The UK Ministry of Defence (MoD) has announced a series of measures that will decrease the bureaucratic burden for small and medium sized enterprises (SMEs) and enable them to work and easily collaborate with the government.
The policy is designed to meet the MoD’s target of at least 25% of both direct and indirect procurement spending with SME firms by 2020.
The MoD states that in the period of 2014-15, 19.2% of procurement spending was with SMEs, resulting in a total spend of £3.8bn.
The ministry has predicted that they will need to increase overall spending to £4.9bn, or by 29%, in order to achieve its 2020 target.
Philip Dunne, minister of state for defence procurement, stated:
“We spend £4bn a year with small firms, and this new policy is a signal of our intent to do more to tap into the innovation of SMEs in our supply chain.”
The policy aims to provide single points of contacts for suppliers as well as to reduce “red tape” or excessive bureaucracy in the defence sector, within the first six months of 2016.
A statement released by the MoD highlighted that they are exploring ways of simplifying their procurement processes, for example by investigating the use of purchase order templates for the simplest low value and low volume contracts.
The changes also aim to introduce a new tool for suppliers which will direct and instruct them how to obtain target funding for certain opportunities with the government.
The announcement links to the MoD’s wider goals of encouraging firms to innovate more easily in the defence supply chain. The changes further stem from the MoD’s commitment to enhance and drive competition in the defence supply chain and ensure that all procurement within the sector is obtained at cost-effective prices.
These policy changes follow a call by the National Audit Office (NAO), for the UK government to do more to procure with small businesses.
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