www.defence-advisers.com defence advisers council presentation “ the times, they are a-changing...
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www.defence-advisers.com
Defence Advisers Council Presentation
“The times, they are a-changing”
Tips from the experts for achieving procurement excellence
The Defence Advisers Council
Planning Expertise
Legal Services
Financial support and advice
Funding advice and backing
Risk Mitigation
DAC Services
Defence Advisers Council - 9 October 2012 4
MOD Key Strategic Issues
• The Future - right balance between complexity and effectivenessProcurement / Commercial
model
International dimension
Conflicts of interest
Legislation
Engagement
• International partners – keep informed and enable them to support our proposal
• Conflict of Interest - address issues in a robust but pragmatic way
• Legislation - Ensure appropriate legislation is in the 2013-14 Parliamentary Session
• Stakeholders - engage all stakeholders in developing and testing our ideas
Contribution made by the Aerospace & Defence
sector to SW region’s GDP:
– £2.3bn directly to the economy
– supports 41,000 jobs
– Supply Chain provides another £3.2bn
– and 59,000 jobs
…in the South West alone
Rationale?
• AIM: Streamline the “provision” of products and services for
client companies where “defence” is end-user.
Help simplify the approach to MOD procurement.
Enable contracts to be agreed more swiftly.
Ensure long term fiscal stability of the contract.
The Defence Advisers Council
So you want to do business in the aerospace,
advanced engineering,
defence and/or security sectors?
The Defence Advisers Council
“The AOF is the authoritative source of policy and good practice for all
members of the MOD and our Industry partners concerned with acquisition”
www.aof.mod.uk • Strategy Considerations • Invitation To Tender • Tendering And Contract Award • Contract Administration • Alliancing• Conflicts of Interest• Due Diligence• Influencing the Supplier Network• More Effective Contracting• Partnering• Private Finance Initiatives• Public Private Partnerships
Acquisition Operating Framework
So you know the language?
Please translate - Conops?
- Defstans?
- Defcons?
Is your system at TRL level 3 or 5? (Technology Readiness Level)?
Will you pass the ASEMS standards?
(Acquisition Safety and Environmental Management System)
Where do you get advice for WOME
(Weapons, Ordnance, Munitions & Explosives) development?
….. Answer: DOSG (Defence Ordnance Safety Group)
You have ISO 15288, but are your Enterprise Processes in date?
Quick Test
• Funding – get advice on funding for working capital, fixed assets and other sources of finance
• Risk Management – we help customers assess, manage and develop strategic risks, business continuity and succession planning
• Industry participation – we support and host “industry” events for our clients, with sector based experts
• Collaboration – we use our national and global supply chain contacts to help support SMEs
Specialist Advice
1. Have you prepared and planned strategically?
2. Is it very clear why MOD should buy from you?
3. Would MOD have confidence in your organisation?
4. Are you clear which ‘routes to market’ are best?
5. Have you identified your funding options?
6. Do you communicate clearly through ‘Strategy Reviews’?
Planning Tips
1. Funding – get expert advice on funding for working capital, fixed assets and other sources of finance
2. Financial Information – sector based experts regularly support industry events/briefings and liaise with customers
3. Collaboration – through its national and global supply chain contacts the bank helps WEAF and DAC to support Aerospace and Defence SMEs in the South West and wider afield
Banking Tips
Key Areas
An Example:
NatWest is helping to promote and support excellence in the South West Aerospace & Defence sectors with the launch of:
“WEAF award categories for 2013”.
Banking Assistance
* Successful implementation of business improvement
* Using innovation and technology for growth
* Growing business through new markets and products
Key messages• Be prepared for change: defence spend will be less but still high value,
commercial aerospace will see ramp up of volumes.
• Innovate: MoD and Primes are looking for financially sound, innovative, and competitive suppliers.
• Financial efficiency: make the most of tax and other financial opportunities.
• Grant funding: still available BUT requires planning eg Regional Growth Funding in excess £70m secured by Aerospace and Defence companies in the South West, last year
• Review your strategy: seek opportunities to partner, strengthen your position through acquisition, sell non- core business ….. Get your due diligence/advice right!!
• Sustainability: ensure you have a robust financial plan, with genuine contingency.
PwC Tips
Be competitive: Tax and financial efficiency = cash savings
Be efficient: Tax planning to save cash:
• R&D tax claims can return cash and reduce corporation tax.
• Registered patents offer opportunities to pay tax at 10% rate.
Be Sustainable:
• Buyers look for robust company processes, finances and compliance systems.
• Use experts to review your systems, conduct a financial audit and help you ensure compliance.
• Without sustainability you can miss out by failing at the tender stage.
PwC Answers
• Liability for defects
• Liquidated damages
• Liability for delays
• Cancellation rights
• Ownership of intellectual property
• Fixed prices
• Payment terms
Crossing the Legal Minefield
• Understand the contract you sign
• Some DEFCONS are negotiable,
some are not….
• 534: Prompt payment
• 566: Change of control
• 703: Intellectual property rights
• 649: Passing of ownership
And many others!
THE MINES…..
Defence buyers want more collaboration What does that mean? What is you best legal solution?
Crossing the Legal Minefield
Legal contracts are changing Risks are being shared You need to protect your business
COLLABORATION IS THE KEY TO SUCCESS…..
SO WHAT
HELP IS AVAILABLE
If you value your proprietary technology then protect it!
• Own your IP - once captured, it is an asset adding significant value to your business.
• Get trade mark protection for your brands / company name.
• Your technology or “innovation” is potentially valuable & it may be patentable.
• Paying UK corporation tax? A granted patent in the UK could reduce your tax bill (“Patent
Box”).
• IP rights are legal rights providing the owner with the right to exclude third parties from
doing something:
o IP rights are exclusory – but do not necessarily create a right to commercialize/use.
o Be aware of the IP rights of others. Can you/ should you guarantee that your
offering is free of any IP infringement risk?
• To survive long-term, SMEs need to get IP and make use of it.
IP Tips
WEAF can help you:
Link collaborations/clusters/companies into Government funded R&D drives
Develop supply chains with accredited business improvement programmes
Help with the formation of collaborative ventures/joint-venture companies
Up-skill workforces through proven and recognised training programmes
Support sales and business development through networking & “meet-the-buyer”
events throughout the year + Senior Management Briefings from the Primes
Provide marketing platforms at major industry events e.g. FIAS & DSEI
Deliver the ultimate regional networking opportunity - WEAF annual conference
Link with academic partners (universities at Bath, Bristol, Bournemouth, Exeter, &
Plymouth & the Knowledge Transfer Network to exploit emerging technologies).
Promote innovation through a prestigious annual “Excellence in Innovation” Award
WEAF
Our approach means we:
• Share your ambitions – we learn to understand our clients business, not just the numbers.
• Deliver expertise – we aim to bring benefits to you before you get desperate.
• Make things simple – we enable you to get on with running your business and spend less time worrying about ‘our’ specialities.
• Provide a dedicated sector team – our expert team aims to support our clients to realise their aspirations by pooling our common knowledge for your benefit.
SUMMARY
Key messages for today
• “Preparing for Change” means working collaboratively with other
aerospace, defence suppliers and security suppliers and customers
• Get your:
– planning right,
– your collaboration right,
– your contracts right
– and of course – GET YOUR FINANCES RIGHT
Avoid the mines in the minefield!
Defence Advisers Council
DEFENCE ADVISERS COUNCIL
Abel & Imray Jim Pearson [email protected] 01225 469914
WEAF: Barry Warburton [email protected] 01275 872 353
Nat West: Paul Severs [email protected] 07795 644 891
VWV: Richard Brown [email protected] 0117 314 5222
AugMentor: James Short [email protected] 01275 848 991
PwC: Duncan Stratford [email protected] 0117 928 1006
QUESTIONS?