The annual Defence Procurement, Research, Technology & Exportability (DPRTE) event, organised by BiP Solutions, sees the defence and security industry come together to allow SMEs to discover their place in the UK’s £20 billion defence marketplace.
This year, due to the impact of COVID-19, the event moved to a virtual platform to become DPRTE Engage Online 2020.
From the event, it was clear that the opportunities available in the defence marketplace are significant, and that improving engagement with the supply chain and driving innovation would continue to be key themes for the defence industry.
In a first for DPRTE, the Defence Infrastructure Organisation (DIO) hosted the Infrastructure and Estates Pavilion. This allowed both buyers and suppliers to connect with key DIO personnel and gain an insight into the new strategy, including the latest initiatives, developments and opportunities within defence infrastructure.
With an annual spend of around £3 billion on construction and infrastructure services on behalf of its customers, DIO represents a significant opportunity for both current and potential suppliers.
DIO has been undergoing a commercial transformation as it recognises that more needs to be done to enable suppliers of all sizes to benefit from the opportunity it offers. At the heart of this is making it easier for suppliers to work with DIO.
Speaking at DPRTE Engage, DIO’s new Commercial Director, Nick Wilkinson, explained: “What we have seen at this two-year point in the transformation is some significant forward momentum.
“We regularly talk to our supply chain to get feedback and it has been positive. It has helped us to focus on areas that we need to really keep working on but it is also saying we are feeling things differently.”
It is envisaged that making it easier for suppliers to work with DIO will result in an increase in the number of suppliers to defence – creating a wider and deeper economic impact both nationally and regionally.
Last year saw DIO release its Procurement Plan – marking the first time the organisation has outlined its priorities to existing and potential suppliers. The Plan explains how suppliers can navigate the procurement and approvals processes, and what DIO will be buying on behalf of its customers in the coming years.
This includes work to construct new buildings, such as housing and accommodation, and the refurbishment of current facilities as well as services such as catering, waste management and cleaning. Supporting SMEs is integral to the MOD’s goal to meet its target that 25% of procurement spend should go directly and indirectly to SMEs by 2022.
Speaking at DPRTE Engage, the Defence Procurement Minister, Jeremy Quin, said that the MOD spend with SMEs has risen to 19.3% in the past year. By making DIO easier to do business with, it is envisaged that this percentage will continue to increase. Approximately 75% of DIO’s Hard Facilities Management spend, which includes support services (estate reporting), management services (waste, sustainability and defect), housing management, and training estate management, already achieves the 25% SME target. It is expected this trend will continue in order to further diversify the supply base and increase resilience.
By listing all the organisation’s major projects and contracts, the DIO Procurement Plan makes it easier for existing and potential suppliers to plan ahead by offering advice on bidding for this work and greater transparency about working with the MOD. These measures will particularly help small businesses, which don’t necessarily have the skills and prior experience of working with the MOD in such areas.
Opportunities outlined in the Procurement Plan include the £1.8 billion Army Basing Programme, the £3.5 billion Defence Estate Optimisation Programme and the £1.6 billion Clyde Infrastructure Programme.
Mr Wilkinson said: “One of the frustrations of all this is that you can’t change the defence estate overnight but absolutely what you should be doing is starting the journey and picking the most high impact programmes to start making that change and making it fast.
“The Defence Estates Optimisation Programme will fundamentally change the face of the defence estate over the coming 20 years or so. The estate dates back many years and we need to make sure that that state is fit for both what we need it to do now and what we needed to do 20, 30, 40 years into the future. It really is turning around the proverbial super tanker.
“The great thing about that programme is that it generates income from sites that we no longer need in in the modern estate format for defence and reinvests it elsewhere in the estate to allow us to build state-of-the-art facilities in in various locations around the country to enable us to deliver very high end training living and working establishments.
For example, with the Catterick area in North Yorkshire, there isn’t awful lot of work going on in that site and we’ve been able to reinvest money from around our estate back into a place like Catterick to really make it a centre of excellence for training.”
DIO’s pipeline of work covers a wide range of sectors and there are opportunities for almost all types of businesses in the UK – including SMEs.
While the Major infrastructure Programmes have a focus on construction, Mr Wilkinson is keen to reinforce the maintenance aspect of the Defence Estate.
“The other huge part of DIO is maintaining the estate once we have built things. The Hard Facilities Management and Soft Facilities Management contracts are massive and some of the biggest in Europe.
He highlighted the Future Defence Infrastructure Services (FDIS) as a fantastic opportunity for suppliers that demonstrated some of the key strides made by the DIO through its commercial transformation journey.
“It is basically all our hard FM work for the whole of the UK – the whole of our estate and associated housing management services and also some work on our training estate.
The whole of the FDIS estate is in the billions and its out to bid now and we’re working very hard on that.”
Prior to DPRTE Engage, DIO released its new strategy outlining the organisation’s long-term vision for the organisation. This new strategy – the DIO Strategy 2020- 2030 – sets out the long-term vision for the organisation. Its aim is to see DIO working with agility and pace to deliver a Defence Estate of the right size, location, and quality that is fit for the future. The Strategy has six strategic recommendations across the three strategic objectives of ‘Outstanding Delivery, Excellent Advice, One Team’.
These strategic recommendations have been developed to grow the organisation beyond the Future DIO’s transformation programme, which was launched in 2016 and provided a platform for the organisation to modernise and transform.
It is envisaged the new recommendations will increase DIO’s focus on its capability to increase customer value and improve organisational performance.
Mr Wilkinson explains: “We are focusing on landing a number of things over the next year, year and a half, which will make a huge difference to us as a team.
“We think we have changed a lot culturally and behaviourally, but we are also landing some very specific projects right now which we believe will make a tangible difference as we continue our journey.”
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