Commons Sense

House of Commons · Written Ministerial Statement

The Implementation from 1 April 2025 of New Profit Rates for Single Source Defence Contracts

14 March 2025 · Ministry of Defence

Proposed by Maria Eagle Lab Liverpool Garston

Defence

Summarised by AI from the official record, so it can contain mistakes.

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At a glance

Key points

  • The baseline profit rate for single source defence contracts will be increased to 8.56% from April 1, 2025.
  • The changes are based on the SSRO methodology and are published in the London Gazette.
  • A full explanation of the changes is available on the SSRO website.

Issue summary

The statement is about the implementation of new profit rates for single source defence contracts from April 1, 2025.

Action requested

The baseline profit rate will be increased to 8.56% and other related rates as per SSRO methodology, with a full explanation available on their website. The changes are published in the London Gazette and take effect on April 1, 2025.

Key facts

  • Baseline Profit Rate for single source defence contracts is set at 8.56%.
  • Fixed Capital Servicing Rate increases to 3.64%.
  • Working Capital Servicing Rate rises to 4.69% on positive working capital employed and to 3.21% on negative working capital employed.
  • These rates come into effect from 1 April 2025.
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