Small Businesses “Overlooked” for Defence Contracts

The global defence and security industry: why small businesses matterA new report out from the Federation of Small Businesses (FSB) has highlighted the difficulties faced by UK small firms in acquiring work with the Ministry of Defence (MoD).

The report, The global defence and security industry: why small businesses matter, says that small businesses are at a "significant disadvantage" in the procurement process and urges for changes to the current system.

The most telling fact in the report is that whilst there are 9,000 small firms in the defence sector, 90% of defence export contracts go to the UK’s 20 largest companies. The FSB wants the Government to play a greater part in facilitating access for small firms to the defence export market.

John Walker, National Chairman of the Federation of Small Businesses, said:

“The Government has put the private sector and exporting at the heart of its plans for economic recovery. With the UK being the second largest defence exporter in the world, and with 9,000 small businesses operating in this sector in the UK alone, facilitating small business access to this sector should be top of the Government’s agenda.”

The FSB report has set out a number of solutions to redress the balance, with their recommendations being:

  • Participation of small business at the "top table" with membership to the Defence Industries Council (DIC) being open to small business representatives or the setting up of a dedicated small business communication channel to the the MoD.
  • The creation of a UK Trade & Investment Defence & Security Organisation (UKTI DSO) to allow small businesses access to the domestic market where a UKTI DSO currently exists for export.
  • Closer cooperation between small business and defence organisations, chiefly between the FSB and UKTI DSO.
  • Better communication within government so that departments are aware of an improved UKTI DSO and the specialist small businesses that help with or fulfill contracts.

John Walker added:

“This report will form the basis of the FSB’s response to the MoD’s consultation on their recently launched Green Paper entitled, Equipment, support and technology for UK defence and security.”

For full details see the FSB report The global defence and security industry: why small businesses matter (PDF) and the MoD’s green paper Equipment, Support and Technology for UK Defence and Security: A Consultation Paper.

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