23 Jun 2022

What is Being Bought in The Defence Marketplace in 2022

DCI has recently released its first GovSpend report examining the spending trends from the first quarter of 2022.

GovSpend is the only report in the UK that provides in-depth analysis of defence spend and trends together with insights into the defence marketplace.

What does the DCI GovSpend report say about the defence sector?

You’d be forgiven for thinking that defence sector spend would have dovetailed due to the current economic climate.

That said, despite the challenges arising from the war in Ukraine, supply chain demands and rising utility and fuel prices, the report revealed that the defence sector was still a hive of activity with a good spread of activity across each of its sectors and a healthy spread of contract values. But what have defence customers been buying?

Type of contracts shows implementation of the Integrated Review

Published just over a year ago, the Integrated Review of Security, Defence, Development and Foreign Policy represents the most comprehensive foreign policy and national security review published by any British Government for over 30 years.

Encompassing national security, foreign policy and the UK’s approach to the global economy, the report strategises the Government’s vision for the UK in 2030 and how its international policy will be used to help achieve it.

Science, technology, and innovation boom

Across the public sector, huge sums are being invested in science and technology and defence is central to this. The Integrated Review made clear that the MOD has identified science, technology, and innovation as a major focus of its ten-year strategy.

This includes bolstering the UK’s cyber capabilities and striving to become a global science power, using research and development investments to grow industrial capability and create cutting-edge equipment.

Looking at the range of MOD contract notices in Q1 of 2022 there are clear signs of the strategy coming to life.

Top of the list comes unmanned underwater vehicles (8), with second place going to education and training services.

These are followed by research and development services (6), telescopic sights (5), electric vehicles (4), electronic warfare systems and countermeasures (4), military research and technology (4) and non-piloted aircraft (4).

For reference, the top CPV in Q1 of 2021 was repair and maintenance with 13 notices followed closely by education and services (12), data security software and development services (5) fuels, and software package and information systems (5).

Demand for more traditional defence contracts remains

However, more traditional contract notices – construction work (3), project management consultancy (3) – and a swathe of similar notices such as land management services, road-repair works, protective and safety clothing highlight there is still a clear demand for thistype of work.

Need for education and training services continues to be strong

Placing highly on figures for both Q1 of 2021 and 2022 is education and training services.

The focus on science and technology – including cyber – has led to something of a skills shortage in the technology and cyber sectors.

Left unchecked, these risk slowing the progress of this aspect of the Integrated Review.

This is likely to mean that education and training services will be a fixture in the months ahead as the sector looks to upskill.

Given the demand for digital skills it is no surprise to see the recruitment services CPV place highly, as organisations look to fill these much-in-demand roles.

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