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Baseline Profit Rate 2022/23 for Single Source Defence Contracts

28 March 2022

Proposing MP
Jeremy Quin Con
Horsham
Type
Written Ministerial Statement
Department
Ministry of Defence
View on Parliament.uk -->

At a Glance

Issue Summary

The statement is about setting the baseline profit rate (BPR) for single source defence contracts in the UK.

Action Requested

I have set the BPR at 8.31%, differing from the SSRO’s recommendation of 8.07%. I am also accepting the SSRO's net zero Baseline Profit Rate for Government-to-Government Contracts and their funding adjustment recommendation. These rates will be published in the London Gazette and come into effect on April 1, 2022.

Key Facts

  • BPR set at 8.31% for single source defence contracts.
  • SSRO's recommended rate is 8.07%.
  • The decision to use a three-year average instead of four years excludes the impact of COVID-19.
  • Capital Servicing Rates are based on figures from before the pandemic.
  • Net zero Baseline Profit Rate for Government-to-Government Contracts accepted.
  • SSRO funding adjustment recommendation accepted.
  • New rates come into effect on April 1, 2022.
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