OREANDA-NEWS The Defence Secretary has today announced a better deal for taxpayers, with the lowering of the baseline profit rate for contracts placed under Single Source Contract Regulations from 8.95% to 7.46%..

This represents a 16% reduction in the rate applied to single source contracts and will ensure better value for money for taxpayers and give a fair return to industry. All savings will be reinvested into the defence budget, including delivering the equipment our Armed Forces need to keep the UK safe.

The unique nature of much of the MOD’s work means the department often has to award contracts without competition, either because there is one specialised supplier or because the procurement must not risk national security. This lower profit rate will ensure the UK taxpayer gets the very best deal, regardless of the way contracts are delivered.

The MOD is making sure big business does its part to support an efficient and economical defence budget.
A strong supplier base is essential to the security and prosperity of the UK. However, big businesses must do their part to deliver savings and balance the UK’s budget.

The new lower profit rate ensures that these businesses receive a fair return for the work they do, while freeing money for reinvestment in vital defence equipment, supporting jobs and innovation.