Commons Sense

House of Commons · Written Ministerial Statement

Reforms to the Single Source Contract Regulations

14 May 2026 · Ministry of Defence

Proposed by Luke Pollard Lab Plymouth, Sutton and Devonport

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

View on Parliament.uk

At a glance

Key points

  • The government is laying a Statutory Instrument to increase profit incentives for suppliers from 2% to 10%.
  • Starting profits on low-risk contracts will be decreased to motivate productivity improvements.
  • The contract threshold under regulations is being raised from 5 million to 25 million.

Issue summary

The statement discusses reforms to the Single Source Contract Regulations to improve efficiency, innovation, and delivery speed in UK defence procurements.

Action requested

The government is laying a Statutory Instrument to increase profit incentives for suppliers from 2% to 10%, decrease starting profits on low-risk contracts to motivate productivity improvements, raise the contract threshold under regulations from £5 million to £25 million, and introduce an innovation uplift to reward firms investing in new technologies.

Key facts

  • The Single Source Contract Regulations govern around half of defence spending on equipment.
  • A Statutory Instrument will be laid to increase profit incentives for suppliers up to 10 percentage points.
  • Low-risk contracts starting profits will decrease to incentivise productivity and risk-taking by suppliers.
  • The contract threshold under regulations is being raised from £5 million to £25 million.
  • An innovation uplift will reward firms investing in innovative technologies without a guaranteed contract.
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