In early September the MoD published the annual Trade, Industry and Contracts 2018. A document packed with interesting statistics about the figures and trends from defence procurement in the past 12 months. As part of the Government’s push for greater transparency and accountability the release provides an interesting insight into the values of defence contracts and how that is spread across industry in the UK and globally.

ADS will publish a short series of blogs looking at these statistics in the coming weeks. Many issues and trends are raised in the release, with MOD direct spend, competitive and non-competitive comparisons, spread of contract values across industry, and exports all featuring.

Similar to last year’s release a noticeable omission from these statistics is the lack of specific SME contracting data. The MoD include a short justification for not including these statistics, citing that “for over 52% of the MOD’s 14,000 direct suppliers their SME status is unknown and a decision has been taken that the data quality is not sufficiently good to be included in an Official Statistic.”

It is disappointing to again see the lack of SME statistics in this report. Given the noticeable push on the topic from the department in the last few years it raises questions as to the success of these initiatives. The complex nature of defence contracting does justify the lower 25% direct spend target for the MOD (as opposed to 33% across the rest of government). However, the lack of data on the journey to reach that target makes it harder for industry to place greater confidence in progress to date or future initiatives. There must be a balance struck between the cost of additional data collection and verification, and the value that data brings – ADS believes a more accurate understanding of SME supplier base would lead to greater benefits for the customer and more efficient contracting.

To address this situation the MOD is developing an SME Action Plan, intended to tackle the myriad issues associated with SME defence contracting, as well as the collection of relevant data sets and transparency of the process. The Action Plan represents a thorough and detailed set of implementable actions that are spread across Head Office, DE&S, and the Front Line Commands. They emphasise making information more freely available where possible, better communication of opportunities targeted at SMEs, and a review of key commercial and procurement processes that have previously been the reserve of experienced DE&S and Prime commercial teams. ‘Making it easier to do business with Defence’ is a mantra often repeated in SME contracting discussions, and the Action Plan is the MOD’s central effort to achieve this.

ADS will continue to work with the MOD on this task and would welcome an effort to include SME contracting statistics in future iterations of the Trade, Industry and Contracts 2018.

Keep an eye out next week for the next blog in the series looking at the Trade, Industry and Contracts statistics.