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Reforms to the Single Source Contract Regulations
14 May 2026
Type
Written Ministerial Statement
Department
Ministry of Defence
At a Glance
Issue Summary
The statement discusses reforms to the Single Source Co [2D [K Contract Regulations to improve efficiency, innovation, and delivery speed [K in UK defence procurements.
Action Requested
The government is laying a Statutory Instrument to i [1D [K increase profit incentives for suppliers from 2% to 10%, decrease starting [K profits on low-risk contracts to motivate productivity improvements, raise [K the contract threshold under regulations from £5 million to £25 million, an [2D [K and introduce an innovation uplift to reward firms investing in new technol [7D [K technologies.
Key Facts
- The Single Source Contract Regulations govern around half [4D [K half of defence spending on equipment.
- A Statutory Instrument will be la [2D [K laid to increase profit incentives for suppliers up to 10 percentage points [6D [K points.
- Low-risk contracts starting profits will decrease to incentivise [11D [K incentivise productivity and risk-taking by suppliers.
- The contract thre [4D [K threshold under regulations is being raised from £5 million to £25 million. [8D [K million.
- An innovation uplift will reward firms investing in innovative [K technologies without a guaranteed contract.
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