Assessing the economic and financial standing of bidders under the DSPCR

Central government has recently come under criticism following the collapse of Carillion in January 2018. The criticism is related to the award of large public contracts to the company despite its publication of a profit warning in July 2018. In light of this criticism, Emily Powell, partner at top 100 law firm Hugh James, asks to what extent can contracting authorities exclude companies from the tendering process following profit warnings? 

In the UK, the award of contracts by public bodies is governed by a range of procurement regulations. Most contracts awarded by the Ministry of Defence will be governed by the Defence and Security Public Contracts Regulations 2011 (DSPCR). The DSPCR sets out several conditions that may be imposed on those bidding for public contracts in the defence sector. These include minimum requirements for the economic and financial standing of bidders and grounds for excluding bidders from competitions.  

The grounds for exclusion of bidders are found at regulation 23 DSPCR and should be familiar to those awarding public contracts in defence. These include a discretion to exclude any bidder which has 

passed a resolution or is the subject of an order by the court for the company’s winding up otherwise than for the purpose of bona fide reconstruction or amalgamation, or has had a receiver, manager or administrator on behalf of a creditor appointed in respect of the company’s business or any part of the company’s business or is the subject of the above procedures or is the subject of similar procedures under the law of any other State 

Therefore, formal steps must be taken before a discretion to exclude a bidder can arise. This would not assist a contracting authority in a situation such as Carillion  where a profit warning is issued or there are rumours that a company is in difficulty.  

While the exclusion criteria may not offer a contracting authority the tools to avoid a Carillion-type situation, selection criteria may be used to impose minimum requirements upon bidders. Requirements for the use of selection criteria relating to the economic and financial standing of a bidder are found at regulation 24 DSPCR. This regulation sets out that in assessing the economic and financial standing of a bidder, a contracting authority may take into account: 

(a)appropriate statements from the economic operator’s bankers or where appropriate, evidence of relevant professional risk indemnity insurance; 

(b)statements of accounts or extracts from those accounts relating to the business of the economic operator where publication of the statement is required under the law of the Member State in which the economic operator is established; and 

(c)where appropriate, a statement, covering the three previous financial years of the economic operator, of— 

(i)the overall turnover of the business of the economic operator; and 

(ii)where appropriate, the turnover in respect of the work, works, goods or services which are of a similar type to the subject matter of the contract 

or, where this information is not appropriate “other information to demonstrate the economic operator’s economic and financial standing”. 

It can be seen that on the basis of the DSPCR, contracting authorities have a margin of discretion in determining the information they require to demonstrate the economic and financial standing of a bidder. Any bidder not meeting the published requirements for a specific contract may not be awarded that contract. Therefore, selection criteria which would identify a Carillion-type situation may operate to prevent the award of a contract to a company in financial difficulty 

While the DSPCR affords a margin of discretion in the application of the selection criteria, the Cabinet Office mandates the use of its standard selection questionnaire (SSQ) for all contracting authorities in England, plus those in Wales and Northern Ireland exercising wholly or mainly reserved functions. This SSQ at Part Three contains standard questions for the establishment of the economic and financial standing of bidders. These questions cover: 

  1. the bidder’s previous two years accounts; or if these are not available, one of the following: 
  2. Statement of Turnover, Profit and Loss Account/Income Statement, Balance Sheet/Statement of Financial Position and Statement of Cash Flow for the most recent year of trading; or 
  3. a statement of the cash flow forecast for the current year and a bank letter outlining the current cash and credit position; 
  4. any alternative means of demonstrating a bidder’s financial status if any of the above are not available; and 
  5. any specified minimum level of economic and financial standing.  

In addition, where a bidder has indicated that it is part of a wider group, the bidder is asked to confirm whether it can provide parent company accounts and a parent company or bank guarantee. 

It is important to note, however, that these questions drive a contracting authority towards an assessment of a bidder’s historical financial data, which is not necessarily a good indication of a bidder’s current economic and financial position. Nonetheless, the Cabinet Office has indicated1 that it expects contracting authorities not to deviate from the questions set out in Part Three of the SSQ; and where any deviations are made, these must be reported to the Crown Commercial Service Mystery Shopper scheme. While this may help bidders that are participating in multiple competitions, it is perhaps less helpful for contracting authorities, particularly those awarding highvalue or longterm contracts  common in the defence sector  

To avoid awarding contracts to a bidder in a Carillion-type situation, it is imperative that contracting authorities give careful consideration to the appropriate selection questions at the outset of a procurement. These questions need to ensure that the contracting authority is able to assess a bidder’s current and not historical financial situation. Suitably experienced staff, with the use of specialist expertiseshould be used and contracting authorities should not shy away from deviating from the SSQ to conduct a suitable and proportionate financial assessment of bidders. Finally, contracting authorities are entitled to require uptodate information prior to contract award; and in lengthy procurement exercises, it is advisable for contracting authorities to ensure that a winning bidder’s economic and financial standing continues to meet the selection criteria before contract award.  

image © Crown Copyright

For more information on Hugh James, visit www.hughjames.com  

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Get ready for DPRTE 2019 and join the defence discussion

Anticipation is building for DPRTE 2019 ahead of the UK’s premier defence procurement event of the year, taking place at Farnborough International Exhibition & Conference Centre on 28 March. 

Defence Procurement, Research, Technology & Exportability (DPRTE) 2019 will bring together buyers, suppliers and defence thought leaders in an engaging environment where they can network and discuss the latest market developments and opportunities. 

The Ministry of Defence, DE&S, Dstl, DASA and ISS are just some of the defence organisations that will be sharing their business opportunities and insights. 

Attendees will have access to the DPRTE Product Showcase Exhibition (featuring over 100 suppliers), Live Keynote Arena, five Knowledge Transfer Zones and seven Networking and Collaboration Zones. 

Live Keynote Arena 

The DPRTE 2019 Live Keynote Arena will host a range of the leading and most influential speakers from across the defence procurement and supply chain marketplace. 

Attendees will have an invaluable opportunity to hear directly from those personnel who are actively engaged in both setting and delivering the direction of the UK’s defence procurement and supply chain strategy.  

Chairing the Live Keynote Arena again this year will be Commercial Strategies Ltd CEO and former Ministry of Defence Commercial Director Les Mosco. 

Stuart Andrew MP, Minister for Defence Procurement; Jim Carter, Commercial Director, Supply Chain at the MOD; and Lucy Mason, Head of the Defence and Security Accelerator (DASA), will deliver keynote addresses alongside Professor Trevor Taylor, Professorial Research Fellow in Defence Management at the Royal United Services Institute (RUSI) and Tracy Buckingham, Head of Operations and Security Exports at the Department for International Trade’s Defence & Security Organisation (DIT DSO). 

Ant Middleton, best known for his role as Chief Instructor on hit TV show ‘SAS: Who Dares Wins’, will bring proceedings to a close with a session on leadership and teambuilding. 

Technology & Innovation Knowledge Transfer Zone 

The Technology & Innovation Knowledge Transfer Zone will host a series of training sessions aimed at providing participants with an insight into the latest developments and opportunities within this area. These sessions will encourage a greater level of collaboration with industry, academia and allies, in order to target new providers to boost the competitive advantage of UK defence and find answers to the most pressing national security questions from across sectors. 

Sessions will include Andrew Cunningham, Executive Director – Innovation at the UK Defence Solutions Centre (UKDSC), take on ‘Cross Sector Innovation From a Defence Perspective’. 

Peter Marshall, Professional Services Director at Commerce Decisions, will give a session titled ‘There’s a Lot More to Evaluation Than Meets the Eye’. This will be followed by Phil Blunden, Communications Manager at the Defence Cyber Protection Partnership (DCPP), with ‘Defence Contracting – How Suppliers Are Required to Protect MOD Electronic Data’. 

The zone will also host a session from Cyber Essentials Marketing Executive Megan McGinty on gaining a competitive advantage through Cyber Essentials. 

Supply Chain & Partnering Knowledge Transfer Zone 

The Supply Chain & Partnering Knowledge Transfer Zone will provide attendees with the chance to hear directly from prime contracting and supporting organisations such as Airbus, Boeing and DxC Technology as to how they can engage and actively pursue new business development opportunities across the wider supply chain. 

In the MOD report ‘Industry for Defence and a Prosperous Britain: Refreshing Defence Industrial Policy’, current Defence Secretary Gavin Williamson confirmed that the MOD would continue to spend with SMEs. The report states that the goal is to place 25% of direct and indirect defence procurement spend with SMEs by 2020, compared with the 18.1% total in 2015/16. 

Also appearing within the Supply Chain & Partnering zone at DPRTE 2019 will be Defence Contracts International (DCI) Marketing Manager David Young, who will talk about ‘Accessing International Opportunities’; the Crown Commercial Service and the Defence Infrastructure Organisation (DIO) will also collaborate to deliver a session while Jon White, Sales Director Europe at GE Aviation, will discuss ‘Supply Chain Opportunities With GE Aviation’. 

Export & Business Growth Knowledge Transfer Zone 

Supported by the Department for International Trade, the Export & Business Growth Knowledge Transfer Zone will provide exhibitors and visitors with specialist export advice and practical assistance, enabled through DIT’s Defence & Security Organisation and its close working relationship with the MOD and the Export Control Organisation (ECO). 

Delegates have the opportunity to visit the DIT DSO stand to meet civilian and military advisers and to attend a number of seminar sessions aimed at the UK SME defence and security community. 

The zone launches with Team Leader Small Business Unit at DIT DSO, Tim Clewes, presenting on ‘DIT DSO Support for SMEs’.  

Training continues with sessions from other DIT DSO experts on areas such as ‘Military Support for Defence and Security Exports’, ‘DIT DSO Media Support and Opportunities’ and ‘Security Exports’. 

Andrew Cunningham, Executive Director – Innovation at UKDSC, will round things off with a discussion on support for UK SMEs. 

Buyer Excellence in Procurement Knowledge Transfer Zone 

In addition to accessing a wealth of industry expertise, DPRTE attendees can also visit the Buyer Excellence in Procurement Knowledge Transfer Zone, where Principal PASS Consultant Eddie Regan will be leading on procurement best practice and advice, which defence buyers can utilise to enhance the efficiency and effectiveness of their procurement exercises. 

These sessions will cover topics such as ‘Developing Your Business Case’, ‘Planning Your Exit Strategy’, ‘Effective Evaluation’, ‘Managing Change in Your Contract’, ‘Market Engagement Benefits’, ‘Developing a Risk Strategy’ and ‘Commercial Awareness’.  

Doing Business with the US DoD Zone 

The US defence market is the largest in the world, with a proposed defence procurement budget of over $686 billion for the forthcoming financial year. 

The United States Department of Defense’s (DoD) enduring mission is to provide combat-credible military forces needed to deter war and protect the security of the nation. Its National Defense Strategy acknowledges an increasingly complex global security environment, characterised by overt challenges to the free and open international order. 

Representatives from the US DoD will be on hand to provide advice and guidance on how to access the wealth of opportunities available within the world’s largest defence procurement marketplace, through a range of training sessions and one-to-one meetings. 

Defence Procurement Pavilion 

The Defence Procurement Pavilion, one of DPRTE’s Networking and Collaboration Zones, will provide visitors with an unrivalled opportunity to engage directly with key defence procurement organisations such as DE&S, DIO, FLC Army/Air/Navy, the Submarine Delivery Agency, ISS and Doing Business with Defence. 

For MOD and wider public sector personnel engaged within procurement, the Pavilion will bring together these key organisations, offering a unique networking opportunity.  

In addition, the Pavilion offers the chance to share and explore the ideas and best practices that are actively supporting and developing current objectives and initiatives. 

To be at the forefront of the discussions by attending, sponsoring or exhibiting at DPRTE 2019, book now at www.dprte.co.uk/book-now

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Common Support Model (Land) – Briefing Note

The Common Support Model (Land) programme has been jointly initiated by Director Support in Army HQ (Maj Gen Gaunt) and Director Land Equipment in DE&S (Maj Gen McClean) with the high-level intent of making clear ‘who does what and how’ across the support landscape (for land vehicles and weapon systems). In simple terms, the CSM(L) aims to codify the roles, responsibilities, and authorities of those involved in the ‘support’ business across the Army, DE&S and industry landscape. The programme will bring focus to what really matters across the support enterprise and will recommend immediate and longer-term change in an integrated and coherent manner. It will be fully aligned to the Defence Support Network (Transformation) Defence Support Operating Model and the DE&S Common Support Framework.

Director Support and Director Land Equipment joint vision for CSM(L) – “The Common Support Model (Land) will be an integrated, useable and clearly articulated operating model for Land platforms that will improve support across the operator-industry spectrum while delivering better VfM through life.”

A team has been appointed to conduct this work that will comprise of military, civil servants and contractors and will be led by Col Ian Gibson in the Army HQ and Col (for Brig) Anna-Lee Reilly in the DE&S. This team is energised to make rapid progress and will need to engage with a wide range of stakeholders to understand how we currently do business, capture it properly and then make recommendations for how to do it better.

For more information about the Common Support Model (Land) programme, including information on events you are able to get involved with, please email DESLE-HQ-MIT-Mailbox@mod.gov.uk

Saab takes sensor technology to bold new heights

In this article defence features writer Robert Atherton speaks exclusively to Saab about the evolution of radar, the company’s 21st century sensor tech and the critical importance of the UK marketplace.

All too often the name of the long-established Swedish defence and security company, Saab, is associated foremost with its former automotive spin-off, and not without reason – the car business is still looked back on as one of the world’s most recognisable brands. But if you’re at all familiar with the defence and security sector you will know that the company’s enduring presence is as a long-standing pillar of the defence industry, having pioneered state-of-the-art sensor technology over the past 60 years.

Saab first took shape in 1937, and has served the defence and security sector ever since – initially as a manufacturer of military aircraft for the Swedish Air Force. Today, that remit has broadened significantly, with a full spectrum offer and a 16,000-strong workforce. Saab now operates across the globe, boasting an annual turnover of around SEK 31 billion, of which around 23% is reinvested into various R&D initiatives each year. Crucially, this pattern of continued reinvestment has enabled Saab to make major surveillance inroads, specifically around state-of-the-art sensor technology.

Sea Giraffe on a Visby Corvette

It’s here that the company has established itself as a world leader, with diverse sensor capabilities that span the land, sea and air domains. What’s interesting, however, is that this expertise has been shaped by the complexities of the Swedish coastline and the Baltic littorals that historically made navigation an uneasy prospect. It’s an ingenuity born of actual need, and it has driven Saab to carve out an innovative range of sensor-related technology.

Undoubtedly, innovation is essential in the sensor space. If commanders are to react and respond to threats in real time, sensor technology must keep pace with the cutting edge. And so, through new approaches, Saab hopes to hand back the reins to the commanders themselves, affording them greater latitude when time and space are in short supply. Here, adaptability is key; with recent innovations enhancing the range, accuracy and mobility of land sensors in response to a noticeable rise in manoeuvre warfare.

“At Saab we exploit our technology across multiple domains which allows us to transfer lessons learned from any one product or environment into all our products very quickly,” said Andy Thomson, Saab’s UK Director of Land Surveillance Marketing and Sales.

But what should commanders expect from a 21st century radar system? Chiefly, that it’s multifunctional. It is no longer enough to have siloed land, sea and air surveillance. Cutting-edge technology allows all three to be integrated, and today’s commanders expect nothing less. Here, Saab’s use of innovative AESA (Active Electronically Scanned Array) technology has allowed the business to boost the flexibility of its sensor tech and integrate key software upgrades to enable clients to take the initiative when new threats emerge.

“We’re very familiar with open architectures and interoperability,” continued Thomson. “We have consistently demonstrated our ability to integrate our sensors into other people’s systems, and from a UK perspective we have an established track record integrating our sensors into existing and future UK-based weapon and C2 systems.”

GlobalEye

Chief among Saab’s surveillance offering is GlobalEye, an iteration of the Erieye radar system, which has found widespread success in the Airborne Early Warning and Control (AEW&C) marketplace. GlobalEye is something of a two-hander. It pairs the powerful Erieye extended range radar with the modified ultra-long range Global 6000 jet aircraft from Bombardier, delivering a single centralised solution for air, maritime and ground surveillance in the process.

According to Matthew Smith, UK Director Airborne Surveillance Marketing and Sales at Saab: “With Erieye ER (extended range), the goal is to detect everything from very slow, even stationary targets such as hovering helicopters, right the way through to extremely high-speed hypersonic, dynamic targets – both close-up and a long way away. It really is a quite demanding set of requirements.”

But for Erieye ER to fully meet the needs, both present and future, of the defence community, a comprehensive programme of research and development would first be required: “We arrived at Erieye ER following a ten-year R&D initiative,” added Smith, “to ensure we understood how the threat was evolving, where the market was going, and the kinds of capabilities our customers would require in the future.”

Thus, Erieye ER is a true multi-role system – one able to occupy either dedicated or combined roles, with the ability to instantly switch between them should the need arise. GlobalEye is flying today, with the latest Erieye ER radar and associated mission equipment; this brings the number of aircraft types equipped with Erieye sensors to five, and the number of nations to eight – further proof of the system’s interoperability.

Arthur/MAMBA

Known as MAMBA in the UK, Saab’s weapon locating system ‘Arthur’ is another innovation in the sensor space. It is able to detect ballistic trajectories such as rockets, artillery and mortars, and calculate the firing site and point of impact – enabling effective counter-fire within seconds. In addition to the UK, Arthur has found widespread use across 12 separate militaries – among them Norway, Sweden, the Czech Republic, South Korea, Spain, Italy and Greece.

Meanwhile, the Giraffe Agile Multi Beam (AMB) 3D surveillance radar has proven a hugely popular land-based air defence solution. Generating a real-time, 360-degree panorama of the surrounding airspace, Giraffe AMB is able to track incoming aircraft, missiles, rockets and drones on a highly mobile platform. Its lofty mast, which rises higher than any other radar of similar class, allows the system to survey distances of up to 120 kilometres. Crucially, this technology has helped save countless lives, providing early warning against incoming threats during international operations.

Clearly, the Ministry of Defence has taken notice. Having recently acquired its tenth Giraffe AMB from Saab, the UK has become the single biggest operator of land-based Giraffe AMB radars in the world today. In fact, the Giraffe AMB surveillance radar system is poised to play a pivotal role in the UK’s new ground-based air defence (GBAD) Sky Sabre system, while also providing air target tracking to the Land Ceptor air defence platform – as demonstrated at a recent weapons test in the north of Sweden. And to illustrate the cross-domain nature of the Saab range, over 65 systems from the maritime version (the Sea Giraffe AMB) are in use with 11 different navies including the US, Australia, Canada and Singapore.

According to an MOD spokesperson: “The Giraffe radar system provides our military with unmatched surveillance capabilities, keeping the UK safe and protecting our troops on operations. Giraffe provides our cutting-edge Sky Sabre air defence system with crucial battlefield intelligence, so it is brilliant to see our defensive strength bolstered by the arrival of the tenth radar system.”

For Saab, Giraffe AMB sits at the centre of a wider family of surface radars which collectively offer a multitude of land and sea solutions for ground-based air defence and surveillance.

Giraffe 1X

Weighing less than 150 kilograms, the lightweight Giraffe 1X is the company’s newest member of the Giraffe family. Named ‘X’ to denote its X-band radar characteristics and designed with mobility in mind, the G1X can be integrated onto any platform, irrespective of size. Furthermore, its compactness means that it can easily be relocated by means of manpower alone – from a vehicle to the rooftop of a building, for example – making it ideally suited to the rapidly changing pace of mobile forces.

Similarly, the Giraffe 4A is a fully multifunctional radar which blends capabilities of the Arthur and Giraffe AMB with an all-new AESA-inspired radar sensor. Crucially, this new radar offers unparalleled range, performance and operational flexibility in a single solution. And in the maritime domain, the Sea Giraffe AMB applies that same methodology to open water in an effort to safeguard ships and secure superiority at sea; indeed, the solution can now be found across five classes of US Navy ships.

In many cases, the UK seems to be an early adopter of Saab technology. And given that 23% of the Giraffe AMB’s content comes from the UK, Saab has a vested interest in supporting British business. The company’s Gripen fighter jet, which derives 37% of its value from the UK supply chain, has the potential to generate £2-3 billion in economic benefit and a further 5000-6000 British jobs over the next decade. As the company continues its expansion, the UK is increasingly seen as a home market – so much so that a state-of-the-art UK-based Innovation Centre is now in the works.

“Saab is actively seeking to expand its manufacturing and export base here in Britain,” concluded Saab UK’s Head, Andrew Walton. “We see the UK as a strategically critical customer because of the global renown of British Armed Forces and we want them using our products.”

“The UK is absolutely a Tier 1 customer,” Walton continued. “Saab has a long-established history with the Royal Air Force dating back 40 years, during which we have developed systems for the Harrier, Tornado and Typhoon. The performance and technology requirements across the Services, together with the high standards we place on ourselves, means we’re very much looking to leverage our experience to become an even more trusted supplier of advanced technology to the UK.”

To find out more about Saab’s sensor technology, visit: www.saab.com

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The next giant leap: The UK launches its space ambitions

The UK is looking to capitalise on its worldleading expertise in aerospace with the development of vertical and horizontal spaceports, taking one giant leap into next phase of space travel. 

The UK Space Agency selected Sutherland on the north coast of Scotland as the first vertical launch site. 

An initial £2.5 million will go to Highlands and Islands Enterprise to develop the vertical launch site in Sutherland, which will use a combination of proven and innovative rocket technologies to pave the way for a world-leading spaceflight market. 

However, new horizontal launch sites have significant potential in a future UK spaceflight market, which it is anticipated could attract companies from all over the world to invest in Britain.  

These horizontal launch sites will host runways that will support space planes capable of carrying satellites and tourists and will be located in Cornwall, Glasgow and North Wales. The sites will be boosted by a new £2 million horizontal spaceport development fund to grow their sub-orbital flight, satellite launch and spaceplane ambitions. 

The UK’s thriving space industry, research community and aerospace supply chain also put the UK in a strong position to further develop horizontal launch sites. The Government’s decision to make available a £2 million strategic development fund, should also help accelerate this early-stage market further. 

It is envisaged that small-satellite launch and sub-orbital flight from the UK will support organisations across the country to remain at the forefront of commercial space services, driving new highly skilled jobs and boost local economies – not only in the communities around spaceport sites, but in the UK’s space sector as a whole. 

Business Secretary Greg Clark explained: “As a nation of innovators and entrepreneurs, we want Britain to be the first place in mainland Europe to launch satellites as part of our Industrial Strategy. The UK’s thriving space industry, research community and aerospace supply chain put the UK in a leading position to develop both vertical and horizontal launch sites. 

“This will build on our global reputation for manufacturing small satellites and help the whole country capitalise on the huge potential of the commercial space age.” 

The first launch at Malness spaceport is set to take place in 2023, with a team led by Lockheed Martin set to deliver six cubesats tasked with assisting weather monitoring projects. 

The move is a clear endorsement of commercial spaceflight, said to be worth £3.8 billion to the UK economy over the coming decade, with the potential to usher in a new era of space travel. However, the possibilities for military use have stirred the interest of the defence industry.  

Speaking at a briefing at this year’s Farnborough Airshow, Air Vice-Marshal Simon Rochelle, Chief of Staff for Capability and Force Development with the Royal Air Force spoke of his hopes that responsive military launches would soon be a possibility. 

Although the process is still early in its development, the ability to deliver emergency supplies via a small satellite and restock them within 72 hours would be of significant strategic value. 

Given the collaborative nature of manufacturing and procuring within the defence industry, there also exists the further potential to open up the spaceport to the UK’s military allies. 

Rochelle explains: “We go and buy airplanes together; we can buy AWACS together; think of federated capability; think of how partners work symbiotically with each other. 

“The more we – Five-Eyes and allies – can respond effectively, or even offer deterrence, dissuasion, we may actually control that space domain rather than being threatened or outmanoeuvred in the space domain.”

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Vehicle hire companies to reduce terrorism risk

Counter Terrorism Policing has teamed up with The Department for Transport to reduce the risk of rental vehicles being used as weapons in acts of terror.

The Rental Vehicle Security Scheme (RVSS) is voluntary and is open to all UK hire firms who offer long and short-term rentals to consumers.

RVSS requires participating companies to meet a set of requirements included in a 10-point Code of Practice, which includes a commitment to:

  • Lawfully share data and information with law enforcement
  • Train staff to identify and report suspicious behaviour
  • Appoint a recognised security contact
  • Only accept electronic payment for all or part of the transaction

Counter Terrorism Policing, National Coordinator for Protective Security, Chief Superintendent Nick Aldworth said: “The police work closely with Government, local authorities and businesses to look for new and innovative new ways to keep people safe. Officers from the Counter Terrorism Policing network have been working with industry and Government to support the development of a security culture within the vehicle hire industry.

“The introduction of the scheme shows a real commitment by industry to increase the levels of security awareness, promote the reporting of suspicious behaviours, enhance security checks and encourage support for law enforcement activity against crime and terrorism across the industry. This can only be a positive thing when helping keep people safe.”

Companies are encouraged to apply and sign up to the scheme.

image ©  Brian Minkoff / Shutterstock.com

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Digital transformation: where are the chinks in your armour?

This year’s data spillage at the US Marine Corps Forces Reserve, which laid bare personal details of 21,000 marines, sailors and citizens, and the leak at India’s defence ministry that exposed sensitive data on a number of soldiers, are a stark reminder that even organisations in the most security conscious of sectors is vulnerable to data loss.

As more operational processes are digitised, and emerging technologies are introduced to improve business efficiency, the threat potential increases. New cloud- and IoT-driven architectures can be exploited by hackers, for example, while mobile working practices make it more likely that employees will expose information to loss or theft.

Data without boundaries

Research from Apricorn shows that 29% of organisations have suffered a data breach or loss as a direct result of mobile working. Employees collaborate and share information daily across mobile and cloud platforms, potentially making it vulnerable to access by unauthorised users. They are also physically removing information from the organisation on smartphones, removable hard drives and USB storage devices, which are easily lost or stolen.

In the office, connected devices can increase the ransomware threat, while providing hackers with an entry point to the network from which they can move laterally until they find something of value.

Another avenue of risk lies in defence supply chains, which are increasingly complex and globally dispersed. It is unlikely that any contracting organisation will have a detailed picture of its suppliers’ digital environments and cybersecurity frameworks – and this increases the risk of falling foul of regulations.

Seize control

Digital data must be protected at all times, but most security strategies and policies are no longer fit for purpose. There’s no clear perimeter to patrol and defend in this new business environment, and traditional security models and tools such as firewalls, VPNs and gateways cannot be relied on to prevent data loss or stop cyberattacks. Digital transformation delivers the agility and speed-to-market required to remain competitive. This means that limiting access to ‘risky’ technologies and applications is not the answer to safeguarding data.

The solution lies in a multi-layered security approach that is both people-centric and data-centric, and which encompasses policy and technology. There are four key actions that will enable organisations to understand where their liabilities are, and take decisive steps to address them.

Audit all company data. This will provide visibility of exactly what data the business holds and processes, and highlight where information may be unprotected and/or at risk.

Every organisation should document:

  • Exactly what data is held and collected, and for what purpose.
  • Where it is held, and where it flows.
  • How it is processed, stored, retrieved and deleted through its lifecycle.
  • Who is authorised to access it, and why.
  • What security controls are applied to it.

 

This is a good opportunity to improve data hygiene by deleting any data that is not required to run operations, and to limit access to information only to those who need it.

The organisation should also check that the way digital data is handled and controlled complies fully with key regulatory frameworks such as ITAR. GDPR extends the definition of personal identifiable information (PII) to genetic data and biometric data, as well as IP addresses and cookies where these relate directly to individuals – making it essential that these categories are appropriately protected.

 

Review security policies, procedures and processes. This will highlight any gaps which need addressing. Existing policies should then be updated, and new ones developed as necessary, to control how digital data is captured, accessed, processed, managed and disposed of. These must be clearly defined, written down, and shared across the organisation and with partners and contractors.

Specific policies and processes should be created and enforced to protect data when it is outside of central systems, including policies that relate to removable media, mobile devices and flexible working. One in 10 companies admits its security strategy does not currently cover storage devices such as USBs.

Processes that enforce the regular backing up of systems and data, meanwhile, will help to mitigate the impact of a ransomware attack.

The business must also put in place processes that prime it to respond to requests EU citizens may make under the new rights bestowed on them by the GDPR – such as demanding their data in a portable format, or that all their data is deleted.

 

Encrypt data at all stages of its lifecycle. Strong encryption forms the last line of defence. This approach should include the mandating of a FIPS certified, hardware encrypted mobile storage device, and the enforcement of its use through policies such as whitelisting and locking down USB ports so they can accept only approved devices.

Build a culture of accountability. People remain the weakest link when it comes to data security: 44 per cent of IT decision makers in the UK expect employees will lose data and expose their organisation to the risk of a data breach.

To mitigate the human risk, organisations should run training programmes that educate all users in the threats and compliance requirements specific to the business, their role in protecting data, and the procedures they must follow. These can be extended to partners’ and contractors’ teams to ensure the entire supply chain follows the same best practice.

Digital business is creating a complex and evolving security environment, and defence organisations’ security strategies must keep pace with the speed of their digital transformation programmes. This means carrying out data audits at regular intervals, and reviewing policies to check that they remain fit for purpose. Security systems must be up to date – particularly encryption and authentication technologies, tested regularly, and adjusted to defend against evolving cyber threats. Achieving a security posture appropriate for digital business is anything but a one-off exercise.

Jon Fielding, Managing Director EMEA for Apricorn

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Taking up the challenge: DASA innovating people in defence

The search for innovation dominates the defence industry as the Ministry of Defence seeks to leverage potential game-changing advantages on the battlefield. 

For most people this would bring to mind cutting-edge technology being developed and tested in secrecy at a secure military facility.  Whilst the aesthetics of the latest unmanned aerial vehicles look like something you might expect to see in the latest sci-fi movie, innovation is not the exclusive province of hardware. 

One of the priorities for innovation in defence is how to recruit, train, retain and motivate the right number of people and make the most efficient and effective use of the workforce. 

People are central to defence capabilities and are core to delivering defence outputs. The MOD employs 195,520 regular military and civilian staff and 32,240 Reserves.  

Spending on defence staff also accounted for around 30% (£10.3 billion) of the £36 billion Defence spending in 2016-17, with the department tasked with continually reviewing expenditure and activities to ensure that the best result is achieved with the resources available. This includes exploring all opportunities to improve the efficiency and effectiveness of our people and the supporting processes, behaviours and cultures. 

Emerging technologies such as industrial robots, artificial intelligence, and machine learning are advancing at a rapid pace and the Ministry of Defence is keen to see how these technologies can be exploited.  

It is anticipated that the seemingly relentless pace and scale of technological change will have a significant impact on the way the workforce – the Armed Forces, Civil Service and contractors – connects with the MOD, while the communities within the workforce are set to fundamentally change. 

At the same time, the MOD is keen to stress that while the advancement of technology will bring numerous advantages, it will never replace the human capability and capacity to create, innovate, and make decisions.  

In particular, value-based decisions that require moral and ethical judgment are likely to remain a human endeavour for the foreseeable future in Defence. 

Instead, there is a need to better understand the implications of emerging technologies for the residual skills required to plan and embed a culture of lifelong learning. 

In addition to this, the MOD also shares many of the same challenges that face other large and complex organisations when it comes to leading, managing and using people. 

As part of efforts to tackle these, the Defence and Security Accelerator (DASA) launched The Defence People Innovation Challenge in an effort to seek innovative ideas from industry and academia and present them to users across both the defence and security services.  

The Challenge represents a different proposition for DASA as it shifts its attention from innovative technology to people.  

Mark Darvill, an Innovation Partner at DASA, explains: “Most of the challenges that we get involved in are very focused in technology areas. This one is aimed at the people space. So whilst it will still attract some HR technology, it’s all about looking at the challenges defence faces in the people space.”  

The Challenge will see up to £6 million of funding committed from the Defence Innovation Fund – the £800m fund set up after the Defence Innovation Initiative – and is sponsored by the Chief of Defence People (CDP).  

Mark says the CDP is the driving force behind the challenge and set the strategy for developing a case for motivated military civilian workforce: “Their aim really is to look strategically at how we recruit, retain and motivate our workforce.  

CDP has a great desire to bring in some fresh thinking. When you look outside in the enterprise community, the way that companies recruit, interact and motivate their staff has obviously changed quite a lot and changed at quite some pace. New technology-based solutions allow employees to connect with the company and the teams they work in and CDP wants to bring some of that thinking into defence.  

“Defence is obviously a very different environment to work in but, having looked at it in some depth now, we think some of that thinking can be brought in to great advantage.” 

The four main challenge areas are recruitment, motivation, retention and skills.  

The push for innovation within the defence industry means that the Challenge will look for solutions to help recruit the right mix of capable and motivated people.  

Mark explains: “As time moves on, some of the other areas that we get involved with – such as artificial intelligence or autonomous vehicles – actually require different talents, different types of people to be recruited within the defence forces alongside the normal people they need to reach out to.  

“So it’s all about how do you actually reach out to people who may not have left school yet? How do you reach out to them given that they have a very different view and outlook on life and a different social environment as well?”  

The second aspect to the Challenge is motivation. It will look to increase engagement by preparing people to actively lead and contribute to defence’s goals.  

The third area is retention with solutions sought to help retain skills and experience of people longer within the Armed Forces.  

The fourth challenge area sees DASA looking for solutions that will help secure access to knowledge, skills, experience and other attributes that are needed to meet the increasing demands of the defence workforce.  

“It’s all about looking at things like reducing costs of developing new skills; how do we develop them – do we send to classrooms or can we do it in an online environment – and really looking at how we can reduce the time and resources required to develop high-level skill areas.   

“The fact the Challenge represents the biggest investment in innovation in people in defence since the 1960s is a reflection of the importance placed on modernising people management in the defence industry,” says Mark.  

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Data-driven defence

Data is a critical asset for military organisations, but this data is only valuable if used effectively. With this in mind, Emma CyganDesign and Development Engineer at steering system supplier Pailton Engineering, addresses the need for data-driven design in military vehicle engineering. 

The military vehicle sector is rapidly adapting to changing security threats and new technologies. In fact, much of the UK Ministry of Defence (MOD) and the US Department of Defense (DoD) procurement activity now uses cloud services, software and technology products involved in the collection and processing of huge reams of data. However, the industry is still at the early stages of making full use of the wealth of information available to it.  

Designing with data means that military vehicles are able to take on the rough terrain and turbulent conditions of the real world — with maximum survivability. But, where does this data come from? 

Connected military vehicles are generating gigabytes of data from sensor-packed functions including on-board systems that monitor a vehicle’s oil, temperature and fuel consumption, as well as more general performance data, such as speed, distance travelled and location. This data can be used to track vehicles and personnel and, importantly, make intelligent decisions and inform the design of future vehicles.  

By using data generated from real-life vehicles, design engineers can make more informed decisions on how to best manufacture a military vehicle. Real-life vehicle data is used to design, manufacture and test military-grade steering systems against the specified load and frequency data of the real-life application. If the load data is unknown, theoretical calculations and simulation software can also outline loads.  

It is not necessarily the static values of the load or frequency data that is of most concern in the design process, considering that most military vehicles are designed to go above and beyond the actual loads and frequencies they will face. Rather, it’s the dynamic nature of the vehicle’s activity — the varying loads, the changeable frequencies and irregular abusive loads that occur during the vehicle’s life that should be a fundamental consideration.  

This use of real-life data takes this dynamism from the qualitative realm to the quantitative realm, so engineers can use this data when developing a vehicle’s design. 

Data-driven testing 

Data-driven design enables data-driven testing. One of the most important parameters to test for a military vehicle and its parts is the maximum load. With this information you can observe how much force a part can endure, in both tensile and compression, before a failure occurs. Using different rigs to test a range of force applications, forces up to ±400kN can be applied both statically or dynamically. 

Moreover, with enough data, you can compile a multitude of loads at their respective frequencies and cycles as part of a dynamic block testing program. This program effectively mirrors the real-life data that is gathered from the vehicle to accurately assess the true fatigue life of the part.  

With a variety of loads and frequencies in place, engineers can measure the number of cycles that the parts can endure over time, performing one million load cycles in only one week. That’s enough to replicate infinite life for a part on a vehicle, meaning lifecycle management decisions can be made in advance.   

As connected military vehicles are generating more data than ever before, it makes sense that these vehicles be produced with meaningful design data at conception, to maximise safety, performance and efficiency.

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FNH UK: a Long-Term Partner for British Defence Forces

FNH UK is the UK-based subsidiary of FN Herstal, a name synonymous with excellence and global leadership, backed up by passionate and talented people for 130 years. 

The unique FN portfolio includes portable firearms and ammunition, less lethal systems, an FN® e-novation line, integrated weapon solutions for air, land, sea applications and remote weapon stations, all combined with a 360-degree service.

Pistols & Submachine Guns

The FN Five-seveN® Tactical Mk2 pistol is extremely light with a magazine holding 20 cartridges. The FN P90® submachine gun is a compact, lightweight weapon with a 50-round magazine making it the ideal Personal Defence Weapon.

Carbines, Rifles & Grenade Launchers

The FN SCAR® family of rifles covers the full range of requirements with the very short subcompact version, the 5.56mm and 7.62mm NATO calibre assault rifles, and the highly accurate precision rifles. The 40mm FN40GL® Mk2 grenade launcher, mounted under any FN SCAR® assault rifle or used as a stand-alone launcher, provides increased capability to the user.

Machine Guns

The FN MINIMI® Light Machine Gun (now Mk3 version) available in 5.56mm and 7.62mm NATO calibre, the FN MAG® 7.62mm NATO General Purpose/Medium Machine Gun, and the FN® M2HB-QCB and FN® M3 .50 Cal Machine Guns have repeatedly proved themselves in combat to earn their position as market leaders in their field.

Less Lethal Systems

FNH UK proposes a range of FN 303® less lethal launchers and projectiles that deliver a sufficiently dissuasive, temporary level of pain within the impact zone to obtain immediate compliance.

FN® e-novation Line

This innovative line is composed of the FN® Expert marksmanship training system, FN® FCU Mk3 fire control unit for 40mm grenades and FN SmartCore® shot counter with dedicated software for smart small arms management.

Small Calibre Ammunition

The Company has a proven record in the development and production of high quality small calibre ammunition to ensure full reliability of the weapons on the battlefield.

Airborne Crew Served Weapon Solutions

These systems are designed around FN machine guns (FN MAG® and world exclusive FN® M3) to guarantee full mission capability while ensuring protection for the carrier and maximum safety for the crew.

Airborne Fixed-Forward Firing Solutions

These fixed-forward weapon systems come with a complete suite of solutions, providing military forces with the highest level of operational capability for their rotary- or fixed-wing applications.

Remote Weapon Stations

The deFNder® family of Remote Weapon Stations provides optimized remote firing capability while keeping the operator completely under armour protection.

Land & Sea Mounted Weapon Solutions

FNH UK integrates its machine guns onto pintle-mounted or coaxial weapon systems for land and naval applications.

A 360-degree service

To back its quality products FNH UK proposes effective and reactive assistance to ensure long and reliable service life. FNH UK provides training, technical assistance and documentation, upgrades, retrofits and everything customers in the UK need to gain the maximum tactical advantage from its innovative range.

For more information on FNH UK, visit www.fnhuk.com.

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