The Ministry of Defence (MOD) is the largest procurement organisation in central government, managing some of the most complex and technologically advanced requirements in the world.
The defence sector relies heavily on technology and innovation to develop new solutions to meet the challenges it is facing; however, bringing a new product or service to the market can be daunting if you do not know how.
Learn more about how to get military contracts and the areas the military are investing in below.
How do you get a military contract?
The early bird catches the worm.
Early engagement with defence buyers can support your business when bidding for defence tenders.
Your organisation doesn’t need to wait until an opportunity is published to get in touch with a buyer. Early engagement with buyers is a crucial element in pursuing a successful procurement strategy in the defence sector for all procurement professionals. In the ‘Small and Medium-sized Enterprise Action Plan’ published by the MOD, early engagement is highlighted as a key action for organisations seeking to develop procurement strategies that work.
Early engagement is the key to winning a government contract and ti works two ways. For the supplier it improves understanding of all aspects of the tender between the parties involved. For the buyer, early engagement ensures the tender has the appropriate and relevant specifications in place, and it helps to ensure the right organisation takes on the contract. Similarly, early engagement helps potential suppliers to understand exactly what the buyer is looking for and so to identify which contract opportunities are worth bidding for.
Being proactive with early engagement tells buyers that you are informed, reliable and fully prepared for the government contract. More than this, it presents a prime opportunity to introduce yourself and the goods, works or services your organisation specialises in to defence buyers of all sizes. The valuable networking and relationship building opportunities are varied and defence industry specific.
By opening discussion, potential suppliers can gain an in-depth understanding of what the buyer is looking for in the tender bid, including the scope and wider issues such as environmental considerations and sustainability, increasingly important topics for defence buyers such as the MOD. This results in your organisation being in a far better position to write an accurate – and ultimately successful – tender response.
Areas of investment in the UK
Knowledge is power and if you want to win more defence tenders it is important that you get to know the military marketplace.
The MOD has a diverse range of requirements, including everything from military fighting vehicles to facilities management. The MOD buys a wide variety of goods, services and solutions, ranging from clothing and food to satellite communication systems; from construction of buildings to provision of staff; and from musical instruments to medical products and services.
We highlight some of the main areas of investment within the military marketplace below.
Defence Equipment and Support
Like all public sector organisations, the MOD must buy everything from pencils to uniforms to cleaning or catering services, all using the public procurement process. Which means almost any business can enter this market.
Spending on equipment and support accounts for roughly 40% of the Ministry of Defence budget. DE&S manages a vast range of complex projects to buy, support and supply vital equipment and services that the Royal Navy, British Army and Royal Air Force need to operate effectively.
During the course of 2018-2019, DE&S spent £9,766 million on acquiring and supporting equipment for the Armed Forces, as well as a further £770 million on inventory items to support that equipment. Small businesses have been behind some of the UK’s biggest defence projects. Ministry of Defence organisations like Defence Equipment and Support (DE&S) want to work with a ‘diverse supply base’ and have implemented principles to make it easy for suppliers do business with them.
Our Spend Analysis tool collates and publishes all UK defence sector and public sector spend data, which means our users can learn more about where organisation like the Defence Equipment and Support are spending immediately.
The military is keen to harness the power of innovation and technology as nations look to exploit every advantage on the battlefield and protecting borders and people.
Cyber warfare often makes the headlines and has seen some high-profile incidents over recent years, whether carried out by individuals or state-sponsored groups.
In December 2019, Chief of the Defence Staff General Sir Nick Carter delivered a lecture to the Royal United Services Institute (RUSI) in which he spoke of the growing importance of the cyber battlespace and how it will ultimately form a key component of the UK’s defence strategy alongside the Army, Navy and Air Force.
He said: “Our new UK Strategic Command is charged with driving the essential integration across the modernised force to achieve multi-domain effect. It will develop and generate the capabilities we need to operate successfully in this sub-threshold context – or grey zone, as some call it – including space, cyber, special operations and information operations.”
General Carter cited the growing reliance on technology and the digitalisation of society as an opportunity for enemies to attack the West’s freedoms and way of life. This includes the use of intellectual property theft, online espionage, misuse of information; state-sponsored cyber attacks – all supported by propaganda.
Protecting against a cyber security is, of course, not just a military issue but a real cause of concern for individuals and businesses across the globe.
A new report from the Department for Digital, Culture, Media, and Sport (DCMS) has revealed that the UK cyber security sector experienced a record year with more than £348 million of investment.
According to the study, the UK cyber security industry is worth £8.3 billion following a growth of 44% in the number of active firms since 2017. The sector has seen significant growth in annual revenue and employment, as well as considerable investment in early-stage companies.
The report also highlighted the growing diversification of the UK cyber sector with the growth of emerging security sub-sectors focusing on areas such as the Internet of Things, centralised systems that control and monitor infrastructure or facility-based processes, and post-quantum cryptography. The UK Cyber Security Sectoral Analysis 2020 named Darktrace as one of the most successful UK cyber security companies, which is one of the country’s 77 tech ‘unicorns’ – a company valued at over $1 billion.
Matt Warner, Digital Minister, said: “It’s great to see our cyber security sector going from strength to strength. It plays a vital role in protecting the country’s thriving digital economy and keeping people safe online.”
“We are committed to seeing it grow and are investing £1.9 billion over five years through our National Cyber Security Strategy to make sure we lead the way in cyber innovation, develop and attract the best talent.”
Another area of big spend in the defence sector is infrastructure. The Defence Infrastructure Organisation (DIO) plays a vital role in supporting the UK’s Armed Forces by building, maintaining and servicing the infrastructure needed to support defence and is responsible for enabling defence people to live, work, train and deploy at home and overseas.
With an annual spend of around £3 billion on construction and infrastructure service on behalf of its customers, DIO represents a significant opportunity for both current and potential suppliers.
DIO released its Procurement Plan in 2018 – marking the first time the organisation has outlined its priorities to existing and potential suppliers. The Plan explains how suppliers can navigate the procurement and approvals processes, and what DIO will be buying on behalf of its customers in the coming years.
This includes work to construct new buildings, such as housing and accommodation, and the refurbishment of current facilities as well as services such as catering, waste management and cleaning – which will create contract opportunities for suppliers.
Opportunities outlined in the Procurement Plan include the £4 billion Defence Estate Optimisation Programme, the Future Defence Infrastructure Services contracts – which will provide facilities management across the UK’s military bases – and the £1.3 billion Clyde Infrastructure Programme.
The plan also details several prominent works that demonstrate DIO’s key role in supporting defence throughout the UK. These include essential maintenance work worth £568 million to support nuclear infrastructure capability at HMNB Clyde, as well as a £58 million investment in a modern submarine training facility at the base.
Technology and innovation
Other areas of technology and innovation such as artificial intelligence, robotics, unmanned systems, automation will form key pillars in the defence sector.
In September 2019, the MOD published the Defence Technology Framework (DTF) and Defence Innovation Priorities (DIP) to define how defence will face the accelerating pace of technological change in the years to come.
The documents respond to the Modernising Defence Programme’s three central objectives: to mobilise to tackle today’s challenges; modernise to meet future threats; and transform to become an agile and innovative organisation.
This includes identifying technologies that can revolutionise defence as well as outlining a more sophisticated relationship with industry.
The Defence Technology Framework set out Defence’s assessment of the technology areas with the greatest potential to transform military capabilities.
The ‘seven families’ of technology – from Artificial Intelligence and advanced materials to energy storage and cutting-edge sensors – have the potential to revolutionise defence and shape collaboration with international partners and the UK’s world-class academic and industrial base.
Possible applications include deployed 3D printing, space tracking and communications, enhanced Intelligence, Surveillance, and Reconnaissance (ISR), cyber defence, and automated logistics.
Defence Innovation Priorities identifies where collaboration with the civil sector can help with defence’s most pressing problems. The DIP defines defence’s new relationship with industry, driving cultural change within both parties to ensure the benefits of private sector innovation are translated effectively into the public sphere.
The document outlines five priority areas for collaboration with the civil sector, including how the MOD can access the people with the right skills and experience and how the complexity of the battlefields of the future can be simulated in training.
The MOD has made a series of recent investments aimed at harnessing the potential of the UK’s world-leading scientific and industrial base.
The Transformation Fund, announced as part of the Modernising Defence Programme, will deploy £160m on fast-tracking new military capabilities onto the frontline.
Looking globally, we can expect significant growth in these areas as countries such as the United States, Russia, China, and Israel look to invest in state-of-the-art defence systems.
Often described as the next battlespace, space is set to play a key role as nations define their future defence strategies.
Last summer saw the MOD outline its ambitious space programme, which includes £30 million of funding for space projects. The Joint Forces Command was renamed Strategic Command to better reflect the contribution it makes to defence. This included the addition of developing capabilities in space and cyber domains – in addition to land, sea, and air.
The UK will become the first partner to join the US-led Operation Olympic Defender, a coalition formed to strengthen deterrence against hostile powers and reduce debris in orbit. The UK will send eight personnel to the Combined Space Operations Center (CSpOC) in California to join the US and international partners.
International military contracts
Global military spending is increasing and has reached its highest level since 1988.
The latest figures from the Stockholm International Peace Research Institute (SIPRI) have revealed that global defence spending in 2018 represented 2.1% of global gross domestic product (GDP) or $239 per person. This is a rise of 2.6% from the previous year’s figures and represents the second successive year of growth.
SIPRI figures encompass all government spending on current military forces and activities, including salaries and benefits, operational expenses, arms, and equipment purchases, military construction, research and development, and central administration, command, and support.
Currently the biggest military spenders include the United States, China, Saudi Arabia, India, and France, which together in 2018 accounted for 60% of global military spending.
According to SIPRI, the USA and China’s spending drove the increase, with these two nations responsible for half of the world’s defence spending.
The United States remains the biggest spender in the defence marketplace, with investment rising by 4.6%, reaching a total of $649 billion for 2018 – close to the entire expenditure of the next eight biggest spending countries combined.
China is the second biggest investor in defence and increased its spending by 5%, reaching $250 billion in 2018. This marks the 24th consecutive year of growth in Chinese defence spending. The scale of China’s investment in defence is illustrated by its spending in 2018 accounting for 14% of all global defence investment and being almost ten times as much as its spend in 1994.
SIPRI’s report cites rising tensions between countries in Asia as well as between China and the USA as major drivers for the continuing growth of defence spending in the region. Defence spending in Asia has grown every year since 1988. Investing $507 billion, the region accounted for 28% of the global total in 2018, compared with just 9% thirty years ago.
2018 saw India increase its defence budget by 3.1%, taking total spending for the year to $66.5 billion. Pakistan also boosted its defence spend by 11% in 2018 – the same growth as 2017 – to hit the $11.4 billion mark. South Korea invested $43.1 billion on defence in 2018 thanks to an increase of 5.1%, reaching its highest total spend since 2005.
Using business intelligence to find military contracts
Increasing defence expenditure across the globe can only mean greater prospects for those suppliers looking to expand their business into international markets and win more defence contracts.
These opportunities go much further than the tanks, submarines, ships, and aircraft that make up the typical defence budget. Procurement activity covers a very wide range of requirements such as facilities management, goods and services, catering, IT, logistics, training, and fleet management.
The additional focus on cyber, technology and space means the defence industry touches so many different sectors.
It is no secret that early engagement gives businesses the best possible advantage, and it is here where Defence Contracts International can help you get ahead of the curve.
How do I find government contracts?
DCI hosts the largest defence tenders database in Europe. DCI’s defence tenders are not only available from the MOD in the UK but also span the continents of the globe.
DCI’s range of features can help you engage earlier, find government contracts, be more competitive and sell more effectively to support your business growth at every level, whether you are an SME relatively new to working with the defence sector or a multinational company looking for deeper market insight.
Find more defence tenders – book a demo with a member of our expert defence procurement team.