More from MOD on promoting SMEs in the supply chain

We featured the first part of the UK Ministry of Defence's response to our questions on their use of smaller suppliers (SMEs) on Tuesday. Here’s part 2 of their FOI response.

“I can assure you that the MOD is committed to making its procurements easier and more accessible for SMEs. The White Paper - National Security Through Technology: Technology, Equipment, and Support for UK Defence and Security, which was published on 1 February 2012, sets out our ‘open procurement’ philosophy which we expect to benefit innovative and competitive SMEs; and Section 5 of the paper sets out specific aspects of our strategy for improving SME access.

A number of measures are already firmly in place driving improvements. These include:

  • The MOD Defence Suppliers’ Service which is dedicated to helping prospective new suppliers through a helpdesk and ‘outreach’ service and a popular ‘Selling to the MOD’ brochure
  •  A Small Business Unit within UK Trade and Investment which is operating a ‘charter’ scheme to help SMEs identify and pursue export opportunities.
  • The Centre for Defence Enterprise which provides an important ‘gateway’ between the Department and innovators with new technologies offering potential defence applications. This role is to be expanded and its processes enhanced in response to industry feedback.
  • The MOD Framework Agreement for Technical Services which has been successful in streamlining the procurement of technical support, opening up that market with almost 400 companies, around 100 of whom are SMEs.  A new Framework is to be launched in April 2012 which introduces a number of improvements in response to feedback from SMEs and others.
  • The launch in April 2012 of a simplified standard template for lower-value contracts, i.e. under £250k to improve consistency and reduce bureaucracy

We recognise the importance of an effective channel of communication with SMEs. The Minister for Defence Equipment, Support and Technology chairs an ‘SME Forum’ for SMEs and their trade representatives, allowing issues to be aired directly with Government and senior officials.  The MOD is also a signatory and supporter of the Aerospace | Defence | Security ‘21st Century Supply Chains’ programme, where customer organizations work coherently together to improve the efficiency and competitiveness of the supply network; and we have appointed a senior ‘SME Champion ‘ to oversee commercial policy development in relation to SMEs and supply chain companies.

These initiatives have been extremely well-received by small businesses and we are confident that our drive to improve access for SMEs is starting to deliver results.  As evidence of the progress that is being achieved, the attached link gives 12 Case Studies of SMEs who have bid for, and been successful in winning Defence contracts”.

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Good stuff from MOD.  And as an MOD source said to me, “given the nature of MOD business, really any other Department should be able to do better than us on SME spend!” That’s true when you think about how much MOD business just isn’t suitable for smaller firms, but in fact MOD does seem to out-perform many other departments on this measure.

That's probably becuase MOD have done more than most to promote this agenda for some time. My memory of looking at this issue from the inside (as a consultant to government  a few years back) is that MOD were ahead of the game compared to almost all other departments – and I suspect that’s still true.

So, looking at yesterday and today’s comments, a very interesting response to our FOI. It’s clear we can’t fully trust the Cabinet Office data on SMEs yet, but praise to MOD for both their honesty and the positive actions they are talking in this field.

First Voice

  1. Marcus Gibson:

    We produce a comprehensive national index of UK-based SMEs, mostly involved in technology.. I do have some sympathy with the MoD, first because many SMEs make only parts for large systems and they leave it to large integrators to deal with sometimes hundreds of SMEs. Secondly, a large, and growing, number of SMEs are foreign owned, manufacture abroad or are door-knob subsidiaries only, not the thrusting UK manufacturers one might imagine them to be.. Sadly, the halving of the UK’s engineering sector after 1997 cannot be recovered from with any speed.
    Marcus Gibson,
    Gibson Index Ltd

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