NDA increase in spending with SMEs

nda_logoNDA has published figures showing that overall levels of contract spending with smaller businesses are increasing across the estate. 

The increase in 2012/13 gave Small and Medium Enterprises (SMEs) a 13% share of the estate’s annual £1.6 billion spend in the supply chain, aiming for a target figure of 20% by 2015 and higher than the 11% recorded for the first time in 2010/11.

Last year, the NDA drew up a three-year action plan to ensure greater support for Small and Medium Enterprises (SMEs), which requires all SLCs and subsidiaries to adopt the targets and report on performance.  The plan, which sets a challenging interim 17% target for 2013/14, meets a Government requirement for all departments to help increase the proportion of public contracts awarded to the SME community. Figures for all Government departments, including the NDA, are also due to be published shortly.

Ron Gorham, the NDA’s Head of Supply Chain Optimisation and SME Champion, said: “There is much work still to do, but these figures demonstrate that we are making progress. We remain confident of reaching or even exceeding the formal 20% target.

“Over the last two years, we have been working more closely with our SLCs and suppliers to understand their aspirations, as well as any frustrations with our existing procurement processes.

“Supply chain expertise is critical to every project and programme in the NDA Estate, and SMEs are a vital part of the market, bringing innovation and technical expertise. We are already benefiting from working more collaboratively with suppliers, from questioning our embedded processes and doing things differently.

“As a result we are implementing a range of measures that are intended to simplify procurement and ensure opportunities are more visible at every level.

“All our SLCs have embraced the initiatives and, in addition, are implementing their own individual measures, while the business community is fully supportive.”

More than half of the NDA’s current £3 billion annual budget is spent with the supply chain, largely via the SLCs who place contracts with businesses both small and large, while further opportunities filter out through numerous sub-contracts.

The overall supply chain proportion has grown steadily since the NDA was established seven years ago and recent analysis has enabled the NDA to understand more precisely, for the first time, how the figures are distributed. Further work is also being undertaken to quantify in greater detail the levels of indirect sub-contract spend via the major Tier 2 suppliers.  Future reporting will highlight both direct and indirect spending.

The EU’s specific contractor categories 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.

Among the measures now in place are:

  • 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.
  • Establishment of an annual supply chain event which is free of charge to delegates and exhibitors. Organised jointly by the NDA and its SLCs, this year’s will be held in Manchester on 13 November
  • NDA estate supply chain event website 
  • Simplification of NDA flowdown conditions in sub-contract requirements to make it less onerous for suppliers contracting in the NDA estate. The NDA requires its SLCs to incorporate certain contract terms into all its sub-contracts which have been substantially simplified – these are the ‘flowdown’ provisions.
  • Raising the level at which flowdowns apply from £50,000 to £150,000
  • Simplification and standardisation of a generic set of pre-qualification questions across the SLCs.

The declared estate-wide figures for the last financial year, 2012/2013, are:

Site Licence Company(SLC) Total subcontracted revenues to all suppliers – £m  Total subcontracted revenues to SMEs – £m  % SME spend
Dounreay

111.24

18.99

17.1

LLWR

31.99

7.54

23.6

Magnox

442

52.1

11.8

RSRL

48

5.66

11.8

Sellafield

970.7

82.04

8.5

Indirect T2*

39.0

SLC sub total (approx)

£1.6 billion

205

12.78

NDA **

33.63

11.51

34.22

Total (approx)

£1.64 billion

216.51

13.22

 

* This area offers significant opportunity for additional spend to be captured as only SME data from a very limited number of Tier 2 suppliers was captured for 2012/13.

** Includes INS and DRS.