On 6th September MOD published its annual Finance & Economics Statistical Bulletin on Trade, Industry & Contracts. This details MOD spending with industry and sets out the numbers, types and values of contracts placed, major equipment projects and payments made by MOD to its suppliers during 2017/18. The statistics show that MOD paid £24.6Bn to UK and foreign owned organisations in 2017/18, a year-in-year increase of £200M. 42% of this was spent with MOD’s top 10 suppliers. The largest spend on any single project was £8Bn on the F-35 Lightning II programme. Of specific interest to many NDI members, is the removal of data pertaining to spend with SMEs, removed for 2018 due apparently to data quality issues. According to the report, SME status of approximately 7,000 (52%) MOD direct suppliers has not been assessed. This, according to the report, would mean publishing a reducing level of direct spend with SMEs, which would not necessarily reflect the true level of contracting. NDI continues to call on MOD to publish robust reporting against its target of spending 25% of its budget with SMEs (both direct and indirect) by 2020.
Doubts cast on MOD’s plan to develop next-generation fast jet
On Monday the Financial Times reported on progress being made in MOD following the announcement of both the Combat Air Strategy and its accompanying project, ‘Team Tempest’. The Financial Times compared the apparent £20bn shortfall in the UK’s defence equipment budget, and the resultant work being done to develop a coherent future procurement plan under the Modernising Defence Programme (MDP). The MDP had been due to be published in July, though that deadline was missed as the MOD failed to conclude a budget settlement with the Treasury. Given the financial situation MOD finds itself in critics have, according to the Financial Times, dismissed the Tempest proposal as a pipe dream. The article nevertheless reported that officials from MOD and executives from the four lead companies — BAE Systems, Leonardo, MBDA and Rolls-Royce — are busy developing a business case, meant to be completed by the end of the year. This lends weight to MOD’s retort to the Financial Times, stating there should be no doubt over the UK’s ambitions to remain a ‘world-leader in the next generation of air power’. According to MOD, the work has already been backed up by £2bn of funding. While the government is not expected make an investment decision on the project until 2025, Tempest is thus considered essential to sustaining the UK’s combat aerospace sector.
Defence and Security Accelerator launches two new competitions
The Defence and Security Accelerator, the MOD’s principal mechanism for nurturing private sector innovation that has the potential to advantage UK Armed Forces, this week launched two new focused competitions. The first aims to find solutions for protecting multiple soldiers from fragmentation and ballistics on the battlefield, an area of interest due to recent developments in both materials science and novel design technologies. DASA will provide £600k for phase 1 of the competition, with additional funding available for further phases. The second competition seeks potential solutions for developing a deployable solution to predict and counter future cyber threats. Seeking novel approaches to cyber security, these would predict the most likely offensive cyber events and/or predict optimal defensive cyber actions. Up to £1 million of funding is available in Phase 1 to fund 5 to 10 proof-of-concept research projects of up to six months in duration. NDI members with potential solutions to either competition are strongly encouraged to apply.
MODERNISING DEFENCE PROGRAMME: Asked whether all additional finance in the Modernising Defence Programme will be generated by greater efficiency through business modernisation, Defence Secretary Gavin Williamson MP answered only that ‘We are committed to embracing new approaches, processes and technologies to deliver the intent set out by the Modernising Defence Programme - and, in doing so, maximise our efficiency and effectiveness. Significant work to develop these plans is currently under way.’
TYPE 31e FRIGATE: Asked a series of questions relating to the suspension of the Type 31e frigate competition, Minister for Defence Procurement, Stuart Andrew MP made the following statement: ‘The Ministry of Defence took the decision to stop the procurement of the Type 31e Frigate because we had not received sufficient compliant bids for the Competitive Design Phase. The market was formally notified on 20 July 2018. We communicated our plans for the first stage of the new procurement on 13 August 2018 by issuing a Prior Information Notice (PIN). This PIN invited potential suppliers to a short period of early market engagement to allow us to share with industry key elements of the new procurement, including technical and commercial information. The outcome of this market engagement will inform the next steps of the new procurement process. There has been no change in our plan to procure a first batch of five new Type 31e Frigates for £1.25 billion.’ In response to a separate question, Mr Andrew stated that ‘There has been no change to our plans for the first Type 31e Frigate to enter service by the end of 2023, with all five ships delivered by the end of 2028.’
FUTURE COMBAT REQUIREMENTS: Asked for details on the Army’s and Royal Navy’s primary agencies identifying and investigating innovative solutions to future combat requirements, Mr Andrew replied that ‘There is a dedicated innovation cell in Navy Command's Maritime Capability Division that has responsibility for identifying the future combat capability requirements for the Royal Navy and for developing potential capability solutions as cost-effectively as possible. For the Army, the Future Force Development Branch of the Army Headquarters' Capability Directorate leads on considering how the Army will fight in the future and identifying related combat capability requirements. In addition, the Land Warfare Centre leads on innovating solutions to the shorter term future, and 1st Armoured Infantry Brigade is leading on 'Strike Experimentation' in support of the Joint Force 2025.’
AUTONOMOUS LAST MILE RESUPPLY: Asked which UK companies are participating in the Autonomous Last Mile Resupply project, Mr Andrew replied that ‘Five bids were selected for Phase 2 of the Autonomous Last Mile Resupply Challenge, four of which feature UK-based lead contractors. These are: QinetiQ Ltd; Animal Dynamics Ltd; Barnard Microsystems Ltd; and, Horiba Mira Ltd. The fifth lead is Fleetonomy ai, a Finnish-based company. All of these lead contractors will be utilising broader support from additional UK-based sub-contractors (which include industry and academia) in order to maximise the delivered capability under this phase of the project.’