Key Recommendation 3:

DEFCON 648A should be modified from what is currently an overly protective regime to one that more strongly encourages contractors to reduce their cost base. We propose that the current 5% threshold, above which MOD receives automatic sharing, should be increased to 10% or 15%. We also recommend that the 75% MOD sharing arrangement might be better set at a lower percentage, such as 50%. We welcome views on these options, and alternatives, in the consultation phase.