皇冠体育app

皇冠体育app move is designed to ensure that better value is obtained for taxpayers. It represents a 15 per cent reduction in the rate applied to so-called 鈥榮ingle source鈥� contracts signed during 2015. That will reduce profits in 2016 on such contracts, with further reductions expected in future years creating significant savings, all of which will be reinvested into defence.

皇冠体育app rate was recommended to the Ministry of Defence by the Single Source Regulations Office (SSRO). It will apply to new qualifying contracts signed from 1 April 2016 to 31 March 2017. 皇冠体育app unique nature of much of the MOD鈥檚 work means the department often has to award contracts to single source contractors, either because there is one specialised supplier or because the procurement must not risk national security.

皇冠体育app SSRO was formed in 2014, following the Currie Review into single source procurement, to ensure that such contracts were charged at a reasonable rate both for taxpayers and the companies involved.

Defence Secretary Michael Fallon said:

Taxpayers can be confident that we are getting better value for money for single source defence contracts as we deliver our 拢178bn equipment programme. This profit rate provides a fair return to industry while delivering savings that will be reinvested in defence.

皇冠体育app baseline profit rate acts as the starting point for agreeing the profit rate for individual contracts, taking into account factors such as risk, performance incentives and capital servicing rates. 皇冠体育app new rate is in line with that applying to comparable defence suppliers in Western Europe and North America.