The scheme, headed by the Minister for Defence Equipment and Support Lord Drayson, aims to encourage competitive bidding for a wider range of defence business and to encourage greater innovation from the industry.
Lord Drayson, an entrepreneur who gained his peereage in 2004, issued the following statement. “We are committed to making the Ministry of Defence SME-friendly. This is one of a range of initiatives aimed at making it easier for small and medium companies to do business with us”
He continued, “SMEs play a crucial role in UK defence business and represent a significant core of direct suppliers to MOD. In 2005, just over half of all MOD contracts let were placed with SMEs, to the value of over half a billion pounds. Today’s announcement is a significant development and one which I am convinced will further promote a dynamic and competitive supplier base.”
From 30 April 2007, the threshold value for advertising MOD contracts was lowered.
On 30 April, the threshold for ‘warlike’ requirements saw a dramatic decrease from GB pound 500,000 to GB pound 93,000; then on the 20 June this year it will be lowered again to GB pound 40,000. The threshold for ‘non-warlike’ requirements will also be dropped to GB pound 40,000.
In a further attempt to generate additional adverts to bring work to the attention of smaller companies, the MOD project teams will be encouraged to consider advertising requirements with values as low as GB pound 20,000. This change could generate up to 7,000 additional adverts a year.