4 Contract-Winning Strategies You Must Know at All Costs When Getting Your First and Next Defence Contract
Winning defence contracts is a challenging task. With many bidders and contractors competing to sign contracts and tenders. Gaining an advantage over your competitors is a must
Here are 4 ways you can get ahead of your competition
- How to determine the size of a defence contract opportunity
If you want to make it big in the defence industry,
Then, you must direct the right amount of energy to the best contracts.
Determining the size of a defence contract opportunity is the first step,
This process involves assessing several key factors to estimate the potential value and scope of the contract.
Here are the steps to effectively measure the size of a defence contract opportunity:
Review the application Document.
Carefully examine the tender document, such as an Invitation to Tender(ITT) or Pre-Qualification Questionnaire, which often contains critical information about the contract's scope and size:
Scope of Work (SOW): Carefully read the SOW to understand the required tasks, deliverables, and services. Budget and Funding Information: Look for any indications of budget or funding levels provided in the tender. Contract Type and Duration: Identify the type of contract (e.g., fixed-price, cost-plus) and its duration, as these will impact the overall value of the contract
Analyse Historical Data
Research historical data from past contracts to get an idea of the typical size and funding levels of similar projects:
Contracts Finder: Use the UK government’s Contracts Finder service to find details of previous contracts, including their values. Defence Contracts Online (DCO): Check the DCO portal for information on historical defence contracts and award amounts. Ministry of Defence (MOD) Annual Reports: Review MOD annual reports for insights into defence spending and procurement trends.
Understand the Market and your Competition.
Assessing the broader market and competitive landscape can help estimate the opportunity's size:
Market Research Reports: Use industry reports and market research to understand trends, average contract sizes, and competitive benchmarks.
Competitor Analysis: Investigate what similar companies have secured regarding contract sizes. This can give you an idea of the potential value of the opportunity. Evaluate the competition for the contract opportunity. This includes understanding the number of bidders, their capabilities, and the likelihood of winning the contract.
Evaluate the contract type:
Defence contracts usually involve military contracts or government manufacturing contracts and they come in three forms. Defence contracts can be categorised based on their size and value. Here are some common types of defence contracts based on size:
Large Contracts: These contracts typically range from tens of millions to a few hundred million pounds. The UK's Annual Qualifying Defence Contract Statistics for 2022/23 show that the estimated contract price of large tenders is £156 million, with a median price of £17 million.
Medium-Sized Contracts: These are the most common type of defence contracts, often valued at less than £10 million. In the UK, the lower price bands of 'less than or equal to £10m' and 'greater than £10m to £20m' were the two most common price bands for Qualifying Defence Contracts (QDCs).
Small Contracts: These are contracts awarded by prime contractors to subcontractors to assist in delivering bigger defence contracts. In the UK, contracts with a value of £1 million or more are reported, with the estimated price of small contracts being £1.1 billion in 2022/23.
The size of a defence contract can have significant implications for the type of contract, the level of risk, and the profit potential.
Estimate Costs and Resources Required to fulfill the military contract
Develop a detailed cost and resource estimate for delivering the project. This includes:
Direct Costs: Calculate the direct costs such as labour, materials, equipment, and subcontracting. Indirect Costs: Include overhead, administrative expenses, and other indirect costs. Profit Margins: Determine your desired profit margin to understand the potential ROI of the contract. Assess Contracting Trends and Legal Framework in the Defence Landscape
Be informed of current trends and regulatory changes in defence contracting, which can impact contract sizes:
Budget Proposals and Allocations: Review the Ministry of Defence budget proposals and allocations to understand funding priorities. Legislative Changes: Monitor any changes in defence procurement laws or regulations that could influence contract sizes and funding levels.
Use Specialised Tools and Resources.
Leverage tools and databases designed to help contractors assess federal opportunities:
supply2defence: A market intelligence platform that provides data on government contracting opportunities, including estimated contract values. Contract Finder: If you are in the UK you can use Contract Finder to filter out contracts being awarded by the government.
By following these steps, you can effectively determine the size of a defence contract opportunity, enabling you to make informed decisions and develop competitive proposals.
- Resources and tools you can use to find defence contracts
Some resources for finding defence contract opportunities include: Delta eSourcing: Delta eSourcing offers Tender Opportunities for defence contracts, providing a platform for businesses to gain a competitive advantage in the lucrative defence market.
Contracts Finder - GOV.UK: Contracts Finder allows you to search for information about contracts worth over £12,000 in the UK government and its agencies. It provides details on contract opportunities in different sectors, upcoming tenders, and previous tenders and contracts up for grabs.
Defence Contracts International: Defence Contracts International is a valuable resource for those seeking a competitive advantage in defence procurement. It offers opportunities for tendering in the defence market and provides market intelligence, spend analysis, and market leads online.
Tracker Intelligence: Many suppliers miss out on good opportunities because they are unaware that such opportunities exist in the first place. Tracker’s real-time tender alerts service delivers daily relevant contract opportunities and award notices to your inbox.
Use Procurement strategies: Tactics, like Spend Analysis, can help you see who your competitors are winning business with, while Archive Data gives you access to historical tender data to understand how others achieved success.
- How to Get an edge over your competitors when bidding for defence contracts.
Here are some key strategies to improve your chances of winning a defence contract tender in the global marketplace:
Align your business with the Ministry of Defence's (MoD) procurement priorities:
The early awareness provided by the MoD's procurement pipeline enables bidders to align their business plans with the MoD's procurement priorities. This helps suppliers build relationships with key stakeholders, giving them a competitive advantage. Refine your bidding skills through training: Tracker Intelligence offers access to leading procurement training courses through its partnership with PASS Procurement. These online courses help you learn more about procurement, refine your skills, and submit winning bids.
Use comprehensive tender databases like Supply2Defence:
Supply2Defence is the UK's largest defence tender database, sourcing opportunities from over 3,000 sources. It provides access to many opportunities, including low-value tenders not published in the Official Journal of the European Union, and all UK MOD and blue light notices and awards.
Highlight your ability to deliver value for money:
The MoD aims to make procurement models easier to navigate, especially for Small and Medium Enterprises (SMEs). Explain how your business can deliver value for money and grow through these defence opportunities.
Leverage the MoD's commitment to paying 90% of undisputed and valid invoices within 5 days:
This ensures you'll get paid on time for your work, providing financial stability and confidence in the procurement process. 4. Key strategies you must know to increase your chances of winning defence contracts and bids in the global marketplace
To improve your chances of winning defence contracts in the global marketplace, consider the following key strategies: Make a balanced strategy that works:
Understand the importance of offsets in international defence contracts and develop a strategy that aligns with the needs of your target market. This can include industrial compensation arrangements, technology transfer, and job creation. Build relationships and network: Establish connections with key stakeholders in the defence industry, including government agencies, contractors, and suppliers. This can help you stay informed about upcoming tenders and opportunities.
Stay informed about defence procurement trends:
Keep up-to-date with the latest trends and developments in defence procurement, including changes in government policies, budget allocations, market supply, and demand.
Expand your offers:
Consider diversifying your products or services to cater to different markets and customers. This can help you expand your customer base and increase your chances of winning defence contracts in different fields and sectors.
Focus on innovation and technology:
Develop innovative and cutting-edge products or services that meet the needs of defence customers. This can help you differentiate yourself from competitors and increase your chances of winning defence contracts.
Engage early and often:
Begin early engagement with buyers to build relationships and understand their needs. This can help you stay ahead of the competition and increase your chances of winning defence contracts.
Develop a competitive pricing strategy:
Develop a competitive pricing strategy that considers the needs of your target market and the prices offered by your competitors. This can help you increase your chances of winning defence contracts. Focus on customer service: Provide excellent customer service to build strong customer relationships and increase your chances of winning repeat business and referrals.
Continuously monitor and adapt:
Continuously monitor your performance and adapt your strategies to stay ahead of the competition and increase your chances of winning defence contracts.
If you want to sign your next lucrative defence contract then your best bet is Mauriteft consulting
With over 20+ years of experience in manufacturing operations and business consulting, I've helped multiple companies secure multi-million-pound contracts in the defence and manufacturing industry.
My team and I will help you sign your first and next defence contract walking you through the entire process so you can deliver quality goods and services to customers.
Call me at +44 7825956949 or email me at mattbulley@mauriteftconsultingltd.co.uk