Procurement at MOD

Details of Ministry of Defence purchasing arrangements and information for those looking to become a supplier or contractor.

The Ministry of Defence (MOD) buys a wide variety of products and services ranging from clothing to satellite communication systems. In the financial year (FY) 2012/13 the MOD spent approximately £18.5 billion with third parties to buy and support all the equipment and services that the armed forces need to operate effectively. This equates to between 40 to 45% of total government spend with third parties. In FY 2012/13 it placed approximately 3,300 new contracts.

The MOD is British industry’s single largest customer. It recognises that small and medium-sized enterprises (SMEs) have the added advantage of being able to combine innovative thinking with an agile and flexible approach and is reaching out to SMEs to compete for opportunities.

The white paper ‘National security through technology’ sets out a range of measures that we are taking to improve access to defence and security contract opportunities for SMEs. The MOD also has a specific SME Action Plan which describes the work we are doing to support and encourage small and medium-sized enterprises (SMEs).

European procurement law

All public procurement in the UK is subject to the Treaty on the Functioning of the European Union (TFEU). In procurement terms, the TFEU seeks to ensure a free market in goods, services and works across the EU. The TFEU creates an obligation for all public bodies (including MOD) to adhere to certain principles when seeking to procure goods and services that are subject to the EU Regulations.

These principles are:

  • non-discrimination (on the grounds of nationality)
  • equal treatment (of all suppliers in any procurement context)
  • transparency (so that all parties can see that MOD is acting in a fair and non-discriminatory manner)
  • mutual recognition (of equivalent documents, standards and certificates from other EU Member States)
  • proportionality (in essence ensuring that MOD only does what is necessary for or proportionate to what it is seeking to do)

How to sell to defence

The MOD Defence Contracts Online (MOD DCO) portal provides all suppliers and potential suppliers to the MOD with free, online access to relevant MOD tender and contract opportunities with a value of over £10,000. The MOD DCO provides a gateway to new business opportunities for companies large and small who wish to compete for defence business, either directly as a prime contractor or indirectly as a sub-contractor.

Registering for the MOD DCO Portal

To register your company on the portal, you should visit the Supplier Registration’ page and submit your details to BiP Solutions Ltd. You will then be given a unique user ID and logon to access, free of charge, all MOD’s publishable tender and contract opportunities valued at £10,000 and above.

Access to other UK, European and global opportunities relating to defence, security, emergency services, humanitarian aid, counter-terrorism and homeland security markets are also available through optional value added subscription based services via the MOD DCO portal. This information is provided by BiP Solutions Ltd entirely independently of MOD.

MOD Defence Contracts Bulletin (MOD DCB)

The fortnightly MOD DCB publication continues to be available on subscription at a cost of £295 per annum. MOD DCB contains contract announcements with a value of over £111,676 in addition to exclusive news and features on developments within MOD, its supply chain and the defence sector.

Contracts Finder

All relevant MOD tender and contract opportunities valued at £10,000 and above and which meet the relevant criteria are also advertised in the Contracts Finder portal as well as in the MOD DCO portal.

Contracts Finder is the main source of government contracting opportunities worth more than £10,000.

MOD DCO/MOD DCB contract notices

MOD prior information notices (PIN)/MOD requests for information (RFI)

These sections provide information on how to effectively seek engagement with industry on requirements which are exempt from the Official Journal of the European Union (OJEU) procedures, prior to the formal contract notice seeking expressions of interest. PIN forms are to be used to advise the market of forthcoming procurements. RFI forms may be used to obtain information (such as ROM costs) which, in turn, may inform procurement strategy decisions.

MOD contract notices/MOD voluntary transparency notices (VTN)

The MOD contract notices are specifically designed for competitive requirements and to seek expressions of interest. The MOD VTN is also a purposely designed form for making non-competitive announcements to advertise sub-contract opportunities and allow challenge to single source strategies.

Contract bidders notices

This section applies to all competitive requirements, both those subject to and exempt from OJEU procedures and identifies which organisations have been invited to tender. Contract bidders notices list the names, addresses and contact details of the companies that have been invited to tender for the requirement.

MOD competative and non-competitive contract awards

These sections provide notification of the award of a contract for either a non-competitive requirement or a competitive requirement.

Addendum

Amendments to contract notices previously published in the MOD DCO/DCB made after their original publication are included in this section.

Sub-contract opportunities

This section allows MOD prime contractors and private sector organisations to advertise any sub-contract opportunities valued at over £40,000 arising from their prime contracts with MOD

Dynamic pre-qualification questionnaire (DPQQ)

The dynamic pre-qualification questionnaire (DPQQ) is a new application in the MOD DCO portal that allows MOD commercial staff to create an electronic PQQ that is issued as part of the contract notice. The purpose of the contract notice is to alert potential suppliers to MOD of forthcoming tendering opportunities so that they can express an interest in bidding for them if they wish to do so. Potential suppliers can express an interest by completing the DPQQ online.

The benefits of the DPQQ for both MOD and industry are:

  • saving up to 28 days by combining 2 parts of the procurement procedure. This will be of particular benefit to SME companies
  • reducing the effort to create a PQQ as the templates are already loaded on the MOD DCO portal
  • reducing the effort to complete the PQQ as suppliers can store information on their capabilities on the MOD DCO portal which can be used for other PQQs

The DPQQ will also:

  • simplify current processes for the benefit of both buyers and suppliers
  • standardise, as far as possible, the pre-qualification process for suppliers, while allowing buyers to tailor the questions to meet the specific requirements of the procurement
  • remove costs for paper, printing and postage
  • remove duplication, ‘do it once’ ethos for suppliers to complete once and reuse
  • reduce inconsistency, MOD commercial staff will use standard agreed templates
  • increase transparency of the selection process and approach to evaluation
  • increase efficiency by encouraging MOD commercial staff to only seek necessary information

Contact us for advice and guidance about selling to the MOD

The Defence Suppliers’ Service (DSS), part of the Supplier Relations Team (SRT), provides advice and guidance to all UK and overseas companies interested in selling to the MOD. The vast majority of the 1,000 or so enquiries it receives and responds to each year are from SME companies.

DSS staff can explain:

  • how to become a defence supplier
  • how to access MOD tender and contract opportunities
  • some of the procedures and processes that the MOD uses to buy a wide variety of goods and services

The DSS does not become directly involved in sourcing goods and services or in placing contracts on behalf of MOD. It does not have visibility of such contracts. It acts purely in an advisory capacity by:

  • operating a Defence Suppliers’ Service help desk facility;
  • providing an overview of how MOD acquisition is undertaken and the various procedures that are in use;
  • providing information packs about becoming a defence supplier, which includes the ‘Selling to the MOD’ brochure
  • providing points of contact of the various MOD acquisition teams who may have an interest in and possible future requirement for the goods and services a company can provide. This allows the company to contact the MOD acquisition teams directly to discuss possible future business opportunities:
  • attending around 50 exhibitions, seminars and ‘Meet the Buyer’ events across the UK each year to provide advice and guidance to companies wishing to sell to the MOD and giving ‘Selling to the MOD’ presentations, where appropriate

DSS Contact Details

Defence Suppliers’ Service
Supplier Relations Team
Poplar 1 #2119
DE&S
MOD Abbey Wood
Bristol BS34 8JH

Tel: 030-679-32844 (for UK companies) Tel: 0044 (0) 117 913 2844 (for overseas companies) E-mail: dessrt-dsshelpdesk@mod.uk

The Commercial Toolkit

The Commercial Toolkit is:

  • available to MOD staff and industry
  • contains guidance on a wide range of procurement and commercial policy topics
  • provides access to the DEFCONs (Defence Conditions) and DEFFORMS (Defence Forms) the majority of which are included in all MOD tenders and contracts and others on a case-by-case basis
  • free use, requires a no-cost registration visit Acquisition operating framework (AOF)

Winning the contract: free online course

The free ‘Winning the Contract’ course, hosted by learndirect on behalf of the Department for Business, Innovation and Skills provides an introduction to the public sector and the procurement process.

How to sell goods and services overseas

The UK Trade & Investment Defence & Security Organisation (UKTI DSO) provides support to companies through a range of services. More information for UK defence exporters is available on their website.

Ministry of Defence payment performance

Year 2012/13

The MOD is a signatory to the Prompt Payment Code and is fully committed, along with the Department’s Trading Partners, to paying all suppliers as quickly as possible.

Since May 2010 we have been aiming to pay 80% of invoices within 5 working days. We have achieved the following most recent in-month and cumulative 12 month performance:

Month Invoices paid Percentage within 5 day target
Dec 2013 344,098 94.23%
Cumulative 2,987,277 93.96%

Invoice processing

Each year, we process approximately 5 million invoices with a total value in excess of £20 billion.

Payment information

Our revenue and invoicing frequently asked questions (FAQs) have information to help suppliers submit invoices to DBS Finance correctly for prompt processing and payment. You will also find contact details; please thoroughly read the information provided before approaching the DBS Finance Contact Point.

Invoicing forms

Please see below for invoicing forms. Your contract with MOD defines the terms and conditions for payment, and advises which forms you should use for submitting your invoice.

If you need further clarification, you should check with the relevant MOD commercial branch detailed in your contract.

AG 158: Claim for extramural research

AG 158: Auto calculation version

AG 169: Claim for Progress Payments

Completion instructions for AG 173

AG 175: Summary sheet

AG 175: Auto calculation version

Completion instructions for AG 200

Completion instructions for AG 201

Completion instructions for AG 210

CX 319b: Methods of payment

FMSSC 018: Construction industry net

DBS Finance contract payment guide

This DBS Finance contract payment guide is for MOD contract payments only.

However, It does not apply to contracts ordered using the Purchase to Pay (P2P) arrangements. P2P e-invoicing procedures are notified to suppliers when they become ‘P2P enabled’.

The ‘Contract payment guide’ includes information on:

  • contract payment process
  • payment timescales
  • payment methods
  • guidance on using and obtaining invoicing forms

DBS contract payment guide

Invoice Summary Form (DAB 10)

This is a key document for the MOD supplier. Invoices submitted to DBS must be aggregated on this form, unless electronic payment processes apply.

It is essential that a Form DAB 10 is certified by the supplier when invoices are submitted to DBS.

The DAB 10 enables DBS to process claims for payment quickly and efficiently.

Confirmation of receipt in DBS Finance

If you require an email to acknowledge that DBS have received your invoices, please quote the appropriate email address on your DAB10 summary form in the box provided.

We will email your nominated address and advise the expected date of payment into your account, subject to checking.

Download DAB 10 using the links below.

DAB 10: Claim summary

DAB 10c: Claim summary

DAB 10: Claim summary (Auto-calc)

DAB 10: Claim summary (Foreign)

Nominate bank account details

Complete and return this form to DBS Finance to either nominate a bank account for BACS payments against new contracts, or to change bank account details for future payments against existing contracts.

Forms should only be completed once you have been allocated a Supplier Code from DBS Finance.

Please note that the MOD does not permit the benefit from any contract to be paid or assigned directly to a third party, including finance companies offering a factoring or similar collection service. The bank details provided must belong to the contract holder.

Please use the links below.

CX 723: Bank and email details

EP 1: Emergency payment

Emergency Payment Procedures

In the event of a major situation arising that directly affects the DBS, contingency plans to continue invoice payments will be introduced. Announcements will be placed in the following newspapers:

  • The Times
  • Financial Times
  • Daily Telegraph
  • Independent
  • Guardian
  • Daily Mirror
  • Scotsman

Suppliers should download a copy of the DBS Emergency Payments Form EP01 (or EP08 for Foreign Payments) from links below.

A press announcement will be issued at the end of the emergency informing everyone of the resumption of normal working practices.

Please click on the relevant link below.

EP 8: Emergency payment (Foreign)

Revenue processing

24-hour invoice collection telephone service

Payments can be made by debit/credit card on 0151 242 2399.

The automated service enables customers with an invoice number to make payments securely and quickly 24 hours a day, 7 days a week.

Worldwide revenue collection

DBS Finance send invoices and customer statements for goods or services that MOD have provided to UK and foreign companies, government departments, and private individuals.

MOD supply a wide variety of goods and services, including training, provision of facilities or disposals of MOD surplus equipment.

DBS Finance has succeeded in collecting approximately £2 billion of revenue each year.

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