A guide to help SME's identify and win Defence contracts.

1. SME engagement in Major
Defence programmes

2. 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

3. 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.

4. 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

5. UK Government Targets
• Achieving the 25% target relates to circa £5Bn
being spent with SME’s by 2020 if spend is
equal.

6. 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”

7. 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

8. 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

9. 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

10. • 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

11. • 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

12. • 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

13. • 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

14. 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

15. 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.

16. • 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

17. • 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

18. • 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

19. • 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

20. The value proposition
Relevance Differentiator
Quantified value
VP

21. 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.

22. Contact details
Tel: 02036930528
Mbl: 07769907938
Email enquiries@optimatrix.co.uk
OptiMatrix
Alexander House
Wilbury Way
Hitchin
Hertfordshire
SG4 0AP