Research and analysis

International aspects of Qualifying Defence Contracts 2015/16

The Single Source Regulations Office has published an analysis of the country that contractors and sub-contractors involved in qualifying defence contracts (QDCs) and qualifying sub-contracts (QSCs) are registered in, as well as the use of foreign currencies within these contracts.


International aspects of qualifying defence contracts 2015/16

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Defence suppliers are required to provide information to the Single Source Regulations Office about the companies involved in QDCs and QSCs, either as a prime contractor or sub-contractor, and any significant payments made by the MOD to these companies. This bulletin provides analysis of these companies, in particular whether they or their ultimate parent companies are registered in or outside the UK, and the use of foreign currencies used by the MOD in paying suppliers.

The analysis shows that the majority of QDCs/QSCs are with companies registered in the UK. Of the 33 QDCs/QSCs analysed, 30 are with companies registered in the UK, whilst only three are with companies registered outside the UK. By value, £10.6 billion of QDCs/QSCs are with companies registered in the UK, and only £31 million is with companies registered outside the UK. When looking at sub-contracts within these QDCs/QSCs, 91 per cent (£1.7 billion out of £1.8 billion) are with contractors who are registered in the UK, across 81 sub-contracts. The are 30 sub-contracts with companies registered outside of the UK, with a total value of approximately £150 million.

Foreign currencies are rarely used in reported payments within QDCs/QSCs in 2015/16. The vast majority of significant payments to be made by the MOD for 33 QDCs/QSCs are in pounds sterling, with 99.9 per cent of reported payments in sterling and only 0.1 per cent in other currencies.

The values reported are those agreed at contract signing, and may not reflect those at contract completion.

Published 7 September 2016