6. Since the 1990s the Department's internal guidance has set a default threshold for post-costing of single source contracts, at £10 million. This does not preclude the inclusion of contracts of lesser value, nor the exclusion of contracts above £10m where there is no utility to the MOD in conducting a post-costing. An increase in the average length and value of contracts over the past two decades, combined with a decrease in the staff resources available for post-costing, has led to a downturn in recent years of the numbers of post-costed contracts.
7. The MOD is addressing this issue and increasing the level of resource targeted at post-costing. The emphasis will be on selection of contracts for their utility in future pricing but the value of a contract will also remain a significant factor in the decision to request post-costing data from a contractor, particularly as the relatively new DEFCON 648A allows for the sharing of excess profits and losses.