Research and analysis

Profit rates reported in Qualifying Defence Contracts 2015/16

The Single Source Regulations Office has published an analysis of the planned contract profit rates for qualifying defence contracts (QDCs) and qualifying sub-contracts (QSCs) entered into in 2015/16.



This report highlights the planned contract profit rates reported for 30 QDCs/QSCs entered into between 1 April 2015 to 31 March 2016. The analysis shows on average, QDCs/QSCs reported a contract profit rate of 11.7 per cent in 2015/16. Excluding the Profit On Cost Once (POCO) adjustment, it was 12.0 per cent. Contract profit rates for individual QDCs/QSCs ranged from around 5 per cent to just under 16 per cent. The average adjustments for each of the six profit rate steps used to calculate the contract profit rate are also presented.

The contract profit rates reported are those used for contract pricing purposes, and may not reflect the profit rates earned by suppliers once contracts are completed. The SSRO will also publish statistics on the actual profit rates achieved in contracts, once this data has been collected following contract completion. All figures are provisional, and may be updated in future statistical releases.

Published 25 May 2016