techUK news and views
27 Jan 2022

techUK Summary: MOD SME Action Plan 2022

The Ministry of Defence has today published its new SME Action Plan, which follows the department’s first iteration of the Action Plan, published in March 2019.

The MOD’s SME Action Plan builds on the 2021 Defence & Security Industrial Strategy (DSIS) and sets out 13 commitments which the department will undertake to support SMEs in the Defence supply chain and includes a summary of the key areas where the MOD has made demonstrable progress since the 2019 Action Plan.  

Areas of progress include: 

  • The establishment of a new Defence Suppliers Forum SME Working Group 

  • Regular meetings between the MOD and the Defence focused Trade Associations (ADS, Make UK Defence and techUK) to identify and address existing and emerging SME specific issues 

  • Changes to MOD commercial policy such as its approach to Limits of Contractor Liability 

  • MOD support to fair payment practices by excluding bidders who do not demonstrate fair payment practices and promoting the Prompt Payment Code 

  • The refreshment of the MOD’s early market engagement strategy 

  • A requirement for suppliers of major contracts to advertise sub-contracting opportunities on the Defence Sourcing Portal 

  • The introduction of simplified, plain English contracts for lower value, less complex procurements, and for the procurement of innovative requirements below £1M 

  • The application of the government’s Social Value policy in MOD contracts  

The 13 commitments in the new SME Action Plan are: 

  1. Evidence from Strategic Suppliers on effective engagement of SMEs 

  1. Revising the UK’s Industrial Participation Policy 

  1. Establishing an MOD and Industry funded Defence Supply Chain and Innovation Programme 

  1. Establishing a UK-wide Defence Technology Exploitation Programme (DTEP) 

  1. Replacing the current PCR and DSPRC regime with a uniform set of public procurement rules 

  1. Publishing updated proposals in a Command Paper to drive desired outcomes through Prime contractors 

  1. Ensuring MOD commercial staff have the skills to take a proportionate, risk-based approach  

  1. Upskilling the commercial function to exploit the reforms to policy and practices  

  1. Pilot a network of new regional Defence & Security Clusters (RDSCs) 

  1. Revised guidance which supports the adoption of an agile approach to delivery 

  1. DASA innovation challenges to enable SMEs to bid for funding 

  1. Running a competition for SMEs to bid for Defence Innovation Loans 

  1. Provide an Access to Mentoring Finance service to all SMEs that receive DASA funding  

Responding to the publication of the MOD’s SME Action Plan, techUK’s CEO Julian David said:

'techUK welcomes the publication of the MOD’s SME Action Plan, which builds on the progress made by the department since it’s first publication of the Action Plan in 2019. SMEs represent a significant proportion of the technology and digital supplier base in the UK Defence sector, and it is great to see a steady rise in both direct and indirect MOD spending with them since 2019.

Along with the rise in departmental spending with SMEs, techUK welcomes the commitments laid out in the Action Plan, which have been created through close consultation with techUK and our SME members. Continual monitoring of progress against the Action Plan’s commitments will be vital, and we will be working closely with the department to help achieve the outcomes the plan sets out.’

To read the SME Action Plan in full, click here. 

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