Question to the Cabinet Office:

To ask the Minister for the Cabinet Office, what guidance is given to departments on the size of profit margins given to private contractors when awarding contracts.

The overarching principle in all public procurement is to secure the best value for money for the taxpayer. One tool available to departments to achieve this is Open Book Contract Management (OBCM), a structured process for the sharing and management of charges and costs and operational and performance data between the supplier and the client.

OBCM should be used on those contracts where the additional cost is justified by the perceived level of benefits and risk.

Guidance on the use of OBCM can be found on GOV.UK:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/525283/obcm_guidance_final.pdf