Ministry of Defence
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MOD contract rules changes could save £200 million a year

New proposals could save taxpayers hundreds of millions of pounds by changing the rules which govern how MOD contracts are awarded.

The new Queen Elizabeth Class carriers have been bought under the current single source procurement system

The proposals to reform single source procurement regulations, set out by Defence Secretary Philip Hammond today, form part of the government’s Better Defence Acquisition White Paper, which has been published by MOD.

It outlines plans to establish a new, independent body which would oversee contracts that have to be awarded without competition, either because of specialist Armed Forces requirements or national security reasons.

Almost half of the money spent on defence equipment every year is awarded through single source procurement under a system that has been largely unchanged since 1968. Astute and Successor submarines, Type 45 destroyers and the Queen Elizabeth Class carriers, and Typhoon fast jet engines are just some of the equipment that is bought and maintained this way.

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