Ministry of Defence is open for business
You may not have considered selling to the Ministry of Defence, but this is a department that buys everything from field kitchens to freight and although not many SMEs are equipped to make nuclear submarines, there is a heap of opportunity in other spend categories. Which is why it’s so good to see the Department taking strides when it comes to easing the way for small firms to win contracts. This week’s newsletter shines a spotlight on their work and the person leading from the front who is well worth a follow.
First, some facts. The Ministry of Defence (MOD) currently works with around 12,000 SMEs and has set a target to increase spend with existing and new suppliers by 50% by summer 2028. The Department buys products and services for organisations that you can see here. The spend increase is ambitious but has been backed up this year with clear intent.
January saw the launch of the Defence Office for Small Business Growth which has been created with the purpose to help the MOD ‘implement procurement strategies that provide opportunity for SMEs to win work within the supply chain’ and to ‘help prime suppliers provide a more consistent and supportive experience for SMEs within their supply chains’ The Office also offers support to defence SMEs on topics from raising capital to going global. You can visit their website here.
This was followed in July with release of the MoD SME Action Plan that kicked itself off by saying it is part of a landscape offering ‘the most comprehensive package of support for small and medium-sized enterprises in a generation’ with a Foreword from Luke Pollard MP saying the Department will create ‘better conditions for smaller firms to start, scale and succeed in our market’ – all very positive.
In monetary terms, the commitment is to increase MOD spend with SMEs by £2.5 billion by summer 2028, which is in addition to the current £5bn spend.
If you are energised by this opportunity, there is a page dedicated to doing business with MOD that includes links to portals advertising open contracts, an MOD Acquisition Pipeline which is a forward look of potential procurement activity and Framework Agreements at MOD, plus a listing of the Departments’ largest suppliers who are being encouraged to identify SMEs in their own supply chain. This page is a treasure trove of resource for any small firm looking to tap into some of that £7.5bn spend and who knew there was a space dedicated to defence innovation, co-working and business support called BattleLab in Dorset? I didn’t!
On this page, another item caught my eye which is the payment performance of MOD. You will be pleased to know that if you do make the most of all the resources and win work, you can expect to be paid prompt, with MOD payment information showing that for the latest available period (second quarter of 2025/26) average payment was made within 5 days for 94.25% of invoices and within 30 days for 99.28% of invoices.
Back to that SME Action Plan, it also included a statement from the head of the Defence Office for Small Business Growth, Tim Ketton-Locke, who I highly recommend you follow, saying:
‘You may come from venture capital, angel investment or banking. Your contribution is vital if the UK is to grow and scale innovation. You may be a landowner or manufacturer with the ability to expand UK industrial capability. You may represent a large, established supplier, whose role in nurturing and supporting smaller suppliers is essential to a healthy ecosystem. Or you may be reading this as a start-up, ambitious, motivated, and asking a simple question: how do I get involved?
Our responsibility is to make the answer clear. Some of you may be reading this thinking, “I have heard all this before, and nothing has changed.” You are right. It has not. But I am determined that it will.’
Over to you, Tim.
Emma