Procurement Profile: Ministry of Defence

Procurement Profile: Ministry of Defence

Posted by James Piggott on 03 November 2021

The Ministry of Defence (MOD), in its own words, is responsible for protecting the United Kingdom's "people, territories, values and interests at home and overseas".

With its expansive set of responsibilities, the MOD spent over £40 billion with private sector suppliers from January 2016 to the end of October 2021.

Understanding how, from whom and what the MOD procures is crucial if you're looking to do business with them, or want to cement your existing relationships.

Using Tussell's aggregated data platform, this blog provides an analysis of the MOD's procurement behaviour from January 2016 - October 2021.* Skip ahead to read about the MOD's:

This is the third profile in Tussell's series of public buyer profiles; read our past profiles on the:

 

Presented figures come from publicly available sources; due to the inherently secretive nature of some the MOD's activities, these figures do not reflect their true totals.

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The MOD has spent approximately £40.6 billion with private sector suppliers since 2016, across nearly 150,000 transactions. This makes the MOD the largest public sector body by total invoice value, followed by Network Rail.

Excluding incomplete data from 2021, MOD spending has gradually increased over the past 5 years, rising from £5.6 billion in 2016 to £8.5 billion by 2020.

From 2016 - October 2021, the MOD largest suppliers by total spend were:

Supplier / Organisation

Sector

Total Invoice Value

Largest Listed Contract

Contract Value / Award Date

BAE Systems Surface Ships

Shipbuilding 

£2.87bn

Torpedoes Repair and Maintenance Contract

£230m / October 2019

Aspire Defence

Facilities Management / Construction

£2.35bn

None publically listed.

-

Babcock Land Defence

Defence

£2.06bn

None publically listed.

-

Leidos Europe

Logistics

£1.94bn

LCS(T)/0001 - Additional Commodities VEAT

£2.75bn / July 2017

Amey Defence Services

Facilities Management / Construction

£1.22bn

None publically listed.

-

 

LinkedInLink

 

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From 2016 - October 2021, the MOD awarded at least 5,070 contracts to over 2,000 suppliers, worth over £70 billion. This makes the MOD the largest public body by total contract award value, awarding over double the next largest body, the Department for Health and Social Care, over the same period.

As the above analysis shows, the total value of MOD contract awards peaked in 2018 at £18.6 billion before decreasing year on year, despite the volume of contract awards increasing. This indicates that while the number of contract opportunities with the MOD is increasing, their average value is gradually falling.

Over this period, the MOD's largest contract awards included:

Title

Award Date

Award Value

Supplier(s)

Mechanised Infantry Vehicle (MIV)

May 2018

£11.5bn

Organisation for Joint Armament Cooperation

AH-64E (AH Mk2) Support and Training Service

September 2016

£3.5bn

Boeing Defence UK

Next Generation Munitions Solution

December 2020

£3.4bn

BAE Systems

LCS(T)/0001 - Additional Commodities VEAT

April 2017

£2.75bn

Leidos Europe

Engineering Delivery Partner Arrangement

October 2018

£2.5bn

Qinetiq

 

7-4

 

Tussell's platform identified over 460 likely-to-be-renewed contracts * - with a total award value of £7.11 billion - that are due to expire between 2023 and the end of 2025.

Notably, only 49 of these contracts - valued at £596 million - were call-offs from a framework. This indicates that upcoming opportunities with the MOD lie outside frameworks, making the MOD a favourable target if you're not currently on many or any frameworks.

The largest of these contracts - that are not call-offs - include:

Contract Title

End Date

Award Value

Supplier(s)

Multi-Mission Aircraft

May 2023

£1.55bn

United States Navy

Land Equipment Service Provision and Transformation Contract

March 2025

£937m

Not listed.

PROTECTOR Unmanned Aerial System Contract

October 2023

£415m

US Defence Department

EJISS Contract

December 2023

£347m

Rolls-Royce PLC

Marine Systems Support Partner

May 2023

£334m

Babcock Integrated Technology

* "likely-to-be-renewed" = 'services' and 'supplies' contracts

 

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Since 2016, the MOD has awarded contracts to over 2,000 suppliers.*

The MOD's largest suppliers - by total contract award value - were:

Supplier

Sector

Total Contract Award Value

Largest Listed Contract

Contract Value / Award Date

Organisation for Joint Armament Cooperation

Inter-governmental Body

£11.5bn

Mechanised Infantry Vehicle

£11.5bn / May 2018

Boeing Defence UK

Defence

£6.12bn

AH-64E (AH Mk2) Support and Training Services

£3.5bn / September 2016

Devonport Royal Dockyard

Shipbuilding

£4.39bn

FMSP Submarine Engineering at Devonport and Clyde

£2.11bn / April 2019

Leidos Europe

Logistics

£3.65bn

LCS(T)/0001 - Additional Commodities VEAT

£2.75bn / April 2017

Qinetiq

Defence

£2.73bn

Engineering Delivery Partner Agreement

£2.5bn / October 2018

This figure includes subsidiaries.

 

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Below is a breakdown of the MOD's spend on IT and consultancy from 2016 - October 2021. This analysis was conducted using CPV codes, meaning the data may include some anomalous results.

 

IT and Software (CPV: 48000000, 72000000, 42960000)

 

Since 2016, the MOD has awarded around 1,155 IT and software-related contracts, with a total award value of £3.24 billion.

As the above graph illustrates, both the quantity and total value of such contracts has increased year on year (excluding incomplete value data for 2021).

The largest suppliers in this sector - by total contract award value - were Boeing Defence UK (£536m), Boxxe (£298m), Shared Services Connected (£294m), IBM UK (£201m) and Capgemini UK (£193m).

The largest contracts in this period included:

Title

Award Date

Award Value

Supplier(s)

Briding the Gap (BtG)

November 2020

£500m

Boeing Defence UK

Provision of Armed Forces Pay, Pensions and Military HR and Administrative Services

December 2019

£294m

Shared Services Connected 

Microsoft M365 E5 Software Renewal

June 2019

£191m

Boxxe

Future Operational Service Management Service

May 2020

£161m

Capgemini UK

 

Marketing, Recruitment, Consultancy (CPV: 79000000)

The MOD has awarded approximately £10.2 billion on marketing, recruitment and consultancy contracts since 2016, spanning over 300 contract awards and 200 suppliers.

As the above analysis indicates, though the quantity of consultancy related contracts awarded by the MOD has increased across the period, the value of these contracts varies considerably year on year.

The largest supplier in this sector by far was Leidos Europe (£3.65bn), followed by Capita Resourcing (£1.3bn), Vivo Defence Services (£1.12bn) and Hogg Robinson Travel (£450m).

The largest contracts in this sector included:

Title

Award Date

Award Value

Supplier(s)

LCS(T)/0001 - Additional Commodities VEAT

April 2017

£2.75bn

Leidos Europe

Project Selborne - Provision of Training Service to the Royal Navy and Royal Marines

January 2021

£1.3bn

Capita Resourcing

Future Defence Infrastructure Services - Central

June 2021

£519m

Vivo Defence Services

PSTVS MOD Further Competition

March 2019

£450m

Hogg Robinson Travel

 

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Of the 5,070 contracts awarded by the MOD from 2016 - October 2021, 940 have been identified as call-offs from a framework.

Using Tussell's frameworks analytics, we can see the total value of these call-offs sat at approximately £2.96 billion, and spanned 88 frameworks.

By value of identified call-offs, the MOD's most valuable frameworks are the Bulk Fuels Framework Agreement (£736m), Public Sector Travel and Venue Solutions (£450m), Public Sector Resourcing Award RM3749 (£375m) and RM3733 Technology Products 2 (£343m).

By the total count of identified call-offs, the MOD's most heavily utilised frameworks are RM3733 Technology Products 2 (123 call-offs), Bulk Fuels Framework Agreement (115 call-offs), G-Cloud 11 (78 call-offs) and G-Cloud 12 (78 call-offs).

Across this period, the MOD operated 116 frameworks of its own. The MOD called off approximately 185 contracts via these frameworks, with a total value of £810 million. The most valuable of these - by far - was the Bulk Fuels Framework Agreement.

 

*

As the largest public body by spend, the Ministry of Defence is a procurement titan. With a history of spending large sums on a huge array of clients, the MOD is a worthy target to sell your goods and services to.

This analysis only covers the surface of what Tussell's aggregated data platform can tell you about public sector. With Tussell, you can analyse spend, contract awards, favoured frameworks and more across the public sector, helping you make more informed decisions when selling to the public sector.

Book a demo with our team to see how Tussell can unlock insights for your public sector business strategy.

 

This is the third profile in Tussell's series of public buyer profiles; read our past profiles on the:

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