An interview with Les Mosco, former Commercial Director of the MOD and Keynote Chairman of the upcoming DPRTE exhibition in Cardiff.
Can you give our readers a little background into yourself and your current role?
I have a long history in procurement, having been a supply chain director for Network Rail, Amerada Hess, NatWest, the Scottish Office and British Coal amongst others. From 2007-2014, I was Commercial Director at the MOD, and was responsible for a multi-billion pound annual procurement budget.
Currently, I own Commercial Strategies Limited, and am managing a portfolio career in which I am a non-executive director, charity trustee and senior advisor to various organisations. I also currently serve as a Strategic Advisor to BiP Solutions, the company behind the Defence, Procurement, Research, Technology and Exportability exhibition (DPRTE) which is coming to Cardiff on March 28th.
Looking back at your career, what have been your proudest achievements, and are there things you would have done differently?
It’s been extremely rewarding to work for a range of complex public and private sector organisations. Heading up the MOD’s contracting and supply chain was undoubtedly very challenging because of its scale and complexity. I hope I brought some fresh external thinking to the role and the organisation more widely. Looking back, it is also highly fulfilling to have founded Commercial Strategies over a decade ago, and to continue having interesting and challenging assignments. If I could turn the clock back, I’d be less of a workaholic and spend more time with my family.
Why should businesses (particularly Welsh ones) pursue opportunities in the defence sector?
Last year it was announced that the MOD would seek to target 25% of all procurement spending – direct and indirect – through SMEs by 2020. In a £19 billion operation, that is no small commitment, and DPRTE in particular gives Welsh SMEs an unprecedented chance to tap into these expansive defence supply chains.
The size of the sector is also considerable in Wales. According Welsh Government figures, when combined, the defence and aerospace sectors contribute more than £5 billion to the Welsh economy. And there are several leading defence manufacturers with major operations based in Wales – including Airbus Group, BAE Systems, Raytheon, Babcock and General Dynamics UK.
Crucially, you need not be a specialist in defence to capitalise on these supply chains and investment. The MOD buys virtually every type of goods and services, including electronics, textiles, cyber security, medical, construction and many more.
Lastly, because of the UK government’s commitment to NATO’s target of spending 2% of GDP on defence, it is likely that it will be one of the most stable major sectors in the country’s economy over the foreseeable future.
How can these businesses identify and capitalise upon such opportunities in the defence sector?
The MOD is complex and difficult to understand. Making the initial breakthrough can be confusing and time consuming, so attending inclusive events such as DPRTE where businesses can talk to suppliers and experts about the state of the industry is vital. There has been a tendency for bigger defence exhibitions and shows such as Farnborough to be dominated by the ‘big boys’, leading some SMEs to feel that they can’t get a seat at the table.
When I was in MOD procurement it was a priority for us to challenge these perceptions, and make sure that companies of all sizes understood the services we put out contracts for. With the new procurement targets on SMEs it is clear this remains a priority, and by attending open exhibitions like DPRTE, organisations can take an important first step towards getting on the ladder.
What kinds of businesses/services do the MOD employ within their supply chains?
I was once told that there isn’t anything that the MOD doesn’t buy, and I never found an example to disprove the statement. So virtually everything is somewhere in the MOD supply chain. Of course, much is procured through the large defence primes – often monopoly suppliers – but huge volumes are procured by MOD direct from other suppliers, and the primes themselves are heavily dependent on subcontractors in their supply chains.
Suppliers in everything from clothing to construction should therefore take the time to investigate if there are opportunities for them in the sector. The ingenuity and efficiency of less established organisations can be one the major drivers of improvement in established defence supply chains.
Has the focus of this changed since you began running MOD procurement? Are there any types of business that are particularly in demand for the MOD?
Inevitably, much emphasis is still placed on the major platforms and defence primes. As you would expect in the current landscape though, there’s much more focus on IT, technology and cyber security – both in terms of hardware and software. Digitisation is a hot-button issue across defence, just as it is in almost every industry and sector.
More broadly, SMEs are the type of businesses in demand due specifically to the new procurement processes, and thanks to the gradual organisational shift in thinking of how SMEs can bring innovation, speed and other benefits.
How well positioned do you think Welsh businesses are to capitalise on MOD supply chains?
Welsh businesses are very well positioned. The UK government will be keen, as we leave the EU, for UK suppliers to take a more prominent role in public sector spending, and also to export to firm up trading relationships.
As mentioned earlier, there are also many established examples of defence and aerospace operations within Wales, and so provided they can meet quality requirements for MOD goods and services, there is no reason why Welsh businesses shouldn’t be completely confident that they can compete for defence business.
What do you think Wales’ strengths and weaknesses are as a place to do business?
Geographically, Wales is well placed to be part of UK defence supply chains. Major pillars of business including culture, language, common taxation and company law all make Wales ideally suited. The MOD will also want a proportionate supply of goods and services from Wales as a part of the UK.
Some transport links in Wales are challenging and lengthy, but this pales in comparison to the logistical challenges thrown up by dealing with many international suppliers. On the plus side, Wales is an integral part of the M4 corridor, linking it to London and the Home Counties where a lot of activity takes place, including DE&S, the MOD’s major procurement centre, at the M4/M5 junction. When trying to break into UK supply chains in any sector, Welsh businesses need to make sure they clearly hammer this point home.
Do you have any predictions in regards to the impact of Brexit on your sector?
Nothing will change in procurement immediately after Article 50 is triggered, as we’ll have to stick to the existing EU procurement directives until we actually leave. At that point, it’s possible that as part of the overall renegotiation deal, there will be continued mutual recognition of EU and UK suppliers’ right to bid into each other’s markets on equal terms as now. But even if that’s not the case, I’d expect a version of the EU procurement rules to be adopted by the UK as a starting point, as in many ways they simply codify fair and equitable competition procedures. Over time the UK will probably evolve its processes, and do away with some of the more bureaucratic aspects of the EU procurement rules, which can only be a good thing for UK businesses.
Specifically for businesses, Britain has always had a culture of consulting industry on new legislation. SMEs should therefore have a real chance to influence any new laws post-Brexit, and I don’t see why this wouldn’t be the case in procurement.
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