The Small and Medium Enterprises (SME) Action Plan builds on initiatives already under way across the NDA estate and meets a Government requirement for all departments to develop proposals that will help to increase the proportion of public contracts awarded to the SME community.
The NDA’s plan, which has now been approved by the Cabinet Office, sets a challenging target of 20% of annual sub-contract spend (both direct and indirect) – at least £300 million – to SMEs by 2015, almost doubling the currently reported level.
Half the NDA’s current £3 billion annual budget is spent with the supply chain, via the SLCs, a figure that has grown steadily since the NDA was established seven years ago. Recent analysis has enabled this figure to be broken down for the first time according to the EU’s specific contractor categories. These define SMEs as an independent business employing 250 staff or fewer, with a turnover of up to 50 million euros and/or an annual balance sheet total not exceeding 43 million euro.
NDA Chief Executive John Clarke said:
“We were pleased to submit to the Government our own SME plan, which captures many initiatives that are already being implemented. We are very conscious that the entire supply chain is vital to our mission, and that we and our SLCs, through the supply chain, play an important role in local communities.
“Our spend is a significant proportion of DECC’s budget and it will be a challenge for us, together with our SLCs and Tier 2 companies, to raise the SME proportion from the current 11% figure to hit or exceed the 20% target. We are all fully committed to ensuring that the £1.6 billion spent annually by us and our Estate delivers as much value as possible to the UK economy, and through SMEs to deliver benefits to local economies.”
Ron Gorham, the NDA’s Head of Supply Chain Optimisation and SME Champion, added:
“We, together with our SLCs, have already been working over the last few years to create improved opportunities for the smaller businesses and this challenging but realistic target is part of those measures. The plan is to exceed the target in subsequent years, and continue with the initiatives now being implemented.”
The Action Plan applies to all the SLCs, as well as the NDA itself and all its wholly owned subsidiaries. Drafted last year, it was agreed by the Executive in November and submitted to the Secretary of State for Energy and Climate Change before approval was sought from the Cabinet Office. It will require NDA, SLCs and the top-level Tier 2 contractors to consider the ‘SME friendliness’ of their procurement plans, strategies and processes to support SMEs in the supply chain.
Among the measures now in place are:
- Simplification of the sub-contract flowdown requirements to make it less onerous for suppliers contracting in the NDA estate. The NDA requires its SLCs to incorporate fairly comprehensive contract terms into all its sub-contracts – these are the ‘flowdown’ provisions.
- Raising the level at which flowdowns apply from £50,000 to £150,000.
- Formation of national SME steering group supported by five regional groups.
- Access to contract opportunities via the Government’s Contractsfinder website as the single portal for NDA Estate opportunities.
- Inauguration of an annual supply chain event organised jointly by the NDA and its SLCs.
The Government has set an aspiration that by the end of the Parliament (2015), 25% of government spend would flow to SMEs, directly and indirectly through the supply chain.
The NDA’s 2011 Strategy acknowledges the vital role of the supply chain in meeting the decommissioning mission, and the need to ensure it remains healthy and vibrant. A number of workshops that included representatives from all tiers of the supply chain, as well as SLcs, have led to the development of measures designed to improve access to contract opportunities.
The NDA’s Plan forms part of a wider plan drawn up by the Department of Energy and Climate Change (DECC), covering DECC-related spending.
You can download the plan here.