Baseline Profit Rate Activities Review

The SSRO is required each year to provide the Secretary of State with an assessment of the appropriate baseline profit rate. The baseline profit rate provides the starting point in the determination of the contract profit rate. The assessment uses the SSRO’s transparent and established methodology, which incorporates the returns of companies whose economic activities are comparable to those that contribute to the delivery of Qualifying Defence Contracts (QDCs) and Qualifying Sub-Contracts (QSCs).

We are reviewing and revalidating the economic activities used in this assessment, to confirm they remain representative of those that are known to contribute to the delivery of QDCs and QSCs. This will ensure we can continue to rely on our methodology to produce a BPR assessment which supports the SSRO’s statutory aims of value for money and fair and reasonable prices. This consultation seeks feedback on the first phase of this review in which the SSRO has analysed the QDCs and QSCs entered into since the start of the regime. Stakeholder feedback on this analysis will contribute to the development of any proposals to further develop and refine the activity types that contribute to the SSRO’s annual BPR assessment.

This consultation is open to all interested persons. We particularly welcome comments from individuals or organisations with an interest in single source defence procurement and ensuring that good value for money is obtained in the government expenditure on qualifying contracts and the prices paid under those contracts are fair and reasonable.

The consultation runs until 5.00 pm Thursday 10 August 2023. Written responses should be sent:

• by email to: consultations@ssro.gov.uk (preferred),

• by post to: BPR Activities Review consultation responses, SSRO, 100 Parliament Street, London, SW1A 2BQ

• by telephone including arranging an appointment to speak to the SSRO about the consultation: 020 3771 4767