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Selling to the MOD Edition 20 Doing Even More to Help UK Smes Win Overseas Business

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Selling to the MOD Edition 20 Doing Even More to Help UK Smes Win Overseas Business Selling to the MOD Edition 20 Doing even more to help UK SMEs win overseas business HM Government has identified increasing exports Our website: and providing greater support for SMEs as key – offers a wide range of essential advice, information and support for measures in rebuilding and growing the UK you to access in relation to defence economy. UKTI DSO has launched an all-new and security exporting – provides details of UKTI DSO interactive, versatile and content-rich website assistance and how to engage that will maximise support for UK SMEs seeking with us – connects you to other sources of to win overseas defence and security business. Government and non-Government support and services. The site offers three levels of entry: New to exporting – understanding the rewards and risks surrounding export marketing. Preparing for market – getting in good shape to export. Access new markets – for experienced exporters looking for fresh opportunities. www.ukti.gov.uk/defencesecurity/supportforsmes.html Visit the website today to increase your trade potential Introduction Contents We hope that this publication, compiled by the Small Wonder – The Case for SMEs in Defence 05 Defence Suppliers Service, helps you understand Defence Organisation 06 Defence and the opportunities that exist to become Defence Vision 06 a supplier to the MOD. Defence Equipment and Support 06 It has been compiled very much with newcomers The Future Head Office Senior Structure and New Head Office Concept 06 in mind and contains a wealth of information on DE&S and MOD procurement teams as well as points MOD Commercial 07 of contact not just within MOD but also, recognising The Defence Equipment Plan 2012 07 the importance of supply chain opportunities, within MOD DCO Portal / MOD DCB 07 our major prime contractors. Guide to MOD DCO / MOD DCB Contract Notices 08 Philip Margerison and Dawn King Defence Suppliers Service Advertising Industry Days and Industry Briefings Within MOD DCO / MOD DCB 08 Supplier Relations Team 09 CADMID Lifecycle 09 Official Journal of the European Union 10 PCR 2006 and DSPCR 2011 – From 1 January 2012 10 Tenders Electronic Daily 11 Defence and Security Public Contracts Regulations 2011 11 Contracts Finder Portal and the Government’s Transparency Agenda 12 Winning the Contract Course 13 Measures to Increase Opportunities for SMEs to Participate in Government Procurement 13 Summary of Intellectual Property Policy 13 Contact Point Details for Key Suppliers to the MOD 14 DBS National Security Vetting 15 Security Clearance 15 Private Finance Unit 15 Published by: ICS Catalogue 16 The MOD Framework Agreement for Technical Support 16 Defence Electronic Commerce Service 16 21st Century Supply Chains Programme 17 Telephone: 0141 332 8247 Contact Points 17 Email: [email protected] TRADE ASSOCIATIONS 18 Web: www.bipsolutions.com Design: [email protected] LOCAL ENTERPRISE PARTNERShIPS 21 Publishing: [email protected] DE&S OPERATINg CENTRES 24 Advertising: [email protected] DIRECTORY OF PRIME CONTRACTORS 39 V4-W-131028 Selling to the MOD :: Edition 20 3 The official source of UK MOD contract opportunities The MOD represents a huge market opportunity for your company Registration on MOD DCO is absolutely free and brings you access to the following features: >> 24/7 Online Search >> Bespoke Daily Email Alert >> MOD Defence Contracts Bulletin (MOD DCB)* MOD DCB is the only official paper source of MOD contract opportunities and brings you: >> All UK MOD Contracts worth over £113,057 >> News and Reports >> Important MOD Announcements >> Special Feature Articles Find out more about MOD DCO or register FREE at: www.contracts.mod.uk * Available through annual subscription DCO - S2MOD (FP).indd 1 4/29/13 4:31 PM Small Wonder – The Case for SMEs in Defence The principal motivation to increase SME participation does not stem from a belief that Small and Medium-sized Enterprises are ‘more saintly’ than other firms. Neither does it reflect pressure on the Ministry of Defence to ‘do its bit’ for UK recovery on the basis that SMEs are the backbone of the British economy and therefore should be encouraged to grow, increasing employment and exports (although all of that is true). The real motivation for ensuring SMEs have better access is actually more parochial: better value for money. Back in the 1980s, the appointment of Peter Levene (later Sir Peter Operational Requirements (UORs) for Iraq, Libya and Afghanistan. As and now Lord Levene of Portsoken) as Chief of Defence Procurement well as having a strong customer focus, SME staff are more likely to be saw the adoption of a ‘competition by default’ policy, and at the same able to respond rapidly to requests for quotations without the need to time an acceleration in supply base rationalisation through mergers get sign-off from successive layers of company hierarchy. Indeed, large and acquisitions and a few market exits. Bringing new suppliers into firms may even be unwilling to take on some small-scale requirements. defence thus became essential if we were to sustain competition, and Whatever the merits of SMEs, however, there will always be a large so effort was devoted to promoting defence opportunities to a wider element of MOD procurement that exceeds their physical or financial market and making MOD a little less impenetrable for new suppliers, capacity. In 2010/11, some 42% of new MOD contracts exceeded including, of course, small businesses, which might in time grow and £100 million in value. Although we should not debar any company on challenge the ever-shrinking core of established prime contractors. The the basis of some arbitrary turnover-to-contract value ratio without a emphasis on competition has of course endured and been reaffirmed proper CAAS analysis of its true capacity, the fact is that small firms are in the ‘National Security Through Technology’ White Paper, published in unlikely to be able to take on very large contracts and statistics show February 2012. The need to ensure a competitive supply base therefore that most MOD contracts with SMEs are well under £20 million. This also endures. would make it very difficult or impossible for the MOD to achieve the There is also the realisation that SMEs are often a good source of Coalition Government’s aspiration that 25% of government spend new ideas and innovation. Indeed, should go to SMEs. However, some SMEs are created purely SMEs do not only bring value to provide inventors with routes and innovation as direct to market in order to capitalise suppliers to MOD; in many “Bringing on their ideas; while for many, cases, they contribute very “There is a clear innovation is their ‘unique selling effectively as sub-contractors new suppliers point’ that enables them to exist or lower-tier players in the expectation at all in a market often dominated supply chain. Although MOD by larger companies with must not ‘interfere’ in the prime into defence established markets, significant contractor’s management on all involved capital and vast economies of of its supply chain, there is scale. Innovation (often but not much it can and should do to became always technology based) is what encourage the right behaviours in public drives the world forward but it in terms of access, fair essential if we has particular value in defence competition and reasonable sector and security where the military treatment (including prompt threat constantly advances and payment) of sub-contractors. were to sustain needs new counter-measures to The old adage of ‘eyes on, procurement secure or maintain operational hands off’ still applies, noting competition” advantage. So as well as providing that asking the right questions to ‘think SME’ “ value for money through can have a powerful influence increasing competition and on behaviour. keeping the ‘big boys’ on their The ‘SME agenda’ has toes, SMEs can often provide genuinely better solutions. political support from all the major parties as the importance of SMEs Another myth is that big companies are always cheaper because to the economy and to delivering good value for public goods and they benefit from and can pass on economies of scale. After all, you services is very much ‘common ground’. Neither is this recognition wouldn’t expect to buy a cheap car from a tiny niche manufacturer confined to the UK; the European Defence Agency has developed who only turns out a handful each week. The tendency, however, is guidelines for increasing SME involvement in defence and hosts an to assume that the same logic applies in all cases, which it does not. annual meeting of Member States to spread best practice and find Economies of scale only benefit the customer if they outweigh the new ideas. organisational overheads carried by the supplier, and if the market There is a clear expectation on all involved in public sector drives the supplier to pass those benefits to the customer. Very small procurement to ‘think SME’. This does not mean slanting the ‘playing companies are unlikely to have a dedicated personnel department, a field’ in favour of SMEs (which would run counter to EU law and big marketing budget or a huge boardroom pay bill, all of which gets competition policy) but it does mean looking at the playing field from added to charging rates and prices. all angles to detect where it might actually be slanted away from SMEs, There is also the classic market dynamic to consider: whether the albeit unintentionally. In other words, every procurement strategy customer or the supplier holds the balance of power in the commercial needs to be looked at from the point of view of the smaller supplier relationship. Small businessmen may not be ‘angelic’ by nature but looking for opportunities to contribute, whether directly as part of a having a very large personal stake (quite possibly their home) in hock to consortium with other SMEs or as a sub-contractor.
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