Procurement at MOD
Doing business with defence: information for those looking to become a supplier or contractor.
Who we are
The MOD is one of the biggest public procurement organisations in Europe, managing some of the most complex and technologically advanced requirements in the world.
We are UK industry’s single largest customer, buying everything from military fighting vehicles to education services and all kinds of facilities management services.
What we do
We support our armed forces by providing world class solutions for delivering national defence and security for the UK whilst ensuring the best possible value for the taxpayer. Our procurement activity covers a very wide range of requirements including:
- technology: cloud and digital, network services, software and technology products and services
- equipment and support: ships, submarines, aircraft, vehicles, weapons, missiles, commodities and support (maintenance and repair)
- infrastructure: construction, hard and soft facilities management, property consultancy
Our supply base
The Strategic Defence and Security Review (SDSR) 2015 committed the UK to spending a minimum 2% of GDP on defence over the next decade. This commitment represents spending some £178 billion on defence equipment and support over that period.
In 2015/16 MOD spent nearly £19 billion with industry, accounting for over 40% of all UK government procurement spend and representing the fifth biggest defence budget in the world.
The size and complexity of many of our projects means that we need to work closely with our most important suppliers. These are currently Boeing, BAE Systems, Rolls-Royce, Airbus, Lockheed Martin, Thales, QinetiQ, Leonardo, MBDA, Babcock, Serco, Capita, AWE and HP.
The size and complexity of many of our projects means that we need to work closely with our suppliers to ensure delivery of the defence programme. We advocate the use of competition wherever appropriate both in our direct contract opportunities and throughout the supply chain.
Opportunities therefore exist for suppliers of all sizes, from large established defence contractors through to innovative smaller businesses, to get involved in our procurement activity both as a prime supplier and as a sub-contractor.
The programmes we support are detailed in the Defence Equipment Plan; the top 3 equipment programmes in terms of spend include:
- Future Strategic Tanker Aircraft
- Astute Attack Submarine
In addition we spend over £3 billion annually on infrastructure and defence estates.
Why choose us
We believe that the variety of our procurement activity coupled with the size of our spend makes defence an attractive place to do business. However we recognise that the size of the department can be daunting for prospective suppliers, and especially smaller businesses working with us for the first time. To address this we have launched a number of initiatives to make life easier for our suppliers.
- making it easier for smaller businesses to find opportunities and compete for contracts by introducing a new supplier portal. This approach is supported by our network of Supply Chain Advocates who are tasked with taking a proactive approach to attracting new suppliers to defence
- committed to continuously developing our commercial expertise and seeking innovative solutions for our customers in the armed forces
- making our procurement simpler and more transparent by introducing a new short form for terms and conditions and by publishing our pipeline
We advertise our requirements widely and use several channels to help suppliers access public sector contracts detailed below.
Our commercial policy priorities
We are committed to the best value for money in our procurement activity, and we are seeking to improve this further by:
- improving access to our market for new, innovative suppliers and particularly smaller businesses. We want at least 25% of our procurement spend to go to Small and Medium-sized Enterprises (SMEs) both directly and indirectly by 2020
- increasing visibility of our future contract opportunities through a published pipeline and advertising both direct and sub-contract opportunities in one place through enhancements to the Defence Contracts Online portal.
Spending more with SMEs
We recognise SMEs have a great deal to offer in promoting economic growth. We are working to help SMEs, including social enterprises and charities, gain a greater share of defence related business. For more information, please see our refreshed SME policy launched in March 2016.
How we procure
The European Union Procurement Regulations determine UK law for public sector procurements and alongside MOD procurement policy provide the main control framework for all procurements.
This means that, as a public sector organisation, we procure in a different way to industry eg competition as the default position, we set objective tender selection criteria, and we are fair and transparent and will be held accountable for procurement decisions in a way the private sector is not.
Our principles include non-discrimination (on grounds of nationality), equal treatment (of all suppliers), transparency (act in fair and non-discriminatory manner), mutual recognition (of equivalent documents and standards).
Our procurement activity is consistent with the Concept, Assessment, Demonstration, Manufacture, In-Service, and Dispose (CADMID) cycle.
Where to find contract opportunities
We advertise our tender and contract opportunities widely. We use the government’s Contracts Finder portal; here central government departments and other public bodies advertise tender and contract opportunities valued at £10,000 and above. Access to Contracts Finder is free of charge.
We also advertise tender and contract opportunities valued over £10,000 in the Defence Contracts Online (DCO) portal. Access and registration to the MOD’s opportunities in the DCO portal is free of charge. For sub-contracting opportunities, we suggest you also engage with Defence Contractors websites.
Our contract opportunities which fall within the scope of EU Public Procurement Regulation thresholds are additionally advertised in the Official Journal of the European Union (OJEU).
Requirements below £10,000 are often one off projects bought in accordance with our internal policy for low value purchasing.
Want to know more?
To find out about supplying defence and how we can help you please get in touch. The MOD’s Doing Business with Defence team provides advice and guidance to companies interested in becoming suppliers to defence. The team can provide help on:
- becoming a defence supplier
- accessing MOD tender and contract opportunities online and free of charge
- explain procedures and processes we use to buy a wide variety of goods and services.
You can meet the team at various exhibitions, seminars and ‘meet the buyer’ events each year at locations across the UK.
Doing Business with Defence Team
Poplar 1 #2119
MOD Abbey Wood
Telephone: 0151 242 2000
Innovation in the Defence Supply Chain
We want to encourage innovation in our business and attract new and non-traditional suppliers into all levels of the defence supply chain.
Our military customers highly regard innovation in their programmes and we expect this to be reflected in their future requirements. SDSR 2015 identified innovation as a central theme reflecting the changing global security and technology landscape.
Technology is creating both threats to and opportunities for the UK’s security and prosperity and innovation is vital to maintaining our military advantage.
We have set up a new Innovation Fund (£800 million over 10 years) to encourage better collaboration with industry, academia and allies, and target new providers to boost the competitive advantage of UK defence and find answers to our most pressing national security questions from across sectors at pace.
The Defence and Security Accelerator
The Defence and Security Accelerator which forms part of the Defence Science and Technology Laboratory (Dstl), focuses on innovations which can provide advantage to defence and national security to protect the UK from its adversaries. It funds the development of suppliers’ innovative ideas and provides support through to potential application.
The accelerator will also fund innovations for defence and security which support economic growth and prosperity in the UK.
The Defence Growth Partnership
The Defence Growth Partnership is a unique collaboration between UK government and leading companies from the UK defence industry. It has been formed to meet the challenges of increased international competition for defence business, and has created a collaborative environment to enable the UK to offer the very best solutions to defence customers, tailored to meet global customer needs, including the MOD.
UK Defence Solutions Centre
The UK Defence Solutions Centre (UKDSC) was established as an independent entity in 2015 and works to make the UK defence industry more successful in exports through:
- better alignment with UK government
- better collaboration within the UK value chain
- stimulating innovation and investment from a broad range of sources
Created as part of the implementation plan for the Defence Growth Partnership (DGP) and jointly funded by government and industry, the UKDSC works closely with the Department for International Trade’s Defence & Security Organisation (DIT DSO), the UK government, and the best of the defence industry, academia and research and development.
Innovate UK is an executive non-departmental public body, sponsored by the Department for Business, Energy & Industrial Strategy (BEIS).
They work with companies to de-risk, enable and support innovation and run competitions for funding in different industry sectors, including the Small Business Research Initiative (SBRI), and an open competition for applications from any sector. They also provide ‘connecting services’ including business advice for SMEs.
How to sell defence related goods and services overseas
The Department for International Trade Defence & Security Organisation (DIT DSO) Small Business Unit provides dedicated support for UK SME companies that are looking to win defence and security business overseas.
You can contact the DIT DSO Small Business Unit by emailing email@example.com
European Defence Procurement
The MOD is a member of the European Defence Agency (EDA), an intergovernmental Agency of the European Council.
The EDA supports the member states and the council in their effort to improve European defence capabilities. Work is ongoing and focused on:
- access to markets
- information and funding
- defence research and technology
- ‘cluster building’
- business innovation
The EDA’s Defence Procurement Gateway provides defence related business opportunities and information at the EU and national level.
Contracting, Purchasing and Finance (CP&F) tool
The MOD is currently developing a replacement system for its procurement tools. The CP&F system will provide a single end to end capability by providing significant change opportunities for the MOD and suppliers in terms of improved contract visibility. It will enable a more efficient, effective and reliable process as well as providing timely management information.
All existing paper processes will be replaced providing a significant step toward the government directive that all procurement action is to be electronically conducted by 2017.
Find out more about the new system and how it will be implemented here.
MOD supplier invoicing and payment information
- Defence Business Services (DBS) payment performance, invoice processing and MOD contract payments information
Mystery Shopper Scheme
The Crown Commercial Service’s Mystery Shopper Scheme provides a route for suppliers and potential suppliers, especially SMEs, to raise concerns about public procurement practice.