SME engagement in Major

Defence programmes

Agenda

• Overview of the opportunity

• UK Government Targets

• What's Changing

• Direct opportunities

• Prime Contractors and OEM’s

• Is your business prepared

• Ways to identify; compete and win

Overview of the opportunity

• £8.5 Bn UK Defence Exports (FY 2014)

• £19.6 Bn UK MOD spend (FY 2014) – This represents 40% total Government spend to 3rd

Parties • Only £832M direct spend with SME’s

• This was spread between 7000 SME’s

• Average spend of £120K

• Value of spend indirectly reaching SME’s estimated below £3Bn.

UK Government Targets

• 25% target for MOD procurement spend to reach SME’s by 2020 – Defence Infrastructure Organisation - DIO

– Defence Equipment and Support – DE & S

– Information Systems and Services - ISS

– Defence Science and Technology Laboratory – DSTL (some restrictions)

• NAO report showed current achievement of 19.4% – However this report questions the measurement criteria

UK Government Targets

• Achieving the 25% target relates to circa £5Bn

being spent with SME’s by 2020 if spend is

equal.

What's Changing

• SME Policy refresh

– Focus on entire Supply Chain –not just direct

– Reducing Procurement Bureaucracy

– Simplifying Engagement – “MOD Supply Chain

Development Advocate and Champions”

What's Changing • Review the effectiveness of the Defence Suppliers

Forum - SME

• Supplier Engagement Portal – through gov.uk website – Policy and Process

– Links to research establishments and funding streams

– Increase awareness of how to find opportunities

• Abolition of PQQs for contracts below £100k

• Creation of Common core PQQ – reusable

• Simplified template contracts for values below £250k

• Increase in “lotting” strategies and outcome based specifications

Direct Opportunities • Defence Contracts Online - DCO

– Free service

– All MOD opportunities above £10k - www.contracts.mod.uk

– Daily Alerts by email

– Searchable by CPV (Common Procurement Vocabulary) codes, or standard phases e.g. military vehicles

Example requirements 31/05/16

• Industry CPV code 38540000 - Machines and apparatus for testing and measuring. Est value -

between £113k - £348k

• Industry code 19212310 - Canvas Items and Other Soft Trim Accessories. Est value - £700k

• Industry CPV code 45223210 – Structural Steel Works. Est value – between £870k - £4.5m

Direct Opportunities

• Defence Contracts international – DCI – Subscription based service

– International Defence contracts

– Market intelligence reports

– Spend Analysis – product; country; business etc.

• Contracts Finder Portal – Central Government and wider Public Sector opportunities above £10k -

https://www.gov.uk/contracts-finder

• Bluelight Emergency Services e-tendering- https://bluelight.eu-supply.com

• Opportunities below £10k advertised regionally

• Major Defence Programmes through Primes and OEM’s

– Example primes – Airbus; BAEs; Thales; Lockheed Martin; Babcock;

General Dynamics etc.

– Example OEM’s - Kelvin Hughes; Ultra Electronics; Cobham; Meggitt

etc.

• Two types of requirement – Standard services & equipment

• Usually well established Supply Chain in place.

– Innovative products and processes

• Issue to identify route to entry.

Prime Contractors and OEM’s

• Traditional challenges for SME’s

– Unbalanced negotiations

– Identification of opportunities

– Fear of loss of IP

– Flow of Risk

– Unfamiliar contract terms

– Compliance issues to specific standards, quality; safety;

environmental etc.

– Export controls and constraints

Prime Contractors and OEM’s

• Changing market – Primes being incentivised to use SME’s (UK MOD and others)

– Recognition of specific Engineering and Skills gaps.

– Balancing a stable core capability.

– Moving away from Prime Vendor lock-in

• Interoperability

• Common standards

• Joint operations

• Currency of technology

• Speed of Innovation

Prime Contractors and OEM’s

• This is impacting the business relationship

– More flexibility on terms and conditions

– Support for compliance

– More equitable Risk share

– Security of IP

– Process improvement

– Joint development

Prime Contractors and OEM’s

Prime Contractors and OEM’s • Opportunities to Engage

– Defence Events “Meet the Buyer” / Prime contractor engagement

villages

• DPRTE (Defence & Procurement; Research & Technology; Exportability)

• Farnborough International

• DSEi (Defence & Security Exhibition International)

• DVD (Defence Vehicle Dynamics)

• Armoured Vehicles

• and more

– Meet the Technologist events (UKTI)

– Supplier days Programme specific

Prime Contractors and OEM’s • Opportunities to Engage - continued

– Direct contact to bidders, identified through DCO

• Shows which companies invited to bid.

• Name and details (address, tele, email) of point of contact

– Prime / OEM specific supplier registration routes

• E.g. General Dynamics Supplier Registration Portal

https://suppliers.gendyn.com/

– Industry knowledge and contacts – intermediary

– Trade bodies – ADS; FAI; WEDA; NEAA; NDA(EEF); etc.

• Do you understand the policies and standard terms

– Access the Commercial Toolkit - www.gov.uk/acquisition-

operating-framework

– Free to use

– Guidance on policy; DEFCONS and DEFFORMS

• Cyber Security – are you protected

– Jan 1 2016 Cyber Essentials & Cyber Essential +

Is your business prepared

• Do you hold relevant standard accreditations

– Quality; safety; environmental etc.

• Are your business processes robust

– Change management

– TLS

– Supply management

– Etc.

Is your business prepared

• Are you registered on SID – Supplier Information Database

– Free

– MOD acquisition staff use for sourcing

• Do you have access to DCO / DCI

– Experienced in how to use the tools

• Existing relationships with Primes / OEMS

Identify, compete and win

• Collaborative working

• Established proposal management process

• Understanding the requirement and drivers

• Value proposition – How to help the Prime meet the end

customer needs.

• Compelling, economic offering.

– Develop offerings that profitably add value

Identify, compete and win

The value proposition

Relevance Differentiator

Quantified value

VP

Background

• Defence and Aerospace sector since 2003

• National and International Bids and Projects

• Supported Industry Primes; OEM’s; SME’s and MOD

– This has provided me the opportunity to understand the cultures,

working practices and issues for both Industry and end

customers.

– Wide network of contacts.

– Currency of Market knowledge.

Contact details

Tel: 02036930528

Mbl: 07769907938

Email enquiries@optimatrix.co.uk

OptiMatrix

Alexander House

Wilbury Way

Hitchin

Hertfordshire

SG4 0AP