§ Viscount Davidson
asked Her Majesty's Government:
What were the conclusions of the report by the Review Board for Government Contracts on the 1994 Annual Review of the profit formula for non-competitive government contracts.
§ Lord Annaly
The Government have accepted the overall target rate of return on capital employed as recommended by the review board in its report. The new rate will be 18.2 per cent., compared with the current rate of 19 per cent., both on the basis of historic costs. It will be effective from 1 April this year. There are other points arising from this report and from the board's report on the Seventh General Review last year, which officials will be discussing with the CBI as part 59WA of our continuing drive to secure maximum value for money from our defence contracts and ensuring a fair return for our contractors. Copies of the report are being placed in the Library of both Houses.