Blog written by Scott Cattaneo, Head of Defence Commercial, ADS
Earlier this week, the Minister for Defence Procurement Jeremy Quin MP announced the Baseline Profit Rate (BPR) for Single Source Procurements would remain at 8.31% for 2022/2023. The decision to maintain the previous year’s rate is above the recommendation of the Single Source Regulations Office (SSRO) of 8.07%, a move that was welcomed by ADS and its members.
The new rate accurately reflects the uncertainty presented by the effects of the COVID-19 pandemic on a defence industry that continued operating through this crisis unabated for the benefit of our national security at a time where swathes of the comparator group, as used by the SSRO in its calculations, had a different operational profile reflecting the government’s COVID-19 guidance and legislation.
From the perspective of ADS facilitator of the Defence Single-Source Advisory Group (DSAG), I am pleased to state that this result has been welcomed by our membership. Over the last few months DSAG members have combined to evidence and articulate the concerns brought about by the pandemic to both the SSRO and the MOD. DSAG’s role in this conversation is to present the industry perspective, leveraging the advice of subject matter experts. It is through this productive partnership that the effects of market conditions are presented, and subsequently taken account of, to mitigate risks to the Defence & Security Industrial Strategy (DSIS).
ADS, working through the DSAG Special Interest Group, look forward to continuing in our support to the SSRO and the MOD in the evolution of the Single Source Contract Regulations (SSCR) to jointly maximise the potential of the UK defence industry and the DSIS.
For more information, please contact Scott Cattaneo, ADS Group Head of Defence Commercial, at: scott.cattaneo@adsgroup.org.uk.
