How lessons from non-defence infrastructure projects can change the pace of procurement in defence

Rapid infrastructure investment set out in the UK’s Strategic Defence Review calls for procurement innovation

Rapid and effective procurement will be essential to the enhancement of the UK’s military capabilities as set out under the Strategic Defence Review. Private sector involvement is key to achieving that, according to Mott MacDonald’s technical director of supply chain and procurement Matt Sellwood.

“Procurement measured in months, not years” is called for by the recently published Strategic Defence Review (SDR) and the report itself acknowledges that will require “radical reform”. While the SDR recommends more agile and collaborative procurement methods to reduce the time and money spent on infrastructure development, understanding the current problems and how the private sector can deliver change at pace is important.

Image credit: UK MOD

The defence sector faces many procurement challenges. Processes are often slow and cumbersome due to complex regulations, extensive documentation requirements and multiple approval stages. The sector has traditionally been very risk-averse and as a result current processes are often rigid and inflexible, prioritising compliance over innovation. This approach affects the ability for small and medium enterprises (SMEs) to compete for work, even if they can demonstrate the necessary ability and experience, which limits diversity and opportunities to innovate within the supply chain.

Learning from other sectors

Making better decisions about the route to procurement is key and looking closely at the needs of the project at hand, rather than repeating the process from past schemes, is essential. Drawing on procurement expertise from other sectors, such as health, housing regeneration and construction, Mott MacDonald has developed a tool to support defence clients to make more effective procurement decisions. It helps clients navigate complex procurement processes by providing a logical approach to decision-making, based on tried and tested results, ensuring that the best procurement strategies are selected based on project-specific requirements and current market conditions.

Coupled with Mott MacDonald’s expertise in conducting maturity assessments to evaluate an organisation's readiness to undertake large projects, this tool has been shown to help clients avoid supply chain issues further down the line.  On a recent £12M health infrastructure project the benefits of this structured approach were clearly demonstrated. The tool helped the team develop a procurement route which ensured the project could be delivered within strict funding constraints, while also meeting the client's key social value, quality and sustainability drivers. Understanding how to support supply chain participation and open opportunities to a wider supplier base is also vital. One answer could come from splitting projects up into smaller tasks, or lots, which could be completed by SMEs and creating a broader supplier community that clients could tap into for specific expertise. Another would be an alliancing approach, which Mott MacDonald Bentley has successfully undertaken with Costain, Farrans and Jacobs for Anglian Water’s Strategic Pipeline Alliance. This alliancing model is structured to drive collaboration around a common goal with open and early engagement that fosters a shared understanding of the project goals and progress.

Early engagement

Whatever the model of delivery, early engagement with the supply chain and other stakeholders is essential and the benefits have been proven on multiple projects delivered by Mott MacDonald, both in the defence sector and on other infrastructure schemes. Established procurement processes used in defence often have limited pre-market engagement, which can result in missed opportunities for collaboration and innovation as well as misunderstandings between the client's expectations and what the contractor delivers. Engaging with the supply chain early can help identify potential issues and develop more effective solutions.

We saw this first hand as delivery partner on a £3.5M defence project where nine organisations within the supply chain were brought together for regular collaborative workshops ensuring a smooth, unambiguous transfer of knowledge between client, designers and construction contractors and accelerating the process from concept to boots on the ground.

The SDR is a real opportunity to change some of the habits of the past, particularly in combination with the new regulations introduced by the Procurement Act. Industry partners can help the defence sector choose a more bespoke procurement process based on proven methods that work in other sectors. Ultimately, a collaborative, rather than combative, approach to procurement is now needed to move the SDR from recommendations to reality and using cross-industry experience will be critical to enabling defence clients to do this.