PHILIP MARGERISON DSS PRESENTATION SELLING TO THE MOD

1. PHILIP MARGERISONDSS PRESENTATIONSELLING TO THE MOD Email: defcomrclsrt-dss@mod.uk Tel: 030 679 32844/32843/32832 Website: www.contracts.mod.uk Defence Suppliers’ Service

2. What MOD spends to provide and sustain military capability In FY 2013/14 approx. £20.4Bn spent with third parties on a wide range of products & services – amounts to 40-45% of total Government spend with third parties Direct spend with SMEs in FY 2013/14 of £916M with over 7,000 different SMEs This does not include business that SMEs have with MOD suppliers Defence Suppliers’ Service

3. Contracts placed: In FY 2013/14 approximately 2,300 new contracts 60% valued at less than £100K 7,500 contractors with extant contracts Over 1,000 Commercial Officers in the overall MOD acquisition organisation

4. National Security through Technology: Technology, Equipment & Support for UK Defence and Security White Paper published early February 2012 Section devoted to SMEs – important aim is to make it easier for them to do business with UK MOD

5. Package of Measures to Increase Opportunities for SMEs to Participate in Government Procurement Appointment of dedicated Crown representative for SMEs Adopted new common core PQQ – working towards Government aim of minimising use of PQQs for lower value requirements Greater use of ‘lotting’ strategies and outcome-based specifications A ‘mystery shopper’ service so businesses can tell Government where there are still issues Creation of an SME panel Flagging of opportunities that may be suitable for SMEs

6. Package of Measures to Increase Opportunities for SMEs to Participate in Government Procurement Revise guidance to ensure SMEs are not rejected at pre-qualification on rigid basis of turnover-to-contract value ratios without proper assessment of company’s actual capacity and potential. Use e-procurement to roll out simplified, streamlined contract templates for lower value procurements – reducing volume of paperwork & improving consistency. Expand utilisation of e-procurement system to speed up invoicing & billing – will benefit SMEs particularly for whom cash flow is critical. New round of engagement with SMEs & relevant Trade Associations to better understand the blockers, opportunities & potential solutions. Ask major prime contractors to advise on steps they will take to increase SME participation in supply chain for Government contracts.

7. The Defence Equipment Plan Published January 2013 Planned spend of £159Bn for new equipment, data systems and equipment support over 10 year period Combat Air sector – planned spend £18.5Bn – covers fast jets; Unmanned Aerial Vehicles; military flying training and procurement of training aircraft Air Support sector – planned spend £13.9Bn – covers all large aircraft, including transport, air-to-air refuelling and large ISTAR platforms Helicopter capability - planned spend of £12.1Bn – completion of Wildcat programme; Puma Life Extension programme; purchase of additional 14 Chinook helicopters ISTAR – planned spend of £4.4Bn on ISTAR programmes over next decade

8. The Defence Equipment Plan Land Equipment – planned spend of £12.3Bn – upgrade of Warrior Infantry Fighting vehicles, continued development of family of Future Rapid Effects System (FRES) vehicles, including Scout and Utility variants Ships – planned spend of £17.4Bn – completion of the 2 QE class aircraft carriers; delivery of remainder of 6 Type 45 destroyers; design & development of Type 26 Frigates; development of Maritime Afloat Reach and Sustainability programme Submarines and Deterrent – planned spend of £35.8Bn – completion of remainder of Class 7 Astute attack submarines; replacement of Vanguard class submarines Weapons – planned spend of £11.4Bn on various weapons programmes Full Defence Equipment Plan available at: https://www.gov.uk/government/publications/the-defence-equipment-plan-2012

9. Defence Growth Partnership Launched Autumn 2013 Govt & industry partnership to secure a thriving UK defence sector, delivering security, growth & prosperity Work together to develop new opportunities Delivering growth through innovative & tailored solutions for customers around globe DGP – opportunity for companies at all levels of UK industrial value chain to participate Contact: dgp@adsgroup.org.uk

10. Crown Commercial Services Created to act on behalf of Crown & drive further savings for taxpayer Improve quality of commercial & procurement activity across public sector 22 categories of common goods & services MOD already involved in 9 of these & in FY 2012/13 processed £1.4Bn through CCS arrangements First wave of MOD transition plan focused on 4 categories Consultancy & Contingent Labour (CCL) Energy (gas, electric & fuels) Fleet Certain commodity elements of IT hardware & software & existing Information Assurance scope Customer Support: 0345-410-2222 Supplier Support: 0345-010-3503 Customer Service Desk: info@ccs.gsi.gov.uk Supplier Service Desk: supplier@ccs.gsi.gov.uk Website: https://ccs.cabinetoffice.gov.uk

11. MOD Procurement Policy Obtaining value for money through: Whole life costs Performance Delivery Quality

12. Approach Reasonable Opportunities to Compete Impartiality & Consistency Confidentiality EU Public Procurement Regulations Advertise Requirements

13. Acquisition Strategy Currently approximately 100 acquisition teams within DE&S Effective & transparent audit trail Approved at appropriate level for costs – Initial Gate and Main Gate approval (for requirements above £20M) Explanation of most cost effective solution Assessment of risks and benefits involved Include ‘exportability’ options Industry Days – ‘Announcements’ section of MOD DCB/DCO

14. Competitive Tendering Competition preferred procurement route wherever feasible or possible Vendor assessment and pre-qualification techniques Prospective bidders limited to around six

15. Tender Criteria Third party Quality Assurance certification Financially sound Managerial capability Technical competence

16. Supplier Selection Generally no more than 6 suppliers in competition Expressions of interest from industry Pre-Qualification Questionnaires (PQQs) Objective evaluation of relevant factors MOD encourages approaches from consortia of small companies that may be better able to offer a solution & accept the risk than individual SMEs MOD requirement for Consortia to have a proper legal identity as a basis for receiving a contract But – sometimes there is only one supplier

17. Non-Competitive Contracts Pricing agreed prior to contract placement No Acceptable Price, No Contract (NAPNOC) Mandatory for all non-competitive £1M+ contracts Approx £3.19Bn non-competitive contracts placed in FY 2013/14 All non-competitive requirements advertised in MOD DCB for possible sub-contract opportunities

18. The Tender Process Formal invitation to tender Clear documentation, evaluation criteria and weightings Clarification questions Bidders conferences Tenders submitted through independent Tender Board Tenders assessed Tender Assessment panel evaluate against pre-agreed criteria

19. Contract Award Criteria Technical & contractual compliance Clear-cut decision Down-selection process may be necessary Negotiation may be necessary Winning and losing bidders normally informed at the same time Debrief available

20. Defence & Security Industrial Engagement Policy Policy aims: Principal aim: to enhance the capability of the UK’s defence and security industry by encouraging overseas-based companies to engage with UK companies and other institutions Achieved through: Export through supply chain activity R&D Investment Technology transfer E: desirg-2-assthd@mod.uk; Tel: 0117-91-30271

21. Commercial Toolkit Available to MOD staff & industry Contains guidance on a wide range of commercial policy topics, DEFCONs, DEFFORMs etc www.gov.uk/acquisition-operating-framework (free use, requires no-cost registration) Commercial Toolkit; https://www.aof.mod.uk/aofcontent/tactical/toolkit/content/defcons/defcon.htm Select either ‘Guidance Topics’; ‘DEFCONs’ or ‘DEFFORMs’ Also see ‘Winning the Contract’ course www2.learndirect-business.com/business-courses/winning-the-contract/

22. Advertising MOD’s Requirements MOD routinely advertises: All its competitive and non-competitive, ‘warlike’ and ‘non-warlike’ requirements for goods & services valued at £10,000 and above are advertised free of charge, on the Defence Contracts Online (MOD DCO) portal (www.contracts.mod.uk) MOD DCB magazine available on subscription starting at £295 pa Requirements which meet the relevant criteria also advertised in Official Journal of the European Union (OJEU) and ‘Contracts Finder’ portal as well as on the MOD DCO portal MOD requirements valued at below £10K are not advertised centrally and are generally procured on a local or regional basis

23. European Procurement Law All public procurement in the UK subject to Treaty on the Functioning of the European Union (TFEU) Principles are: Non-discrimination (on grounds of nationality) Equal treatment (of all suppliers in any procurement context) Transparency (so that all parties can see that MOD is acting in a fair and non-discriminatory manner) Mutual recognition (of equivalent documents, standards and certificates from other EU Member States)

24. 24 Defence Suppliers’ Service

25. Contract Notices • Contract Bidders’ Notices • Competitive/Non-competitive Contract awards • Sub-Contract Opportunities • Addendum Email: bip@bipcontracts.com Website: www.contracts.mod.uk 25 Defence Suppliers’ Service

26. Guide to Contract Notices Contract Notices Identification number Expressions of Interest deadline Issuing branch Summary QA Standards 26 Defence Suppliers’ Service

27. Guide to Contract Notices Contract Bidder Tender No. ITT Issue Date Deadline Issuing Branch Summary of Requirements Issued To 27 Defence Suppliers’ Service

28. Guide to Contract Notices Non-Competitive Contract Awards Issuing Branch Summary of Requirements Contract No. Awarded To . 28 Defence Suppliers’ Service

29. Guide to Contract Notices Competitive Contract awards Issue date Issuing branch Summary of Requirements Awarded to 29 Defence Suppliers’ Service

30. Guide to Contract Notices Addendum Contract/ITT number Summary Advertised in 30 Defence Suppliers’ Service

31. Supplier Information Database (SID) SID accessed via www.contracts.mod.uk website Companies can submit their profiles free of charge SID available to MOD acquisition staff as a resource to help draw up a tender list/source a product or service Over 8,000 companies have submitted their profiles to the SID By logging their profile on the SID, it does not guarantee that companies will be invited to tender for MOD requirements

32. Dynamic Pre-Qualification Questionnaire (DPQQ) Launched in September 2013 as part of MOD DCO portal (www.contracts.mod.uk) Allows MOD commercial staff to create an electronic PQQ – issued as part of contract notice Potential suppliers will express an interest in the requirement by completing DPQQ on line Saves up to 28 days by combining two parts of procurement procedure Reduces effort to create a PQQ & to complete a PQQ as suppliers can store information on their capabilities on MOD DCO portal

33. Contracts Finder Portal Cabinet Office agreed ‘Contracts Finder’ portal to host tender & contract documents & live contract opportunities ‘Contracts Finder’ portal publish all Central Government contracting opportunities above £10,000 ‘Contracts Finder’ portal – free to use; easy search facility; provide free e-mail alerts ‘Contracts Finder’ portal launched on 11 February 2011 Accessed via www.contracts-finder.co.uk

34. DEFENCE SUPPLIERS’ SERVICEPart of Supplier Relations Team (SRT) Help Desk Email: defcomrclsrt-dsshelpdesk@mod.uk Website: www.contracts.mod.uk Tel: 030 679 32844/32843

35. Defence Suppliers’ Service Explain UK MOD Procurement & Procedure Provide Information brochure Provide Product requirement advice Provide Contact points

36. 21st Century Supply Chain (SC21) Programme Launched by the Society of British Aerospace Companies (SBAC) in 2006 Open to all suppliers in the aerospace and defence industry – further information can be obtained from www.adsgroup.org.uk – click on ‘SC21’ hyperlink Three key workstreams aimed at improving the efficiency and effectiveness of the supply network; Accreditation Performance and Development Relationship MOD signed up to the programme in 2008

37. Centre for Defence Enterprise Is the first point of contact in MOD for anyone with an innovation that has a potential defence application Successful applicants could benefit from: Proof-of-concept funding in the form of a research contract Support from military scientists and engineers MOD trials and testing facilities Mentoring service Unique insight into UK & non-domestic defence markets Received +4,700 research proposals – around 750 selected for funding Resulting in total contract value of £44M – approx half of CDE contracts SMEs Contact tel: 01235 438445 Email: science-enterprise@mod.uk

38. Other Points of Contact UK Trade & Investment Defence and Security Organisation – Small Business Unit Contact: Howard Gibbs – Head of Small Business Unit Tel: 0207-215-8204 Email: howard.gibbs@ukti.gsi.gov.uk Website: www.dso.uktradeinvest.gov.uk

39. Information Pack 39 Defence Suppliers’ Service