ai.
9. Schedule 7 — Exit & Escrow
7.1 On termination or expiry, the Supplier shall:
(a) deliver up-to-date source code, build scripts, infrastructure-as-
code, and documentation to NCC Group Escrow within 14 days;
(b) provide 60 days' transition assistance at the rates in Schedule 2;
(c) return or destroy all Authority Personal Data per Schedule 4.6;
(d) issue a final DEFONEOS-SEAL evidencing the state of the Software
at exit.
7.2 Release events for escrow:
(a) Supplier insolvency or liquidation;
(b) Supplier ceases to support the Software and fails to remedy
within 60 days of Authority notice;
(c) Supplier commits a material breach incapable of remedy.
7.3 On release, the Authority receives a non-exclusive licence to use,
modify, and support the Software for its own purposes, including the
right to engage a third party to maintain it.
10. Redline guidance for buyer-side legal teams
Suggested amendments by clause, based on common UK Crown procurement norms:
Clause
Likely buyer redline
Supplier position
3 (price)
Insert "subject to adjustment for inflation after Day 90"
Reject: price is firm for pilot; extensions at agreed rates.
5(b) (SC clearance)
"DV for certain roles"
Accept where named role handles TOP SECRET material; SC baseline otherwise.
6.3 (licence)
"exclusive licence to UK Crown bodies"
Reject: non-exclusive preserves the public OSS licence.
8 (law)
"arbitration under LCIA rules"
Accept for disputes > £100k; otherwise English courts.
9 (notices)
"hard-copy required for any termination notice"
Accept.
11. Five-working-day redline return timeline
Day 0 (T+0) — Authority sends Letter + 7 Schedules to Supplier via DocuSign / Adobe Sign.
Day 1-2 (T+1-2) — Authority legal redlines; returns tracked-changes PDF.
Day 3 (T+3) — Supplier responds to redlines; telephone call if needed.
Day 4 (T+4) — Final version agreed; both parties sign electronically.
Day 5 (T+5) — Countersigned contract returned to Authority procurement; purchase order raised; P1 work order issued.
This Letter is a draft, not legal advice. The Authority must obtain its own legal advice before signing.
Supplier does not currently hold Cyber Essentials Plus; the Letter assumes it will be obtained before signing (or this clause is amended to "CE Plus to be obtained within 30 days of Commencement").
Supplier does not currently hold SC clearance; the Letter assumes named personnel will obtain it before accessing Authority systems.
NCC Group Escrow relationship is not yet contracted; Supplier will procure the escrow agreement within 14 days of Letter signature.
The £252,000 fixed price assumes the air-gapped deployment option is required; if buyer's environment allows cloud, deduct £60,000.
The 240-test pytest gate is currently passing in the Supplier's lab; Authority-side environmental parity is a P1 acceptance condition.
DEFONEOS-SEAL issuance is operational but the first issuance will be the Supplier's first ever seal; buyer should accept a "BFT council dry-run evidence + first live seal" structure for P3.