DN - Defence Notes

DSEI 2017: UK procurement process could eliminate innovation

11th September 2017 - 02:09 GMT | by Alice Budge in London


Ahead of DSEI the UK procurement process has come under scrutiny as industry leaders question its future flexibility. 

ADS Group chief executive, Paul Everitt laid bare his concerns regarding the UK defence procurement process at the launch of the ADS annual industry guides in London.

When discussing the challenges facing future UK procurement programmes Everitt called on the government to adopt a more flexible approach. 

In particular he identified the government’s continued focus on competition as one area that needs to be reassessed to ensure it is delivering value for money for the tax payer and providing the correct equipment to front line forces.

‘The approach to public procurement which has all been about competition … is now not delivering well enough,’ he said.

Everitt stated that short term contracts which are re-tendered every five years are impinging on efforts to secure best value for money, adding that ‘too much competition isn’t always good.’

The problem is that currently contracts are put up for re-tender every five years without giving the incumbent priority over competitors. This means the contract may be passed onto another contractor, wasting investments.

‘There is no benefit investing in new stuff or new developments because the Ministry of Defence (MoD) may well hand those over to your competitors… if you’re a small company in particular that doesn’t sound attractive,’ he explained.  

However, some progress has been seen with the UK Industrial Strategy and the recent release of the government’s National Shipbuilding Strategy.

According to Everitt, this suggests the government is taking a longer term view, although he cautioned that there are ‘still plenty of opportunities for it to be done better’.

While budget challenges continue to weigh heavily on the minds of decision makers, competition needs to be handled in a more intelligent and efficient way to provide the flexibility to include SMEs at the forefront of innovation in the conversation at an earlier point.

He warned that if communication problems between SMEs and government procurement programmes are not resolved and the system made less complex, the result will be ‘the elimination of innovation.’

‘What we need to have is a consistent approach which allows industry to invest and allows us to deliver the best value to the customer,’ Everitt commented.

Responding to a question on what the defence industry may look like if the government fails to adopt a new attitude towards procurement policy Everitt said: ‘Over time we will see the gradual hollowing out of UK capability and we will see UK businesses investing more of their resources into other markets.' 

He noted that companies with a UK-based supply chain and predominantly UK-orientated customers 'will find life increasingly difficult’. 

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