Defence suppliers demand clearer MOD procurement pathways

More than 400 representatives from Britain’s defence supply chain gathered at JOSCAR Live in Farnborough as industry leaders called for clearer procurement pathways, stronger supplier assurance, and closer cooperation between smaller manufacturers and major defence contractors.

The conference took place on 30 September 2026, with organiser Hellios outlining its conclusions in early November. The event brought together Ministry of Defence representatives, prime contractors, financial institutions, specialist engineering companies, and SMEs seeking greater access to defence business.

Now in its fourth year, JOSCAR Live provides a meeting point for organisations participating in the Joint Supply Chain Accreditation Register. The system allows defence, aerospace, and security buyers to access supplier information through a centralised pre-qualification and assurance process.

Keynote speakers included Air Vice-Marshal Ange Baker, Director Joint Support at the Ministry of Defence, and Lord Gavin Barwell, founder of NorthStar Advisory and former Downing Street Chief of Staff. Discussions covered operational readiness, procurement requirements, industrial capacity, and the contribution of smaller suppliers to defence programmes.

The conference followed publication of the MOD’s SME Action Plan in July, which established measures intended to simplify procurement, improve supplier engagement, and increase expenditure with small and medium-sized enterprises.

Under the government’s existing commitment, annual direct and indirect defence spending with SMEs is intended to increase by £2.5 billion, from approximately £5 billion to £7.5 billion by summer 2028. This is an established policy target rather than a new financial commitment made at the conference.

The MOD’s plan includes a target of £2 billion in direct SME expenditure during 2027/28, alongside £5.5 billion in indirect spending through larger suppliers. Indirect procurement therefore represents most of the intended total, placing considerable responsibility on prime contractors to involve smaller businesses in their programmes.

The department already works with approximately 12,000 SMEs through its supply chain. Its Defence Office for Small Business Growth, established in January 2026, is intended to improve access to procurement information, address barriers affecting smaller suppliers, and coordinate support from industry and government organisations.

The office also provides a route for businesses to raise concerns about their experiences of defence procurement. The accompanying SME Commercial Pathway brings together available procurement approaches intended to help smaller companies compete for relevant requirements.

At Farnborough, speakers examined the relationship between procurement access and the industrial capacity required to sustain military equipment. Defence programmes depend on specialist manufacturers supplying components, materials, electronics, engineering services, and equipment maintenance alongside larger platform manufacturers.

These suppliers occupy different positions within complex production networks. Prime contractors may integrate complete aircraft, vehicles, naval systems, or weapons, while smaller companies provide the precision-manufactured components and specialist processes required to complete those programmes.

The ability to participate depends on satisfying relevant technical, financial, quality, and security requirements. Suppliers may need to demonstrate compliance before entering a procurement competition, even where the equipment or service they offer is already used in another regulated industry.

JOSCAR provides a shared means of collecting and managing supplier information for participating buying organisations. The system is designed to reduce duplicated pre-qualification work while giving procurement teams greater visibility of supplier capabilities and potential risks.

Registration does not replace the technical qualification or contractual procedures required for an individual defence programme. Product testing, manufacturing approval, security arrangements, and other project-specific requirements remain the responsibility of the relevant customer and supplier.

Air Vice-Marshal Baker emphasised the breadth of the industrial base needed to support military operations. She said: “From rocks to rockets, our defence readiness depends on the strength and resilience of the entire defence supply chain.”

Baker also identified SMEs as an increasingly important source of specialist skills and innovation, with greater cooperation needed to develop the capacity required for future defence demands.

Industrial readiness depends partly on how quickly manufacturers can respond to changing requirements. Increasing output may require additional machining equipment, qualified materials, production facilities, testing capacity, and appropriately trained employees before new orders can be delivered.

Smaller engineering companies can face particular constraints where investment must be committed before demand becomes sufficiently predictable. Expanding a specialist manufacturing operation requires confidence that the expected workload will support new equipment and personnel over a commercially viable period.

Conference participants therefore called for clearer demand signals from the MOD and major contractors. Greater visibility of future requirements, anticipated procurement timescales, and the capabilities being sought would provide suppliers with a stronger basis for investment and workforce planning.

The event included representatives from major defence organisations such as BAE Systems, Boeing Defence UK, and Leonardo, alongside financial institutions including Lloyds Banking Group. Their participation brought together organisations responsible for procurement, manufacturing, financial services, and specialist industrial delivery.

Financial access forms another part of the capacity challenge. New manufacturing equipment and facilities can require substantial capital, while the timing of defence contract awards and payments influences working capital requirements throughout the supply chain.

The MOD’s action plan recognises that access to finance and investment can affect SME participation. It includes measures to strengthen relationships with financial institutions and investors, alongside programmes intended to improve supplier development and engagement.

Dillon Padraig Harmon, Chief Operations Officer at Needles & Pins Aerospace, described the importance of cooperation between industry, education providers, and government in developing the skills required by smaller manufacturers.

Harmon said: “That greater connectivity across the sector is essential to ensuring the supply chain has the capability, agility and capacity to respond effectively to emerging threats.”

The company’s activities include specialist aerospace textiles, insulation systems, protective covers, and related products used in demanding aviation and defence environments. Such businesses illustrate the range of manufacturing disciplines involved in defence programmes beyond the production of complete platforms.

Skills development was another recurring subject at Farnborough. Specialist suppliers require employees capable of meeting technical standards, operating manufacturing equipment, and maintaining quality systems, while recruitment and training programmes must support both current contracts and future expansion.

Conference discussions also addressed the information available to major contractors when assessing supply chain risks. Buyers need to understand the financial stability, compliance arrangements, and operating capabilities of suppliers whose components or services may be required across several programmes.

Accurate supplier records support these assessments, although they must remain current as businesses change their ownership, production capacity, certification, or operating arrangements. Additional checks may be necessary where an individual contract involves particularly demanding technical or security requirements.

Colin Maund, Chief Executive Officer at Hellios, said: “The strength of the UK’s defence sector depends on the capability of the supply chain that feeds it.”

Maund described the conference as an opportunity for suppliers and purchasing organisations to improve cooperation. He also acknowledged that efficiencies delivered through JOSCAR address only part of the wider challenges facing defence supply chains.

The MOD’s SME Action Plan includes proposals to reduce unnecessary paperwork, improve the visibility of opportunities, and strengthen the involvement of smaller businesses in procurement planning. It also provides for improved monitoring of SME expenditure and greater engagement with major suppliers.

Those measures will be assessed against the department’s existing expenditure commitments. Reaching the £7.5 billion target will depend on both direct contract awards and the extent to which larger contractors increase business with SMEs throughout their own supply chains.

JOSCAR Live is expected to return in 2027. The MOD’s spending and procurement reforms will continue towards the summer 2028 target, with published expenditure figures and the implementation of supplier access measures providing evidence of progress.