29.05.2020

Dear members and friends of NDI,
 
Welcome to this week’s Defence Insights. Firstly, please accept my apologies for the lack of Insights last week. With two of our team currently furloughed it is a pretty busy time. We look forward to welcoming James and Sammi back in June. We are busy planning our next Maritime themed Meet the Buyer on 24th June. We very much hope to have a senior representative from the Royal Navy or a UK Naval Prime and our old friend John Kite is working on a senior DE&S speaker. We already have 43 SME’s signed up and around 12 buyers, with more joining all the time. If you would like a place please sign up here

We also have plans for a Defence Infrastructure (fixed and deployable) Meet the Buyer in September with a couple of partner Trade Associations and we are in early discussions about an end of year new tech / incubator MtB which we think could benefit both our SME and Prime members looking for technology disrupters and innovation. 

We are also discussing an exciting initiative to develop some export sessions too. More news to follow on this. 

We have ‘Zoomed’ with Hellios Consulting and agreed an exciting deal for NDI members; a generous discounted rate for NDI members with between £1-5m turnover (£275 instead of £575); for SMEs below £1m turnover there is no charge. JOSCAR (the Joint Supply Chain Accreditation Register) is a collaborative tool used by 12 leading defence primes and parts of MOD to act as a single repository for pre-qualification and compliance information. Using JOSCAR can determine if a supplier is “fit for business” and can also provide valuable business improvement opportunities for the supplier completing the process. There are currently 5,000 business registered or going through the process. We are also delighted to welcome Hellios to membership of NDI. For more information on Hellios and JOSCAR click here or contact Ciara [email protected].  

I was on a group teleconference last week with Jim Carter, MOD.  We raised a number of issues that we will follow up. These included the inconsistent application of the JOSCAR process by Primes and MOD. i.e. if an SME is registered with JOSCAR then please (Prime / MOD) don’t make them go through another separate pre-qualification process as well. We know JOSCAR are actively working on this too. It’s expensive, time consuming and annoying for SMEs. Kathryn Clamp was kind enough to highlight this to us.

Please keep your stories coming on poor practice by MOD / Primes. Especially selection of overseas suppliers over UK ones based purely on price. We are pressing MOD on consideration of lead times, supply chain risk, quality, UK prosperity agenda etc. We are also tracking concerns from our friends in the Regional Aerospace Alliances who are seeing downward pressure on prices, refusal to pay for item ordered, manufactured but not paid for and longer payment terms. If you have experienced this please let us know.  

Regarding Covid-19 Make UK’s Chief Executive Stephen Phipson commented recently on the extension of the Covid-19 Job Retention Scheme:

“I applaud this announcement which avoids a looming cliff edge triggering significant redundancies for many companies and recognises the need for greater flexibility as the economy fires up. Government has been very supportive of business since the start of the crisis and it's encouraging that it stands ready to stand behind industry to protect jobs and key skills over the summer and autumn. Along with other business groups, we have called for these enhancements to the scheme and are very pleased the Chancellor has responded so positively.
 
"There is no silver bullet to any of this and both Government and industry are going to have to be adaptive, creative and flexible through what is likely to be a bumpy and turbulent flight into the future from now on. This is going to require a range of policies starting with today's extension of the Job Retention Scheme, followed by a three stage plan to get the economy up to full speed by later in the year. We will continue to work in partnership with the Chancellor as we navigate these unprecedented challenges."

If you have any comments do not hesitate to contact me or your NDI Account Manager and please forward this to anyone that might be interested or may want to join NDI and ask them to contact [email protected] to be added to the mailing list. We send you our best wishes in the meantime. Please look at www.makeuk.org for the very latest news and advice for manufacturers. 

Please stay safe and well (and your families) and enjoy the weekend.  Andrew Kinniburgh ([email protected])

MOD and Policy News

Defence and Security Accelerator (DASA) 

Open Call remains open for innovation across all areas of technology from DASA. Link here to see details. 

DIT-DSO

It is worth mentioning, in case you weren’t aware, you can call any individual within DIT-DSO by using the directory. So if you have a specific enquiry you can simply call up the relevant desk officer and make an enquiry. They will then reach out the relevant in-country team, Defence Attache or other contacts. We can also help with this if you do not get anywhere with an enquiry. 

House of Commons Defence Select Committee.

The committee has been taking evidence from a range of senior defence industry representatives about UK Defence Industrial Strategy. This includes Professor Trevor Taylor from RUSI. I spoke to Trevor at length the day before he gave evidence and we discussed the landscape from an NDI member perspective. I would encourage you to watch the recording here. If you have any comments do let us know. The headlines are really that there remains a lack of any meaningful UK Defence Industrial Strategy. MOD has still not got its ‘head’ around what the benefits (tax revenue/jobs/contribution to some hard to reach local economies) of buying from the UK Supply Chain is. The hope is that exiting from the EU may provide greater flexibility. Of course it may also provide greater complexity in terms of cross border movement of goods and engineers.   

Hansard Defence News   

Updates are here. 

DE&S

No news here.  

Defense News

Reports that MOD is about to launch the final stage of a competition to manage ground station capabilities for the armed forces Skynet satellite communications network. 

They also report on a study by the Warsaw Institute (European think tank), warning that the U.K.’s exit from the EU on Dec 31st means existing arrangements and defence cooperation agreements “will need to be reassessed, completely changing the defence landscape of Europe.” It reports that an extension to the current Dec. 31 exit would “mitigate damage”. At this time our soundings in government do not indicate an appetite for extension.  

Janes Defence Weekly

Reports that the first Type 45 destroyer, HMS Dauntless has arrived at Cammell Laird's shipyard in Birkenhead to receive new diesel generators intended to sort out major problems with the power and propulsion system which the Type 45s have been blighted with since they entered service.  

UK Defence Journal

Boeing has selected STS Aviation Services and its Birmingham site (in the state of the art hangar built by Monarch Aircraft Engineering at Birmingham Airport) for the conversion work on the United Kingdom’s fleet of five Wedgetail Airborne Early Warning (AEW) Mk1 aircraft following the withdrawal of Marshalls from the contract. Details here. 

Financial Times

Reports on that global defence spending may be adversely affected by Covid-19. Beatrice Heuser, a war expert at the University of Glasgow, predicts swingeing cuts to defence budgets, hitting procurement and recruitment. She argues that “It is hard to see why governments recovering from economic shock would prioritise defence spending over health and social care, coupled with isolationist voices in the US and UK…….. with critics asking why taxpayers money should fund overseas operations and international aid when resources are stretched.”

If you have any comments or questions arising from this Defence Insights do not hesitate to contact me or your NDI Account Manager. We are here to help and support you through this very challenging time. Please forward this to anyone that might be interested or may want to join NDI and ask them to contact [email protected] to be added to the mailing list. We send you our best wishes in the meantime. Please look at www.makeuk.org for the very latest news and advice for manufacturers.

Please stay safe and well (and your families)

Andrew Kinniburgh

MOD and Policy News

Defence and Security Accelerator (DASA)

Open Call remains open for innovation to fight Covid-19 and other areas of technology from DASA. Link here to see details. Scroll down to see Covid-19 specifics.

DIT-DSO

I attended a video call on Friday 24th hosted by Mark Goldsack (Hd DIT-DSO) including various defence and security trade associations. This was focusing on the future of the defence supply chain, particularly from an export perspective. We await slides from this meeting that we will push out to you our members as soon as we receive them that pose a number of questions about your views of the future of defence supply chain from an export perspective.

Your responses will then be fed into the Integrated Review. I asked specific questions on the British Government’s willingness to consider linking DIFID’s large aid budget to trade deals and whether MOD were considering adopting an official line on Offset for large Defence deals awarded to overseas contractors. Both options are actively being considered. Finally, I asked if DE&S were included in this cross departmental review and if Buying from the UK was a priority. Mark assured me they were included and it was on the agenda. See below for Mark Francois’s questions about a root and branch review of Defence Procurement.

House of Commons Defence Select Committee

The Defence Committee has questioned Ben Wallace MP (Secretary of State for Defence) via video link, together with senior officers. The coverage can be found here. Questions from the committee included:

  1. Why MOD’s strategic planning, logistics and contracting skills were not being deployed more widely across other government departments and why MOD’s scenario planning, which had detailed planning in place for a global pandemic was not used across government.
  2. Was there a higher incidence of cyber and other aggressive moves from our adversaries? He answered yes and certainly Make UK / NDI’s research both directly and with our cyber partner ACP would suggest that there is a big jump in attacks, up to a 400% increase. ACP are currently offering a 6 month payment holiday to help businesses protect themselves during this time. You can find details here.
  3. S of S backs an investigation into the outbreak both internationally and nationally.
  4. Total staff (civilian and military) currently supporting the national Covid-19 response equals 2587. 19,000 + under High Readiness (variously on 24/48 hrs notice). Currently standing up teams to conduct mobile testing for care homes.
  5. Fleet Solid Support Ship – reopening the competition around September 2020. S of S described it as a flawed procurement activity upon questioning from MPs about it needing to be built at a UK shipyard.
  6. The Integrated Review has been “slowed not stopped but is not running at full throttle”
  7. Overspend Problems with political interference, over specing of equipment and SDSRs have all conspired to make the defence equipment budget.
  8. Mark Francois MP asked for a commitment to a root and branch review of the defence procurement function. S of S stated that MOD needs to reform around the culture and optimism of thinking on programmes and disconnect between estimated and actual cost but stopped short of wholeheartedly endorsing Mr Francois’s statement.

 

Hansard Defence News

Nothing new to report.
 

Defense News

Reports on the answers given by the S of S above.
 

Janes Defence Weekly

Reports BAE Systems has been contracted to deliver an autonomous version of its Pacific 24 sea boat to support the UK Royal Navy’s (RN’s) NavyX autonomy and lethality accelerator.