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Secretary of State announces Baseline Profit Rate 2020/21
The Secretary of State for Defence has today announce the Baseline Profit Rate for Single Source Contracts over 2020-2021.
The Secretary of State for Defence Ben Wallace has today set the Baseline Profit Rate (BPR) for single source contracts over 2020/2021. The BPR has been set at 8.22%, which is in line with the rate recommendation made by the Single Source Regulations Office (SSRO) and this recommendation has been accepted by the Secretary of State. The BPR is calculated on a 3 year rolling average of underlying profit rates. This underlying profit rate decreased from 8.50% for 2019-20 to 8.23% for 2020-21.
The Secretary of State also announced new Capital Servicing Rates and an SSRO funding adjustment as recommended by the SSRO, which can be seen in the below table:
Recommended Rates agreed by the Secretary of State for Defence
|
Element |
2019 rates |
2020 rates |
|
Baseline Profit Rate (BPR) (% on contract cost) |
7.63% |
8.22% |
|
Fixed Capital Servicing Rate (% on Fixed Capital employed) |
3.98% |
3.66% |
|
Working Capital Servicing Rate (% on positive Working Capital employed) |
1.18% |
1.22% |
|
Working Capital Servicing Rate (% on negative Working Capital employed) |
0.53% |
0.61% |
|
SSRO Funding Adjustment |
-0.042% |
-0.052% |
A link the the original announcement can be found be clicking here.
Original article link: https://www.techuk.org/insights/news/item/17064-secretary-of-state-announces-baseline-profit-rate-2020-21
