SME access to Defence contracts
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The document provides an overview of opportunities for UK small and medium enterprises (SMEs) to engage with major defence programmes. It discusses UK government targets to increase procurement spending with SMEs to 25% by 2020, and changes being implemented to simplify engagement for SMEs. Direct opportunities are available through websites like Defence Contracts Online, and SMEs can also engage with prime contractors, original equipment manufacturers, and trade organizations. The document offers advice on how SMEs can identify, compete for, and win defence contracts, including being prepared with necessary accreditations and processes. It emphasizes the importance of understanding customer requirements and offering a compelling value proposition.
SME access to Defence contracts
- 1. SME engagement in Major Defence programmes
- 2. Agenda • Overview of the opportunity • UK Government Targets • What's Changing • Direct opportunities • Prime Contractors and OEM’s • Is your business prepared • Ways to identify; compete and win
- 3. Overview of the opportunity • £8.5 Bn UK Defence Exports (FY 2014) • £19.6 Bn UK MOD spend (FY 2014) – This represents 40% total Government spend to 3rd Parties • Only £832M direct spend with SME’s • This was spread between 7000 SME’s • Average spend of £120K • Value of spend indirectly reaching SME’s estimated below £3Bn.
- 4. UK Government Targets • 25% target for MOD procurement spend to reach SME’s by 2020 – Defence Infrastructure Organisation - DIO – Defence Equipment and Support – DE & S – Information Systems and Services - ISS – Defence Science and Technology Laboratory – DSTL (some restrictions) • NAO report showed current achievement of 19.4% – However this report questions the measurement criteria
- 5. UK Government Targets • Achieving the 25% target relates to circa £5Bn being spent with SME’s by 2020 if spend is equal.
- 6. What's Changing • SME Policy refresh – Focus on entire Supply Chain –not just direct – Reducing Procurement Bureaucracy – Simplifying Engagement – “MOD Supply Chain Development Advocate and Champions”
- 7. What's Changing • Review the effectiveness of the Defence Suppliers Forum - SME • Supplier Engagement Portal – through gov.uk website – Policy and Process – Links to research establishments and funding streams – Increase awareness of how to find opportunities • Abolition of PQQs for contracts below £100k • Creation of Common core PQQ – reusable • Simplified template contracts for values below £250k • Increase in “lotting” strategies and outcome based specifications
- 8. Direct Opportunities • Defence Contracts Online - DCO – Free service – All MOD opportunities above £10k - www.contracts.mod.uk – Daily Alerts by email – Searchable by CPV (Common Procurement Vocabulary) codes, or standard phases e.g. military vehicles Example requirements 31/05/16 • Industry CPV code 38540000 - Machines and apparatus for testing and measuring. Est value - between £113k - £348k • Industry code 19212310 - Canvas Items and Other Soft Trim Accessories. Est value - £700k • Industry CPV code 45223210 – Structural Steel Works. Est value – between £870k - £4.5m
- 9. Direct Opportunities • Defence Contracts international – DCI – Subscription based service – International Defence contracts – Market intelligence reports – Spend Analysis – product; country; business etc. • Contracts Finder Portal – Central Government and wider Public Sector opportunities above £10k - https://www.gov.uk/contracts-finder • Bluelight Emergency Services e-tendering- https://bluelight.eu-supply.com • Opportunities below £10k advertised regionally
- 10. • Major Defence Programmes through Primes and OEM’s – Example primes – Airbus; BAEs; Thales; Lockheed Martin; Babcock; General Dynamics etc. – Example OEM’s - Kelvin Hughes; Ultra Electronics; Cobham; Meggitt etc. • Two types of requirement – Standard services & equipment • Usually well established Supply Chain in place. – Innovative products and processes • Issue to identify route to entry. Prime Contractors and OEM’s
- 11. • Traditional challenges for SME’s – Unbalanced negotiations – Identification of opportunities – Fear of loss of IP – Flow of Risk – Unfamiliar contract terms – Compliance issues to specific standards, quality; safety; environmental etc. – Export controls and constraints Prime Contractors and OEM’s
- 12. • Changing market – Primes being incentivised to use SME’s (UK MOD and others) – Recognition of specific Engineering and Skills gaps. – Balancing a stable core capability. – Moving away from Prime Vendor lock-in • Interoperability • Common standards • Joint operations • Currency of technology • Speed of Innovation Prime Contractors and OEM’s
- 13. • This is impacting the business relationship – More flexibility on terms and conditions – Support for compliance – More equitable Risk share – Security of IP – Process improvement – Joint development Prime Contractors and OEM’s
- 14. Prime Contractors and OEM’s • Opportunities to Engage – Defence Events “Meet the Buyer” / Prime contractor engagement villages • DPRTE (Defence & Procurement; Research & Technology; Exportability) • Farnborough International • DSEi (Defence & Security Exhibition International) • DVD (Defence Vehicle Dynamics) • Armoured Vehicles • and more – Meet the Technologist events (UKTI) – Supplier days Programme specific
- 15. Prime Contractors and OEM’s • Opportunities to Engage - continued – Direct contact to bidders, identified through DCO • Shows which companies invited to bid. • Name and details (address, tele, email) of point of contact – Prime / OEM specific supplier registration routes • E.g. General Dynamics Supplier Registration Portal https://suppliers.gendyn.com/ – Industry knowledge and contacts – intermediary – Trade bodies – ADS; FAI; WEDA; NEAA; NDA(EEF); etc.
- 16. • Do you understand the policies and standard terms – Access the Commercial Toolkit - www.gov.uk/acquisition- operating-framework – Free to use – Guidance on policy; DEFCONS and DEFFORMS • Cyber Security – are you protected – Jan 1 2016 Cyber Essentials & Cyber Essential + Is your business prepared
- 17. • Do you hold relevant standard accreditations – Quality; safety; environmental etc. • Are your business processes robust – Change management – TLS – Supply management – Etc. Is your business prepared
- 18. • Are you registered on SID – Supplier Information Database – Free – MOD acquisition staff use for sourcing • Do you have access to DCO / DCI – Experienced in how to use the tools • Existing relationships with Primes / OEMS Identify, compete and win
- 19. • Collaborative working • Established proposal management process • Understanding the requirement and drivers • Value proposition – How to help the Prime meet the end customer needs. • Compelling, economic offering. – Develop offerings that profitably add value Identify, compete and win
- 20. The value proposition Relevance Differentiator Quantified value VP
- 21. Background • Defence and Aerospace sector since 2003 • National and International Bids and Projects • Supported Industry Primes; OEM’s; SME’s and MOD – This has provided me the opportunity to understand the cultures, working practices and issues for both Industry and end customers. – Wide network of contacts. – Currency of Market knowledge.
- 22. Contact details Tel: 02036930528 Mbl: 07769907938 Email enquiries@optimatrix.co.uk OptiMatrix Alexander House Wilbury Way Hitchin Hertfordshire SG4 0AP