Report reveals defence sector contract numbers continue to rise

June 29, 2020

Figures from BIP Solutions’ Market Update have revealed that the number of defence contracts awarded continues to increase.

The latest figures from BIP Solutions weekly Market Update show that the defence sector continues to grow as we emerge from the COVID-19 lockdown.

Over the next decade the Ministry of Defence is committed to spending over £186 billion on equipment and support. Defence has a major role to play in delivering the Government’s growth and enterprise agenda – the MOD accounts for over 40% of all central government spend with industry and its procurement activity includes some of the most complex and technologically advanced projects in the world.

This week the defence sector in the UK and Republic of Ireland published a total of 61 contract notices, nine (17.31%) more than the previous week, continuing a gradual upward trend in contract notice volumes for the sector over the last few weeks.

Of the 49 distinct contract notices analysed, 19 were OJEU and 30 non-OJEU. This proportion of non-OJEU contract notices illustrates not only the value range of defence spending but the importance of using business intelligence solutions, such as DCI, to track all relevant defence sector contracts. While the defence sector is traditionally perceived as purchasing weaponry, military equipment and construction works, this week’s contract notices show its range of non-military requirements, with opportunities for providers of live streaming services, cloud integration services, CCTV, kilts, repair and maintenance of water meters and smoking cessation services, to name but a few.

Opportunities such as these mean that the sector is a potential customer for businesses, including SMEs, in a wide variety of sectors. The highest value contract notice published this week in the defence sector was worth £615 million. Issued by MOD Information Systems and Services, the notice seeks system integration services as part of Project MORPHEUS, the programme delivering the next generation of tactical communications systems to the UK Armed Forces.

The total stated value of the contract notices issued by the defence sector this week was just over £801 million, a rise of 409.39% on the previous week’s £157.26 million. However, this difference can, as is frequently the case, be accounted for by the most valuable contract notices: as mentioned above, this week’s highest value notice was worth £615 million, whereas last week’s was worth £80 million.

Defence procurement spending is now consistently over £100 million a week, meaning that the sector continues to offer a range of opportunities both to traditional defence suppliers and to innovative businesses from a variety of industry sectors. In addition, only 27 of the 49 distinct notices (55.1%) issued by defence buyers this week stated a value, which means that the actual total weekly procurement spend must be considerably higher.

The UK defence sector can be challenging to do business with, owing to the complexity of the MOD’s structure. This means that those seeking to gain business traction in this sector can struggle to find their way into the marketplace or contact the right person – though once engaged, the MOD can be a long-term and consistent customer.

BIP Solutions’ defence contacts database contains over 940 contacts and is continually updated and amended, further demonstrating the Company as a trusted data provider. The database also enables drill-down into 18 MOD agencies, including high spending areas such as the Defence Infrastructure Organisation (DIO) and Defence Equipment and Support (DE&S).

The full report can viewed here.

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BIP Solutions Defence Market report