ADS Response to New Baseline Profit Rate for Single Source Contracts
Following today’s announcement by Defence Secretary Gavin Williamson that the baseline profit rate for single source defence contracts would fall to 6.81 per cent, ADS said further reductions could put long-term investment in the industry at risk.
The new rate was recommended by the Single Source Regulations Office (SSRO).
ADS Chief Executive Paul Everitt said:
“There is concern in the industry that continuing reductions in the baseline profit rate could put at risk the long-term investment in the UK defence industry that sustains thousands of high value jobs and protects our national security.
“It is important that the Government ensures that the regulatory framework around single source defence contracts incentivises innovation and encourages UK defence companies to continue to develop and deliver the very best capability to our armed forces.
“We are keen to continue engaging directly with the SSRO and the MOD to address these challenges and make sure defence procurement is founded on a closer, long-term partnership between Government and industry.”