UK MoD: 51 Per Cent of New Defence Contracts Let Without Competition in 2025/26, the Highest Since 2015/16
London, 1 October 2026
Key points
- The Ministry of Defence's trade, industry and contracts statistics, published on 1 October, count 1,134 of 2,221 new contracts in 2025/26, 51 per cent, as let non-competitively: up from 49 per cent in 2024/25 and 40 per cent in 2020/21, and "the highest level of single sourcing since 2015/16", when it was 55 per cent
- New contracts fell by GBP 5.1 billion to a provisional GBP 16.4 billion. Payments to industry rose to GBP 43.4 billion, 3.2 per cent up after inflation, plus GBP 744 million through US Foreign Military Sales; 47 per cent of payments ran through non-competitive contracts, up from 45 per cent
- Over half the GBP 2.1 billion rise in non-competitive payments came from single-source work with Rolls-Royce on the Unity submarine-reactor contract and with BAE Systems on the Future Combat Air System; the top ten suppliers took 40 per cent of procurement spending, BAE Systems alone 16.5 per cent
- Major Equipment Projects data "has not been produced since 2024" and the section has been removed; the ministry points to the Major Projects Annual Report of the National Infrastructure and Service Transformation Authority (NISTA)
More than half the new contracts Britain's defence ministry placed last year were let without competition, and the section that showed how its biggest projects perform has gone from the same publication.
The count moved without single-source contracts increasing. Direct-sourced contracts fell by 35, to 1,134, while the total fell by 177, so the rest shrank by about 140; the share rose because fewer contracts were competed. By value, 35 per cent of payments went through competition, unchanged on the year. Above GBP 100 million, the ministry placed 24 contracts worth GBP 9.7 billion, against 29 worth GBP 14.2 billion a year earlier, when the eight-year Unity contract with Rolls-Royce Submarines inflated the total.
The large suppliers are paid on terms that follow the programmes. BAE Systems' competitive share of its MoD income was 8 per cent in each of the last two years, driven by Dreadnought, AUKUS and Tempest; Babcock is the most MoD-dependent of the ten, at 63.5 per cent of its global revenue. Since 2014 the Single Source Regulations Office has governed the pricing of uncompeted contracts.
The headline rose because the ministry competed less, not because it single-sourced more, and the money behind uncompeted spending sits in submarines and combat air, where Britain has chosen to have one supplier. That makes the dropped section the more consequential change in this year's release. The series still shows how much goes uncompeted; it no longer shows how the large projects perform, which now has to be read in NISTA's report on the government's whole portfolio, beside rail and hospitals. Single sourcing is a cost question only where uncompeted projects overrun, and the defence statistics have stopped carrying the evidence. The 51 per cent was the British line in Signal No. 159.
