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Reforms to the Single Source Contract Regulations

14 May 2026

Proposing MP
Luke Pollard Lab
Plymouth, Sutton and Devonport
Type
Written Ministerial Statement
Department
Ministry of Defence
View on Parliament.uk -->
TAGS
Defence

At a Glance

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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