12 Nov 2013

Defence supply chain boost for UK SMEs

Summary: The Minister for Defence Equipment, Support and Technology Philip Dunne recently chaired a forum at the Centre for Defence Enterprise (CDE) which sought to support small and medium-sized enterprises to win more business in the defence sector.

Enter the defence supply chain

The CDE aims to remove barriers for small and medium-sized enterprises to enter the defence supply chain, working with a range of science and technology providers to provide an entry point into MOD contracting for those new to the industry.

The recent forum gave the MOD direct communication with SMEs, allowing them to share experiences, best practice and help inform them about new MOD and government policies.

The CDE has received more than 4700 research proposals, with around 750 selected for funding, resulting in a total contract value of £44m. Almost half of all CDE contracts go to SMEs.

Mr Dunne said: “CDE shows how MOD works closely with companies, including SMEs, to provide innovative equipment and support for our Armed Forces.

“CDE also plays a crucial role in ensuring SMEs have direct access to MOD contracts. We saw first-hand the results of CDE’s work and the valuable impact this can have.”

In August 2013, the Cabinet Office published the Making Government business more accessible to SMEs: Two years on report, which revealed the breakdown of spend with SMEs by government department.

Opportunity for defence contractors

The report showed that the MOD accounts for 45% of central government spend. This represents a massive opportunity for firms to win more business with government. Currently, over £1bn is spent by the MOD directly with SMEs in the UK, as well as almost £2bn in indirect spend via sub-contracting opportunities in the supply chain.

This new effort to get more SMEs winning work with the defence sector is part of a wider plan to improve conditions for small firms and increase competitiveness.

A cross-government strategy on small business support will be published in December. The strategy will be aimed at small businesses with the ambition to grow and will set out a range of measures to help them achieve their potential, including improving access to finance and offering help to export and innovate.