Managing international defence contracts in the United Kingdom has become increasingly complex against the backdrop of ongoing geopolitical tension on European soil, and further widespread instability in many parts of the world.
These developments, in a post-Brexit economy, have reaffirmed the importance of national security, and the ability of the defence sector, and more importantly, the Ministry of Defence (MOD) to defend the country’s borders, build wider strategic national interest, and promote a more open and direct defence procurement market in the UK.
Even before international developments started unfolding, the MOD was responsible for the biggest and most expensive procurement programmes in government. Findings in the Government Major Projects Portfolio estimate that the MOD had a total budgeted whole-life cost of £162.6 billion between 2019 and 2020.
Budgeted whole-life cost of procurement contracts will continue to increase over the coming years, as the government seeks new ways to strengthen ties with international partners and build the strategic national interest of the United Kingdom.
The importance of managing international defence contracts
Following the UK’s exit from the European Union, the British government has embarked on a long-term, and strategic effort to continue building, fostering and nurturing ties with fellow international allies both within Europe, and in further reaching corners of the world.
These ties are not only politically driven but on a commercial level, the UK government seeks to build a more dynamic economy that creates open market opportunities for private sellers and other companies to enter into procurement agreements with the defence sector.
A House of Commons Defence Committee report found that members of government, and more importantly, the defence sector have agreed that there is a need for improving their relationships with procurement defence contracts, both on domestic and foreign soil.
One of the key reasons for the defence sector to work on building, and managing international defence contracts is for improving performance through the efforts of defence diplomacy.
Although there is not a shared universal understanding of defence diplomacy, the basic explanation refers to the ability of nations to modify their defence content, based on the needs of their security policies.
With the British government attempting to rebuild its national security programs and support progressive defence diplomacy and procurement – partnership between industry and government remains one of the critical links in the value chain.
Best practices for managing international defence contracts
Building reputable relationships with international governments, companies and organisations is vital to the longevity, and overall purpose of the UK defence sector. Having a framework of best practice allows for the procurement of international business, research, and services.
These activities ensure that the defence sector remains an active participant in establishing international defence diplomacy that represents the strategic national interest of the Ministry of Defence and its residents. Yet, this is often far more complex, and technical than we tend to think, and requires substantial resources to successfully achieve.
Fortunately, multiple transactions take place over international borders each day, however, it’s advised that the defence sector consider the best practices for managing international defence contracts, as part of wider defence diplomacy.
Focus on relationships
One of the key responsibilities of the defence sector is to ensure that it focuses on building reputable relationships with both domestic and international partners. This process requires the defence sector to introduce more open market relationships, ensuring effective participation between public and private organisations.
However, current practice will help reveal shortcomings in the procurement process, and how the development of best practice guidelines will become an example of how the UK defence sector can maintain its operations within the country and abroad.
This would further require the defence sector, and any involved government agency, to properly understand and respect any cultural or political difference between the two.
As part of building these relationships, the defence sector should outline realistic procurement goals, backed by a realistic time frame of completion. Using this as a metric, the defence sector, and any involved agencies will remain focused on the long-term outcomes, of effectively managing their relationships, and how this can influence the management of defence contracts.
Provide transparency
For the sake of effectively managing defence contracts, improved transparency provides stakeholders with clear guidance, and realistic timelines to achieving their goals.
Through the process of providing transparency, the government, and more importantly, the defence sector can shed light on any complexities or uncertainties they may be experiencing, and how they can build towards finding actionable long-term solutions.
Furthermore, transparency provides public stakeholders with a look into the type of contracts and dealings the defence sector is undertaking, ensuring that public money is being invested into programs that can directly benefit them.
Additionally, looking through an international lens, current practices of transparency can provide foreign stakeholders, and the UK defence sector with a clear collaborative strategy that seeks to foster long-term partnerships.
Understand applicable law
Across borders, laws often change, requiring the defence sector to understand and abide by the applicable laws. While these laws have been created, and established to protect and preserve the foundations of democracy, and an open market, these efforts can often be misinterpreted, or overlooked. Having the appropriate laws in place would encourage stakeholders to create an equal playing field, and ensure that all stakeholders can equally promote the importance of open market agreements between nations, governments and industry.
Address communication barriers
Effective communication, from all stakeholders is a critical element in the process of managing international contracts. Making communication a key aspect of managing international contracts would help minimise any wrongful interpretations and create a more balanced commitment to an industrial strategic goal.
With a balanced approach, the sector can weigh the appropriate factors that directly promote the importance of transparency for all stakeholders within the supply chain. This would enhance the production process, promote business, and provide industry with guidelines on delivering best practices in the procurement process.
This would help ensure that stakeholders have a clear understanding of how resources are being distributed between public and private industry, and encourage the importance of improving and strengthening national defence design and support capabilities of operational needs and procurement decisions.
Create shared-values
Creating a shared value between stakeholders ensures that all involved participants have an understanding or forward-looking strategy that would help them achieve their goals, and manage their expectations more effectively.
While shared values might not always be the same among different branches of the defence sector, there remains a clear, and perhaps distinctive flow of communication, and values that can contribute to the long-term success of public and private partnerships and the collaboration between government and industry.
Once the defence sector has established a value proposition that it would follow, it can then share this with its common stakeholders, and further use this as a framework that would help guide it to new stakeholders, partners, and collaborators that can directly contribute to the innovative national strategy of the defence sector.
Creating opportunities through collaboration
Using existing frameworks, and further building upon this through the use of effective communication, shared values, transparency, and understanding applicable laws, the defence sector can focus on building lasting relationships, but furthermore, better understand how they can effectively manage their international contracts.
Using these best practices not only contributes to the delivery of critical defence services, but further ensures the long-term investment in developing a national strategic defence strategy, that allows for an open market, and helps to support the importance of research, innovation and development for the future.
