Tenders for Defence Contracts

Winning a Defence contract

The Ministry of Defence (MOD) is the UK’s single largest procurer of products and services, with a commitment to spend at least 2% of UK GDP on defence from 2015-2025. In 2017/18 alone this equated to almost £20 billion – over 40% of all UK government procurement spend. The MOD even have their own procurement portal, Defence Contracts Online.

As you would imagine, defence tenders are not just limited to the more traditional military goods such as tanks or weaponry but cover a huge range of goods and services in many different sectors. The MOD have also stated that they recognise that SMEs have a great deal to offer in terms of promoting economic growth. They are working to help SMEs gain a greater share of defence related business by improving access to their tenders, and want at least 25% of their procurement spend to go to SMEs by 2022. This means there are huge opportunities out there for SMEs to grow their business by winning defence tenders.

Defence tenders, however, can be very technical, complex and often large. They can therefore be somewhat off-putting for smaller businesses, but fundamentally, the MOD operates just like any other public sector commissioner/buyer. Understanding their underlying motivations, not just their stated requirements, and demonstrating that your offer is in in precise alignment with them is critical to winning a defence contract.

The MOD currently have an emphasis on innovation in order to attract new or non-traditional suppliers, and to keep ahead of the rapidly changing global security and technology landscape. This is an area where SMEs can really excel and compete with the larger corporate organisations, who although they may be perceived as better resourced or lower risk, have more constraints and perhaps move much more slowly than an SME is able to.

As stated previously, defence tenders cover a huge range of UK wide products and services, providing a rich source of opportunities for your business to grow. Just some of the products and services that might be specified in a defence tender include:

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Tender top tips

Top tips for winning Defence contracts

1. Read all the tender documentation

There may be a lot of documentation, but you need to understand exactly what the MOD is looking for and whether you are able to meet all their requirements. There are likely to be references to Defence Conditions (DefCons), Defence Standards (DefStans), Security Clearance Protocols and Special Notices and Instructions to Tenderers (SNITs) which will all need to be read. Tender submission requirements can often be complex so set aside the time needed to thoroughly understand the entire scope of what you need to do. Check carefully whether having a particular accreditation is an absolute pass/fail, or whether there is opportunity to explain an alternative.

2. Give quality assurance

Do your systems and processes have any quality assurance accreditation? Are you registered with the appropriate industry bodies? How do you monitor your supply/service performance so that a quality service is always delivered? How do you ensure it is timely? How do you manage delays? Consider reports, log books, audits and use of technology to show you have fool proof systems in place. What systems do you have in place for dealing with any problems or complaints? How have you learnt and acted on feedback to improve the quality of your defence related services?

3. Health & safety

The MOD is risk averse and wants to be confident that the services you provide will be carried out to the highest Health & Safety standards with minimal risk to your employees, their employees and the general public. Can you demonstrate staff training and qualifications in Health & Safety? How do you keep up to date with new guidance and communicate H&S arrangements to staff? You will need to supply plenty of evidence such as your H&S policy, risk assessments, method statements, and H&S audits. Critically it is just as important to show how you have learned from any Health and Safety incidents, rather than stating accidents never happen.

4. Staffing

Your staffing structure must meet the qualifications, skill mix and service delivery requirements detailed in the specification. Does your recruitment process follow Safer Recruitment guidelines? What are your recruitment compliance checks? Do you need a specific security clearance to deliver the contract? What is your training program? How do you ensure the retention of compliant, qualified, high-performing staff? How do you manage the conduct and performance of your staff? The MOD will be looking for confirmation that you have the right staff to deliver the contract, so ask yourself – what level of qualifications, clearances and training should they have?

5. Comprehensive Mobilisation & Implementation Plan

To satisfy the MOD, your mobilisation/implementation plan will need to demonstrate that your service will be in place and fully operational from day one, including all resources and processes and that all potential risks to implementation have been mitigated. Do you have mobilisation risk assessments that you can show? You need to show how your previous experience of implementing a new service will be utilised to deliver an effective and successful service this time. The best tender responses will demonstrate that you have thought about all elements of a thorough mobilisation (e.g. kick-off, data transfer, resourcing, service delivery, TUPE, exit, costs). Even if some things are already in place, include these as ‘completed items’ to show you’ve considered them.

6. Provide evidence

The MOD will want to be absolutely certain that you have the skills and experience necessary to provide the service requested. Wherever possible, include facts and figures from where you have successfully delivered similar services to other customers in the past. To provide the additional assurances needed, use case histories and testimonials for the different types of defence services requested with information on mobilisation, resourcing (including vehicles where applicable), timescales, communication, and or course the results/outcomes. Focus on what the outcomes were for your customer, what benefits did they achieve through your service delivery?

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Key considerations on writing Defence Tenders

1. Register with Defence Contracts Online (DCO)

The Defence Contracts Online portal is more than just the official central noticeboard where all MOD tenders (with a value over £10,000) are published. There is a wealth of information on the portal about tendering for MOD contracts, and it is also the means via which all defence tenders are submitted.

2. Cyber Essentials certification

If you don’t already have Cyber Essentials certification and want to start tendering for MOD contracts, you need to start working towards it. MOD policy for contracts that include the transfer of MOD identifiable information is that suppliers should possess Cyber Essentials certification before contract award. At the very least, you will need to show evidence of your progress towards Cyber Essentials certification in time for the contract start date, so get this in place as soon as possible.

3. Use MOD language

Ensuring you use the correct MOD terminology, acronyms and abbreviations in your response will help demonstrate that you have a thorough understanding of the tender requirements. Use the MOD’s glossary of terms to help you. Understand their motivations behind the tender and align your response accordingly.

4. Innovation

As mentioned earlier, the MOD has a huge focus on innovation. This will be a key differentiator so you need to show evidence of how you can implement new capabilities quickly and how your innovative methods have been used to provide a faster service, saved your other customers money or time, or delivered better quality and value. The MOD is looking for suppliers to deliver over and above the specified services so they can deliver a better service for their own customers/users. As an SME, really focus on how being a smaller, more flexible company gives you a huge advantage over the larger corporates when it comes to innovation.

5. Have robust compliance mechanisms with strong policies and procedures

The highest scoring tender responses will demonstrate extremely robust compliance policies and procedures, along with appropriate quality assurance and governance systems and clear accountability throughout the organisation. The MOD want to be confident that the work on their behalf will be carried out to the highest standards with minimum risk to employees and the general public. Therefore, at every appropriate opportunity, provide the evidence that the MOD commissioners are looking for to demonstrate and assure them of your compliance performance. Use management information reports, log books, audits and use of technology (e.g. auto-flagging) as evidence to show you have fool proof systems in place that work.

6. Check how the tender is structured

Check how the tender is structured. Is the tender split into different lots or are all products and services grouped together? If the latter, be sure you can deliver all the requirements. This is a good opportunity to demonstrate to the MOD how you will achieve excellent volume efficiencies. If they award the whole contract to you, how much will they save? Can you offer some added value incentives? Correspondingly, if you’re bidding for an individual lot, how will your business deliver better value than a bigger multi-disciplinary company?

7. Clear pricing

Be very clear on your pricing when submitting defence tenders. You need to make sure all assumptions are clearly stated (e.g. timescales or resources), and it is clear what is (and isn’t) included in the price (e.g. maintenance, installation, repair etc). The pricing of the tender will have varying degrees of influence over how your tender is scored, depending on the weighting. Sometimes the pricing element of a defence tender can be as much as 80%, but more likely between 60 – 40%. Get an understanding of your competitors’ pricing if you can; do your own benchmarking exercises. The MOD won’t necessarily go for the cheapest product/service, but if there are very similar bids in terms of the offering, price is likely to be key. You may want to offer discounts or innovative ideas for delivering long-term value that your competitors won’t have thought of.