The Single Source Regulations Office (SSRO) has challenged £61M of potentially nonallowable costs, whereby contractors charge unnecessarily for goods or services that could result in savings to the taxpayer.
The independent regulator has examined a number of ‘single source’ contracts, where the Ministry of Defence chooses to work exclusively with a company. The SSRO has already saved the MOD and the taxpayer £9.9M by reducing the baseline profit rate on contracts signed in 2015/16 from 10.7% to 10.6%, and £3.5M based on the first four MOD contracts using the 2016/17 rate of 8.95%.
The SSRO’s Interim Compliance Statement, published on 14th July, found that contractors’
conformity to the regulations has been ‘poor’.
Using a traffic light system of Red Amber Green, the SSRO found that six out of eight indicators flashed up ‘Red’. One indicator reports that only 9% of MOD contractors’ reports provided the required information.
The quality of information submitted remains a ‘serious concern’, with ‘incomplete calculations, facts and information’.
SSRO Chairman Clive Tucker said: “For too long single source defence procurement went without effective scrutiny, and this is precisely the sort of inappropriate expenditure that the Defence Reform Act was enacted to kill off.
“Through the single source regime we want to encourage improvements from both industry and the MOD resulting in better value for money for the taxpayer. The findings on military equipment in Sir John Chilcot’s report are a timely reminder of the importance of efficient and effective defence procurement and strong contract management and oversight to ensure equipment reaches the frontline commands on time and on budget.”
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Clive Tucker MOD Procurement & contracts Single Source Defence Procurement Sir John Chilcot SSRO UK
Post written by: Vicky Maggiani
Vicky has worked in media for over 20 years and has a wealth of experience in editing and creating copy for a variety of sectors.
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