MoD to encourage ''exportability'' through procurement

3 February 2012

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3 February 2012 | Adam Leach

The Ministry of Defence (MoD) plans to use procurement to boost exports of UK-produced defence equipment, a white paper has revealed.

National Security Through Technology, launched this week by defence minister Peter Luff, said in the past the focus on the needs of the UK market meant goods or services produced for the MoD were sometimes too pricey to be bought by other countries. This damaged the UK’s ability to profit from exports. “The MoD has sometimes set its equipment requirements so high that the resulting systems exceeded any potential export customer’s needs or budget.”

In future, it wants ‘exportability’ considerations built into new acquisition requirements. This means procurement will have to ask suppliers who submit bids to consider British industry and suggest an export version of the same product of service.

The paper said: “One approach we are exploring, is to specify broad parameters for our equipment requirements, which allow for export potential, and then to use methodologies such as modularity, open systems, and technology insertion to meet the UK’s specific requirements, while industry adopts similar approaches to meet overseas customers’ needs.”

Dr John Louth, senior research fellow/deputy head, defence, industries and society at the Royal United Services Institute, told SM: “It would open up very interesting questions around economic benefits to the UK and how that would compare to non-UK equipment options within an investment appraisal. Before you know it you’re really exploring interesting questions around EU policy, bilateral appraisal policies and all the rest of it.”

The government will continue to ensure the budget for science and technology in the defence sector continues at least 1.2 per cent (more than £400 million a year).

Earlier this week, the UK defence industry was struck a blow when a joint bid by the British arm of BAE Systems and European company EADS failed to win a contract to provide fighter jets, estimated at £12 billion. Instead, the Raffale jet, made by French company Dassault, was named the lowest-priced compliant bidder.

Meanwhile, a decision on whether to outsource MoD procurement will not be made until this spring/summer.

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