The Role Of Government Procurement Policies And Regulations In Shaping The UK Defence Industry

As of 2020, the United Kingdom government spent around £300 billion on public procurement contracts, accounting for roughly a third of all public expenditure annually at the time. 

Through the introduction of procurement policies, the government can regulate procurement contracts, ensuring taxpayers receive value for money, and providing equal opportunities to all private service suppliers participating in the procurement process. 

With the necessary regulation, the government will ensure that all governing authorities or contract-awarding entities spend public funds on defence contracts that will help improve public services, empower communities, and help build regional and national pride across the country. 

Public Procurement in the UK Defence Sector 

The UK defence sector has undergone tremendous changes in recent decades, and even more so since the escalating tensions between Ukraine and Russia. Mounting pressure due to the outbreak of war on European soil has meant that the Ministry of Defence (MOD), along with the wider defence sector has looked to improve, and subsequently rebuild their procurement regime. 

Traditionally, defence procurement regimes were considered a lethargic process that required months of planning and deliberation. However, with public money, and safety at risk, the defence sector has introduced new strategies to improve the defence procurement regime.

Value on time 

The importance of shortening the process, from when a contract is made available to the public, and assigned a supplier, to contract commencement needs to be improved to create a more streamlined, and efficient supply chain. 

Sense of urgency 

Promoting systems that work efficiently can help improve a sense of urgency among suppliers, and public contract awarding entities. 

Skills improvement 

Emphasise skills improvement, ensuring all British defence sector employees, including military personnel are informed, and trained on new technology or equipment to ensure they harness the necessary skills. 

Professional procurement stream

Building a professional procurement stream that would allow the military access to the necessary tools, resources, materials and services as required, without having to first overcome obstacles and potential barriers, including a lack of funding and skilled professionals. 

Improved MOD 

A report provided to the House of Commons in July 2023, highlighted the changes needed within the MOD to create a more dynamic, and innovative defence department, that ensures the safety of the country, promotes technological development, and promotes value for money in all procurement contracts. 

Promote reforms 

Additionally, the same July 2023 report highlighted the importance of promoting reforms across the defence sector, to ensure the continued development and forward-looking growth of the MOD through the necessary regulation. 

By rebuilding the defence procurement regime, and creating a more streamlined strategy, the MOD, and the branches of government can ensure the safety, protection and forward-looking growth of British innovation, and critical systems that promotes transparency, management, and competition.

Regulatory impact on defence procurement practises 

Procurement regulation and any new changes drive meaningful impact for central government departments, and most importantly in the defence sector. By having the necessary regulation, and government oversight, improved procurement systems could mean a more efficient, and value-for-money-driven defence sector. 

Promotes autonomy

The regulation allows defence contracting authorities increased autonomy in terms of the defence suppliers and public procurement. This would ensure that only specialised suppliers, with knowledgeable skills, quality materials, and service history receive priority for MOD contracts.

Creates a platform for negotiation 

Additionally, the procurement regulations process ensures that public entities can negotiate the necessary terms with private service suppliers, allowing them to leverage maximum benefits. 

Forms long-term relationships 

With the necessary oversight, the government and defence sector can securely establish long-term relationships with private sector suppliers, to create a simpler, more efficient, and convenient supply chain. 

Regulatory impact on technological innovation in defence 

Defence procurement policies allow the MOD to acquire advanced equipment, tools and materials from highly sophisticated private-sector suppliers. This allows them and the wider UK defence sector to increase their preparedness, mitigate any risks, and remain a key influence on the world stage. 

Improved Dynamic Purchasing System

Defence industry R&D investments (research and development) allow for an improved Dynamic Purchasing Systems (DPS) that continuously promotes budget allocation to services and equipment that improves technological innovation across the defence sector. 

Establishes standards of development 

Ethical standards in defence procurement, through regulatory intervention, help to establish industry-wide standards and further ensure that the defence sector has access to high-quality and sophisticated resources and services. 

Promotes skills building 

Government defence contracts allow the MOD to acquire services that help to meet their need but also promotes the ability to educate personnel and equip them with the necessary skills to effectively utilise advanced technology and equipment. 

Defence technology transfers 

Regulation can help set criteria that create a supply chain whereby defence technology can remain accessible to all industry authorities, and personnel. Additionally, this would further allow technology to be transferable between departments, and any MOD branch, creating a more efficient internal supply chain. 

Defence industry compliance 

Security public contracts regulations help with oversight, ensuring that the defence industry remains compliant with broader strategic planning, and fulfils the duties and needs of national defence. 

Regulatory impact on strategic partnership in defence 

Regulation allows the creation of a dynamic procurement regime that sees the participation of small and medium-sized enterprises (SMEs). Further, this creates new business opportunities for SMEs, allowing them a fair chance to be awarded government contracts and help build towards a national defence strategy. 

Defence industry competitiveness 

Regulatory oversight promotes a competitive procurement system, which ensures that all available contracts are awarded to private service providers that are equipped with the necessary experience and knowledge. 

Defence sector collaboration 

Procurement allows for partnership and long-term collaboration between the public and private industry. This ensures that an established supply chain can be created, that allows the defence sector untapped access to advanced equipment, technology and insights. 

Defence supply chain diversity 

Instead of awarding multiple contracts to one entity, new regulations ensure that available contracts are awarded across a diverse landscape, helping to further create a more diverse supply chain that gives the defence sector continuous access to the necessary resources and services that fulfil their needs. 

Defence sector export control 

Regulation changes have meant that the advanced equipment and new technology developed in the UK can remain accessible to the defence sector and central government departments. Additionally, this would mean that stringent requirements allow private sellers to partner with trusted, and reliable international buyers that remain within the best interest of the United Kingdom. 

Regulation creates fair and fast procurement 

With the right amount of regulation and oversight, the defence sector can create a procurement regime that is fair and fast, allowing them unlimited access to advanced technology, equipment and services. 

Equally, this creates new opportunities for the private industry, ensuring that they can largely benefit from the defence sector and their strategic procurement planning. Furthermore, regulatory oversight helps to create transparency throughout the entire system, which further ensures value for money and the procurement of only necessary resources. 

Creating a procurement regime, without regard to regulation poses immense challenges for the defence sector and the Ministry of Defence. By introducing an adequate amount of leverage, the defence sector can have increased autonomy in terms of procurement, and further promote their national defence strategy that ensures the protection and safety of a more competitive global Britain. 


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