Under the Defence Reform Act 2014 (the act), the Single Source Regulations Office (SSRO) is required annually to review the figures used to determine the contract profit rate for pricing single source contracts. It is also required to publish the review and make an annual recommendation to the Secretary of State for Defence (SofS) on whether the profit rate should be adjusted.
The SSRO must recommend the new rates to the SofS by 31 January 2015 in order for the SofS to issue the rates by 15 March 2015. Section 17 (2) of the act sets out the steps for determining the contract profit rate for qualifying defence contracts. Such steps provide for adjustments to be made based on the rate and funding adjustment described in Section 19(1) of the act. In accordance with its obligations under Sections 19(2) and 19(3) of the act, and in order to assist with the determination of these rates, the SSRO’s assessment of the rates is set out in this publication.