Introduction to the Strategic Defence Review 2025
The Strategic Defence Review 2025 (SDR2025) marks one of the most significant overhauls of the UK’s defence policy and procurement system in a generation. Published in June 2025 and led by Lord Robertson, the former Defence Secretary and NATO Secretary General, the review set out 62 recommendations — all accepted by the government — to reshape how the Ministry of Defence (MoD) equips, supports, and sustains the UK’s Armed Forces.
At its core, the SDR’s vision is to make Britain “secure at home and strong abroad”, preparing the UK for a more volatile world defined by peer-level threats, rapid technological change, and geopolitical instability. The review also sets out the future of UK military capabilities, procurement, and strategic planning, emphasizing upcoming developments and modernization. For suppliers across the defence industry, this is not just a policy document — it’s a roadmap that will redefine how contracts are structured, awarded, and delivered.
Why the Strategic Defence Review Matters for UK Defence
The SDR2025 represents the UK’s first major defence review in over 25 years. Previous defence reviews have played a significant role in shaping the nation’s military strategy and national security priorities. This latest review was prompted by a clear imperative: to transform a traditionally slow and siloed procurement system into one capable of “delivering at wartime pace.” National security remains a key driver for the review, ensuring the UK is prepared for evolving threats.
The Labour government, during the current parliament, has made a commitment to raising the defence budget to 2.5% of GDP by 2027, reinforcing the scale of ambition — alongside a strategic pivot to a NATO-first approach, increased industrial resilience and a stronger domestic supply base. The review’s priorities are shaped by the importance of Euro-Atlantic security, close cooperation with NATO allies, and the UK’s leading role in Europe’s security architecture.
For suppliers, the implications are profound. The review outlines a clear intent to make procurement faster, more transparent, and more inclusive — opening new doors for small and mid-sized enterprises (SMEs) and technology-led innovators.
Key Themes in Defence Reform 2025
The SDR sets out five “ambitions” for transformation — several of which directly reshape procurement. Among the most significant are agility, collaboration, and transparency. The review outlines a comprehensive plan for transformation and modernisation, including specific plans for procurement strategies and future capability development. However, the implementation of these reforms faces significant challenges, such as funding constraints, warfighting readiness, and adapting to evolving strategic threats.
Agile Procurement in an Uncertain World
Traditional MoD acquisition cycles often spanned years. Under SDR2025, that timeline is being compressed dramatically. The new segmented procurement model aims for:
- Major programmes contracted within two years,
- Spiral upgrades within one year, and
- Rapid exploitation (emerging tech) in as little as three months.
Alongside rapid technology adoption, the MoD is investing in a digital targeting web to connect sensors, decision-makers and effectors across domains, enhancing real-time battlefield awareness and operational effectiveness.
This shift reflects lessons from recent conflicts — where the ability to field new technologies quickly can define battlefield advantage. These conflicts have also highlighted the importance of integrated battlefield decisions, enabled by advanced data-driven and technology-enabled strategies. The MoD is using new flexibilities under the Procurement Act 2023, including the Competitive Flexibility Procedure, to enable faster, iterative contracting.
Suppliers able to deliver incrementally — rather than through long, fixed development cycles — will be well positioned to achieve the MoD’s modernisation and readiness goals.
Increased Focus on Collaboration with Industry
A central message of SDR2025 is that industry is now the UK’s “second line of defence.” The MoD is committing to a “One Defence” approach — breaking down barriers between the services, the UK government, and suppliers. As part of this strategy, a new partnership between the MoD and industry has been established to enhance collaboration and strengthen the UK’s security posture. The review also outlines key government aims, such as improving defence capabilities, increasing international cooperation, and supporting NATO commitments.
This includes:
- Early industry engagement at the requirements definition stage.
- Creation of a new National Armaments Director (NAD) to align procurement, innovation, and exports.
- Launch of a Defence Exports Office to boost international collaboration.
- Inclusion of SME representatives within the Defence Industrial Joint Council.
For suppliers, this means earlier visibility of needs, more joint solution development, and better alignment between MoD demand and industry capability.
Environmental & Ethical Procurement Considerations
Sustainability and ethics are now embedded in the procurement framework. SDR2025 aligns the MoD with the government’s broader ESG agenda:
- Net-zero across the defence estate by 2040 and across equipment by 2050.
- Minimum 10% weighting for social value in all major defence tenders — meaning community impact, workforce diversity, and veteran employment directly affect scoring.
- Stricter adherence to ethical sourcing, anti-corruption, and modern slavery compliance.
For suppliers, ESG is no longer a “nice-to-have” — it’s a bid-winning differentiator. Demonstrating strong sustainability credentials and transparent governance will increasingly determine contract success.
How the Strategic Defence Review Will Impact Defence Procurement
SDR2025’s procurement reforms are both structural and cultural. At its heart is a commitment to speed, accountability, and innovation. Reviews, including ongoing and historical government assessments, have played a significant role in shaping these procurement reforms and informing best practices.
The MoD is simplifying decision chains, appointing the National Armaments Director as a single point of authority, and standing up a new Military Strategic Headquarters to centralise investment decisions. Parliamentary scrutiny is essential to ensure transparency and accountability, with parliament playing a key role in overseeing the implementation of the review’s recommendations and maintaining effective oversight.
This top-to-bottom reform is designed to make defence procurement more agile — delivering capabilities in months, not years — while ensuring that UK industry remains a strategic partner in national resilience.
💼 Start identifying new procurement pathways — book a strategy session with DCI’s defence consultants.)
Procurement Acquisition and Management: New Approaches
SDR2025 introduces a more integrated lifecycle approach to acquisition and management. Rather than separating design, procurement, and sustainment, programmes will now be managed end-to-end — from concept to through-life support. As part of this broader reform, modernisation of military accommodation is also prioritised, with a focus on upgrading barracks and living facilities to support workforce retention and modern infrastructure needs.
Key features include:
- Spiral development as standard: deliver a baseline capability quickly, then iterate. This approach is supported by new investment in military capabilities, ensuring resources are allocated to upgrade and replace outdated assets.
- Outcome-based contracting: focusing on performance goals, not rigid specifications.
- Open architecture design: allowing rapid technology insertion over time.
This model rewards innovation, risk-sharing, and flexibility. For suppliers, this means contracts that prioritise value, adaptability, and long-term readiness — and a procurement culture more receptive to creative solutions. The implementation of these procurement reforms will be shaped by prevailing economic and fiscal conditions, which will determine the scale and pace of defence spending and modernisation efforts.
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MOD Defence Contracts: What Suppliers Need to Know
Under SDR2025, the way the MoD evaluates bids is changing. Defence and security considerations will play a central role in contract evaluation, ensuring that procurement decisions align with national strategic priorities. Procurement will now favour the most advantageous tender — based on quality, innovation, resilience and social value, rather than lowest cost alone. This approach is designed to better support the UK armed forces and enhance warfighting readiness by ensuring that acquired capabilities meet the demands of modern operational preparedness.
Defence Contract Companies & Tiered Supply Chain Dynamics
The MoD wants a more diverse, resilient supply base. This means:
- Greater SME participation, supported by a new Office of Defence Small Business Growth (launching 2026).
- Prime contractors are required to advertise subcontract opportunities on the Defence Sourcing Portal (DSP).
- A push for domestic manufacturing and dual-use innovation, including the expansion of munitions factories, to strengthen supply chain security.
For SMEs, this opens the door to new collaboration opportunities — particularly in priority areas like AI, green defence, digital resilience and long-range weapons. The British army, facing modernisation and workforce challenges, will benefit from these innovations and increased domestic production capacity.
Defence Procurement Procedure & Compliance in 2025
The Procurement Act 2023 is modernising the rules that govern all UK public procurement. For defence suppliers, several key updates apply:
- Competitive Flexible Procedure replaces older EU-era processes – allowing dialogue and negotiation during tendering.
- Contracts awarded based on Most Advantageous Tender (MAT), prioritising innovation and social value.
- Enhanced transparency, with contract pipelines and award data published on the DSP.
The defence secretary plays a crucial role in overseeing procurement reforms, ensuring that new policies align with strategic defence objectives.
Procurement priorities increasingly focus on advanced capabilities, with missile defence systems becoming essential for strengthening deterrence and integrated air and missile defence.
Suppliers must also ensure compliance with baseline requirements such as:
- Cyber Essentials Plus certification for cybersecurity.
- ISO 9001 for quality assurance.
- Ethical governance and export control compliance.
Changing fiscal conditions can directly impact compliance requirements and procurement decisions, as funding and priorities may shift in response to the broader economic environment.
Empowering Suppliers Through the Strategic Defence Review 2025 with DCI Contracts
The Strategic Defence Review 2025 marks a generational shift in UK defence procurement — faster, fairer, and more open to innovation than ever before. The Prime Minister has announced this review as a cornerstone of the government’s commitment to strengthening national security. The UK’s ongoing investment in nuclear weapons and its commitment to maintaining a credible nuclear deterrent remain central to its defence strategy. But adaptation is key.
Whether you’re an SME entering the market or a prime adjusting to new compliance and contracting expectations, having the right intelligence is essential. The UK continues to play a leading role in NATO’s nuclear mission, ensuring its nuclear deterrent contributes to collective security and deters major threats.
DCI Contracts helps suppliers anticipate and respond to these changes with:
- Early contract alerts through the Defence Sourcing Portal and public frameworks.
- Procurement forecasting and spend analysis to identify emerging opportunities.
- Competitor insights and live tender tracking to sharpen your bid strategy.
Looking ahead, the next decade and the next parliament will be critical for implementing the review’s recommendations and delivering on future defence priorities. Preparing for war and supporting Euro-Atlantic security will require innovation, resilience, and strong supplier partnerships.
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Catch up on our latest DCI webinar, ‘From Strategy to Opportunity: Navigating the Changing Defence Landscape Join Samira Braund (ADS) and Grahame Steed (BIP Solutions) for our post-DPRTE Summit webinar to understand what this means for suppliers, where SMEs can slot into defence supply chains, and how to position now for upcoming MOD opportunities using DCI insight. Watch On-Demand Today
