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SSRO Baseline Profit Rate 2017 recommendations as accepted by the Secretary of State for Defence

The Secretary of State for Defence has accepted the SSRO profit rate recommendations for 2017. See the following link SSRO 2017 baseline profit rate recommendations

The rate applies to contracts signed or becoming a qualifying defence contract or qualifying subcontract from 1st April 2017 through 31st March 2018. 


Element          2016 rates       2017 rates
Baseline Profit Rate (BPR) (% on contract cost) 8.95% 7.46%
Fixed Capital Servicing Rate (% on Fixed Capital employed) 5.08% 4.84%
Working Capital Servicing Rate (% on positive Working Capital employed) 1.40% 1.37%
Working Capital Servicing Rate (% on negative Working Capital employed) 0.74% 0.59%

 New for 2017 is the SSRO funding adjustment at                                                                     -0.025%

Interestingly the UK MoD has retained a single baseline profit rate and not gone forward with the SSRO's proposal for multiple baseline profit rates across different work types. This is the second year that the UK MoD has pushed back against the SSRO proposals - Ouch!!.