My predecessor, Peter Luff, announced updated Government profit formula (GPF) allowances to the House on
The work on new single source pricing regulations (SSPRs) and the replacement of the review board with a more empowered public body, the Single Source Regulations Office (SSRO) is proceeding well and we currently plan that these will be fully implemented in 2014-15. In the meantime the MOD will be seeking to negotiate new SSPR terms into selected high-value single source contracts during 2013-14.
One aspect of the existing regime that Lord Currie recommended should be retained is the methodology behind the Government profit formula as far as the calculation of the baseline profit rate and capital servicing allowances are concerned. Accordingly, the review board has recently completed its 2013 general review and has recommended revised GPF allowances. The Government have accepted the board’s recommendations and the updated allowances have been agreed with industry, to be implemented on new single source work from