UK MOD opens defence market to more SMEs

The UK Ministry of Defence (UK MOD) has launched a new initiative to help Small and Medium Enterprises (SMEs) win more defence contracts by lowering the threshold value for advertising UK MOD contracts.

The threshold value for advertising UK MOD contracts will be lowered from 30 April 2007 which will encourage more competitive bidding for a wider range of defence business and encourage greater innovation from industry.

Lord Drayson, Minister for Defence Equipment and Support (DE&S):

We are committed to making the Ministry of Defence SME-friendly. This is one of a range of initiatives aimed at making its easier for small and medium companies to do business with us.

SMEs play a crucial role in UK defence business and represent a significant core of direct suppliers to MOD. In 2005, just over half of all MOD contracts let were placed with SMEs, to the value of over half a billion pounds. Today's announcement is a significant development and one which I am convinced will further promote a dynamic and competitive supplier base.

From 30 April 2007, the threshold for 'warlike' requirements will be lowered from £500,000 to £93,000; then on 30 June 2007, lowered again to £40,000.

The threshold for 'non-warlike' requirements will also be reduced on 30 June 2007 from £93,000 to £40,000. Furthermore, from the 30 June 2007, UK MOD project teams will be encouraged to consider advertising requirements with values as low as £20,000. This change could generate up to 7,000 additional adverts a year.

This change is in line with one of the key themes of the Defence Industrial Strategy (DIS) and reaffirms the UK MOD's commitment to working with SMEs.

Source: UK MOD

To find out how your company can successfully identifiy and compete for procurement opportunities with the UK MOD, contact Jeffrey Strategic.