Defence: Contracts

(asked on 13th July 2020) - View Source

Question to the Ministry of Defence:

To ask the Secretary of State for Defence, what changes his Department has made to the contract profit rate in the last five years.


Answered by
Jeremy Quin Portrait
Jeremy Quin
This question was answered on 16th July 2020

Under the Single Source Contract Regulations, the contract profit rate for a Qualifying Defence Contract (QDC) is determined by a six-step process, starting with a Baseline Profit Rate (BPR). The BPR is determined each year by the Single Source Regulations Office (SSRO). It is then adjusted to take account of various factors, including risk, capital servicing and SSRO funding, in order to determine the contract profit rate for each QDC.

Movements in the BPR over the past five years, together with details of some other adjustments, can be found in the 2020 contract profit rate update, which is published on gov.uk at the following link:

https://www.gov.uk/government/publications/2020-contract-profit-rate

The site also includes a detailed supporting analysis and information on the methodologies used.

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