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House of Commons Hansard
Single Defence Contracts: Baseline Profit Rate 2019-20
15 March 2019
Volume 656
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I am today announcing that I have set the baseline profit rate for single source defence contracts at 7.63%, in line with the rate recommended by the Single Source Regulations Office (SSRO). I have accepted the methodology used by the SSRO to calculate this figure.

I am also announcing new capital servicing rates and an SSRO funding adjustment as recommended by the SSRO, which can be found at table 1 below. These rates have been published in the London Gazette, as required by the Defence Reform Act 2014.

All of these new rates will come into effect from 1 April 2019.

Table 1: Recommended Rates agreed by the Secretary of State for Defence


2018 rates

2019 rates

Baseline Profit Rate (BPR) (% on contract cost)



Fixed Capital Servicing Rate (% on Fixed Capital employed)



Working Capital Servicing Rate (% on positive Working Capital employed)



Working Capital Servicing Rate (% on negative Working Capital employed)



SSRO Funding Adjustment