Contents:

• Introduction
• The Defence Procurement Tracker
• MOD procurement in 6 charts
• What is the data telling us?
• Notable MOD contracts
  • MOD spending with the US Government
• Methodology

Last updated: 27th Jan 2026

Introduction

With recent pledges to increase defence spending and growing geopolitical tensions worldwide, investment in the UK's military capabilities is ramping up.

At Tussell, we wanted to move beyond the headlines and bring clarity to the public procurement driving this key sector.

Introducing: Tussell's Defence Procurement Tracker.

Inspired by our other live tracker measuring public sector AI procurement contracts, this new Tracker draws on data from Tussell's market intelligence platform to map public sector Defence procurement.

This will be essential reading if:

• your company supplies the MOD, or

• you work in public sector defence procurement, or

• you are a journalist, commentator or policy advisor in search of

  hard facts to back up your research.

To start leveraging Tussell's insights to do more business with the public sector - or to start procuring smarter - book a chat with the Tussell team.

*The MOD is exempt from some invoice-level data publication requirements, particularly where disclosure would compromise security. As a result, the figures shown here are incomplete and should be treated as indicative only.

The Defence Procurement Tracker

Between Q3 2019 and Q3 2025:

MOD (incl. ALBs) spent:

£58.6 billion

with private sector contractors

Quarterly MOD (incl. ALBs) spending with private contractors has increased by:

83%

(or 43% in absolute terms)

MOD procurement in 6 charts:

Chart 1: MOD procurement spending, since 2019

Published MOD spending with private contractors grew by 31% between 2019 and 2024.

In real terms, this equates to only a 5% increase, according to the Bank of England's Inflation Calculator.

2023 and 2024 have seen a sustained and substantial rise in MOD procurement outlay, with 2024 marking the highest level of procurement spending on record.

And, data from the first three quarters of 2025 show a further increase, with £10.1bn already having been spent between January and October.

With the UK Government pledging to increase total defence spending to 2.5% of GDP from April 2027, the recent rise in annual MOD procurement spending is likely to continue in the medium term.

Chart 2: Percentage of MOD spending with foreign companies since 2019

Since 2019, around 45% of MOD procurement spending has gone to firms headquartered in the UK.

These include major defence contractors like BAE Systems and Rolls-Royce.

The second largest cohort is firms co-owned by internationally-based firms - a common phenomenon in defence and military facilities management. (This includes British/French and British/US collaborations and is denoted by a blueish-purple in the graph above).

US-based firms such as Leidos, Boeing, and Lockheed Martin have historically accounted for much of the remaining spend.

In recent years, however, there has been a notable shift in the MOD’s supplier base away from US companies. And, European suppliers have experienced significant growth.

The share of MOD procurement spent with French companies, for example, increased from 3% to 9% across 2019 to 2024.

In the face of shifting US tariffs, alliances, and defence policy, it will be interesting to see whether this trend continues into 2025 and beyond.

Chart 3: Percentage of MOD spending with various company types since 2019

Over the past six years, firms registered under defence-related SIC codes have - unsurprisingly - received the largest share of MOD procurement spending.

However, while these firms dominate in terms of total value, the most significant growth in MOD spending has come from the Facilities Management (FM) and Construction sector.

Some of this increase can be attributed to MOD's Future Defence Infrastructure Services (FDIS) programme, which set aside £1.6bn to upgrade and maintain the UK defence estate.

Other large sectors include digital & consultancy, logistics, utilities, property, and professional services.

Chart 4: Total direct government spending with Aerospace and Defence Strategic Suppliers (FY19/20 - FY24/25)

Tussell's Strategic Suppliers report - the flagship report on direct government spending with the public sector's 39 most critical suppliers - shows that, despite increasing MOD outlay, total government spending with key defence contractors has remained relatively flat since FY19/20.

In FY24/25, published spending with Defence Strategic Suppliers (Babcock, KBR, Leidos, BAE Systems, Thales) was barely higher than it was five years before in FY19/20.

Over that same period, Defence Strategic Suppliers achieved a total-government CAGR (Compound Annual Growth Rate) of just 1.2%.

This modest pace of growth appears to be at odds with the Government’s commitment to invest heavily in defence in the face of rising geopolitical threats. However, it could be a sign of increasing supplier diversification in defence procurement.

Download Tussell's latest Strategic Suppliers Report to find out more.

Chart 5: Top 10 frameworks by total MOD call-off value (2024)

In 2024, 10 framework agreements (pre-approved supplier lists) were used to award almost £5bn worth of new MOD contracts.

Of these top 10 frameworks, most contained fewer than 20 suppliers, and two contained fewer than three.

The reliance on narrowly populated frameworks highlights a potential barrier to wider market access and competition - especially for SMEs or new entrants seeking to break into the defence procurement space.

Chart 6: MOD spending with SMEs since 2020 vs average Local Gov't and Central Gov't SME spend

In 2024, just 5% of the Ministry of Defence’s direct procurement spend went to SMEs - markedly below the Central Government average of 11% and far behind the Local Government average of 35%.

While SME engagement by the MOD has edged up since 2020, the department remains one of the most challenging parts of government for smaller suppliers to break into.

For SMEs looking to gain a foothold in MOD procurement, partnering with larger suppliers can be an effective route to market - offering opportunities to build credibility, gain security clearance experience, and scale delivery capacity.

What is the data telling us?

The evidence paints a picture of a defence procurement landscape that is slowly - but surely - expanding.

Between 2019 and 2024, MOD procurement spending grew by only 5% in real terms.

While UK-headquartered firms continue to receive around 45% of procurement spend, there is a clear shift toward greater European involvement, particularly from French-owned contractors, whose share has more than doubled. 

Despite this, the supplier ecosystem remains highly concentrated; in 2024, the top five suppliers alone accounted for over 34% of all MOD procurement spending. Moreover, the frequent use of tightly controlled framework agreements with fewer than 20 suppliers may be limiting access for new market entrants. As such, only 5% of MOD direct spending is with SMEs.

Tussell will continue to track MOD spending via this tracker. Subscribe to our mailing list to keep up to date.

And, book a chat with the Tussell team to learn how our market-leading public procurement insights could help your firm do more business with government.

Notable MOD contracts

The following contracts have been compiled by Tussell's Senior Press Officer, Henry Thompson. For media enquiries, please email henry.thompson@tussell.com.

1. This live £241m contract is for the provision of the Palantir software tool;

2. This live £1.15bn contract with Capita is for army recruitment services;

3. This £19m contract with PA Consulting is for AI, modelling and simulation.

MOD spending with the US Government

Whilst no public contract notice exists, an FOI investigation by Tussell has revealed that, since 2022, the US Department for Defence has invoiced MOD a combined ~£700m annually for:

• The F-35 Lightning Program;

• The preparation of equipment and development of an ammunition-firing test plan in relation to the Challenger 3 Main Battle Tank ammunition scheme;

• The Acquisition and Cross-Servicing Agreement (ACSA) for ammunition in support of 155mm Artillery Interoperability trials;

• A procurement relating to the Multiple Launch Rocket System (MLRS) Memorandum of Understanding (MoU) with the

  United States Government (USG).

Some of these projects are live, whereas others have been discontinued.

In Tussell's most recent Tracker update, we noted an almost complete fall-off in MOD spending with the US Government. However, new analysis shows a sharp 1,659% uptick between Q1 and Q3 2025. 

For more details, get in touch with henry.thompson@tussell.com.

Methodology

The Defence Tracker draws on open public procurement data, aggregated by Tussell’s market intelligence platform.

This article primarily looks at MOD defence spending, which is calculated on an invoice level. 

When MOD procurement is referred to in this article, this includes spending and contracts awarded by MOD and its ALBs.

The MOD is exempt from some invoice-level data publication requirements, particularly where disclosure would compromise security. As a result, the figures shown here are incomplete and should be treated as indicative only.

For the categorisation of the MOD spending, we've used machine learning, AI, and human oversight.

The Tracker is updated quarterly.

If you have any questions or comments about how the Defence Procurement Tracker was compiled, email us at contact@tussell.com

Or, to discover how you can start using hard data to do more business with government, book a chat with the Tussell team.