The idea of contracting to the UK Ministry of Defence (MOD) can be rather intimidating, especially for small businesses. The country’s security is at stake, after all.
The truth is that there are many opportunities for SMEs and new suppliers to crack the defence procurement market.
We’re going to look at how suppliers of all sizes can break into defence contracting, learning more about the MOD’s procurement processes on the way.
Know the UK MOD Market
The first thing in any procurement exercise is to understand your target audience. This includes industry regulations, such as the Procurement Act 2023, and its requirements for transparency, fairness, and value.
Then, there are the routes to procurement, including framework agreements, dynamic purchasing systems (DPS), and competitive tenders. Each route has its advantages and disadvantages. You must use those that align with the tenders in question.
There’s a new kid on the block: dynamic markets.
Dynamic markets are like DPS, as suppliers can join at any time and buyers can hold mini-competitions to choose the best candidate from a pool of pre-approved suppliers.
Basically, dynamic markets simplify MOD procurement processes for SMEs and suppliers new to the procurement market.
Where to Find Defence Contracts
Several organisations cater to specific products, services, or works.
- Defence Equipment & Support (DE&S) publishes military equipment and support services contracts.
- Defence Digital (DD) publishes IT, cyber security, and digital transformation contracts.
- Defence Infrastructure Organisation (DIO) publishes estate and infrastructure contracts.
- Defence Science & Technology Laboratory publishes tenders for innovation and scientific research exercises.
- Team Leidos publishes logistics and supply chain management contracts for MOD materials.
- The MOD’s Acquisition Pipeline is a list of contracts that might – not will – be published. Still, it’s handy for suppliers to identify and plan for tender opportunities.
MOD Security Clearance and Compliance Requirements
Defence contracts have stricter requirements than most other sectors. Although, they share some basic requirements:
- Cyber Essentials/Cyber Essentials Plus. The minimum data safety accreditations the government will accept.
- ISO 9001 (Quality Management). Meets international standards for quality goods, services, and operations.
- ISO 27001 (Information Security). Meets international standards.
(There are many more ISO certifications relevant to defence, including occupational health and safety.)
Security clearance
Security clearance requirements depend on the type of contract and the sensitivity of the information available.
Requirements include:
- Baseline Personnel Security Standard (BPSS): Mandatory to access government assets.
- Counter-Terrorist Check (CTC): Mandatory to gain access to material that terrorist groups target.
- Security Check (SC): Mandatory to gain free access to secret government assets.
- Developed Vetting (DV): The highest level of security clearance. It’s only available to those who have unrestricted access to top-secret files or jobs that pose an inherent risk to national security.
Know who on your staff needs clearance. Sometimes, everyone must have a certain level of clearance, and other times, it’s only the heads of procurement.
However, it doesn’t hurt to have basic security clearance regardless of the products and services you supply to defence public sector bodies.
Register on Defence Procurement Platforms
There are eTendering portals, like Delta eSourcing and the government’s Contracts Finder, which some UK defence government bodies use to publish certain contracts – not the complex or the data/material sensitive ones. These are published on platforms specifically for defence exercises.
- Defence Contracts Online (DCO): The primary procurement platform for contracts over £10,000. It’s free and includes subcontracting tender opportunities.
- Defence Sourcing Portal (DSP): Access is free and includes subcontracting tenders. It also posts industry announcements, including supplier engagement events and webinars.
- Defence and Security Accelerator (DASA): Primarily for security-related tenders. It also fosters innovation by hosting regular competitions for suppliers to showcase their ideas.
- Defence Contracts International (DCI): Publishes the most defence tender notices in Europe. Services also include competitor analysis and Spend Analysis Pro, a unique solution for insight into buyer/supplier relationships.
- Defence Science & Technology Laboratory (Dstl): Hosts R-Cloud, a DPS specifically for science and technology projects.
Helping SMEs and New Suppliers Find UK MOD Contract Opportunities
Subcontracting is one of the quickest and most effective ways to break into defence procurement. That doesn’t mean it’s easy-peasy. You must still meet defence procurement criteria, but the evaluation process isn’t quite as strict.
The first thing you need to do is find Prime contractors. Prime contractors are large enterprises that have established themselves in the public defence procurement market. You’re looking for Primes with a gap that fits your business offerings.
You must be qualified to bid on subcontracting tenders. This includes the usual defence procurement requirements, like licences, certifications, trade association membership, and security clearances.
You also need to fit the Prime’s ethos. For example:
What are your priorities? Customer support, sustainability, efficiency? Do they align with the Prime’s priorities?
Can you prove your commitment to these priorities? Do you have case studies, testimonials, social value credentials, financial reports, or quality certifications?
Here are a few options that can provide guidance and support
- Ministry of Defence SME Helpdesk
- Industry events, including:
Encouraging SMEs in Defence Procurement
The UK government is committed to increasing the number of SMEs in public procurement, and the Ministry of Defence is doing its part. MOD contract initiatives include:
- SME Action Plan: To increase spending, financial support, and engagement with SMEs.
- Defence Technology Exploitation Programme (DTEO): To fund SME defence projects.
- Ideas Marketplace: Fosters connections between SMEs and stakeholders in the defence industry.
- Defence Innovation Fund: Committed to providing £800 million over the next decade to support collaboration between SME suppliers and other stakeholders.
- The Future Capability (FCG): Also known as Future Capability Innovation, works with MOD suppliers to develop new technologies, like robotics autonomous systems and advanced AI in manufacturing processes.
How to Respond to Defence Invitations to Tender (ITTs)
ITT responses are pretty standard across the public sector, but each has unique requirements. Here are some tips for defence suppliers to optimise ITT responses.
Keep it simple. If you can’t keep it simple, make it look simple, or at least easier to understand with diagrams, images, and even infographics. It’s a great way to sum up technical details without confusing whoever is evaluating your bid.
Don’t stint on the details in case studies. Not every detail, obviously, but the stuff that counts, like the scope of the project and the solution that delivered staggering value. Be honest about the challenges and expand on how you overcame them. Remember to emphasise the social value aspect of the contract.
Having said that, don’t waffle. Keep paragraphs short and sentences punchy. The person evaluating your bid probably isn’t an expert in the subject matter, so long-winded sentences with complicated jargon will frustrate rather than impress.
Stick to the brief. If the tender doesn’t call for information, don’t cram it in because it makes you look clever. If the tender documents don’t ask for it, the Ministry of Defence doesn’t want it.
Personalise your bid by introducing your team. This humanises your bid. You don’t need to add everyone in your company, just the key staff delivering the contract.
Provide the supporting documentation required, especially docs related to regulatory compliance, certifications, quality standards, and security clearance.
Build Long-Term Relationships with Defence Stakeholders
It can take a while to enter the inner circle of trust, but once you’re in, you want to do everything possible to stay there. That includes building relationships with industry stakeholders.
Industry events are great for introducing your business to key MOD staff. This is where you lay the foundation for long-term relationships, so make your first impression a good one. Defence suppliers learn about challenges, pain points, and problems that need innovative solutions.
This information is crucial to your tender strategy so you can develop goods, services, and business operations to address specific issues. Cultivate a reputation for upsizing value. There’s very little government buyers like more than added value that doesn’t cost a penny.
Keep channels of communication open and check in every now and then to remind buyers that you’re ready, willing, and able. But don’t be a stalker.
Make friends with key suppliers. You want to win contracts, but don’t burn bridges to do so. Just in case you need to collaborate to increase your chances of winning tenders. You might even need to form consortiums with other companies in the defence supply chain to meet large, complex contract requirements. You can do this better with friends than enemies.
Supply2Gov’s No-Strings-Attached Procurement Platform
Supply2Gov (S2G) is a BiP Solutions partner, with the largest database of UK public sector contract opportunities in the UK and Republic of Ireland. Our Pay-as-You-Grow pricing ensures you pay for your current needs, starting with our free local alerts package and gradually extending your reach as your business grows.
We also provide a range of support services, including Cyber Essentials and Cyber Essentials Plus certification.
Register now and tenders will soon be coming your way.