By simplifying Ministry of Defence (MOD) contracts, the Department is making it easier for small businesses to work with Defence. The Department has reduced the number of pages of small and medium-size enterprise (SME) contracts from a minimum of 18 pages (usually around 50) to just three. This is part of the commitment made in the 2015 Strategic Defence and Security Review (SDSR15) to spend 25% of procurement money with SME suppliers by 2020: the figure currently stands at 19%, with about 5000 firms supplying the MOD and contracts worth £822 million in 2014/15.
Minister for Defence Procurement Harriett Baldwin said:
Acting on direct feedback from industry, we have introduced a simplified contract with three pages for terms and conditions compared to at least 18, and often more, in our previous low value contracts. This is part of a wider programme of work to encourage smaller businesses to get involved in Defence.
Alongside the simplification of contracts, the MOD is also working to ensure small suppliers are paid quickly, in order to make Defence a viable partner for businesses across the UK. SME’s are also a vital element of the government’s Innovation Initiative, which aims to harness the ingenuity and entrepreneurship of all kinds of business in order to provide solutions to key Defence challenges. That’s why the MOD has created a £800m Innovation Fund which will support fresh and innovative ideas from across and beyond the Defence sector.
The MOD’s investment in innovative solutions demonstrates how the Government’s £178 billion equipment plan, supported by a rising Defence budget, is ensuring our Armed Forces have the most effective and innovative capability available. The Innovation Initiative aims to strengthen the Defence partnerships which make such projects possible, keeping the UK safe and secure in a complex world.