Memorandum by the Ministry of Defence
DEFENCE INDUSTRIAL POLICY
1. SUMMARY
In November 2003, the Government published a
review of its implementation of Defence Industrial Policy, with
the active support of the Defence Industries Council (DIC). The
review showed that some good progress in implementing the Policy
has been made. The way forward has been agreed with the DIC and
the Department continues to strengthen its relationship with industry;
we are now seeking to develop further the practical application
of the Policy. The Department will publish a further review around
the end of this year.
We are continuing to make progress in the following
main areas:
2. ASSESSMENT
OF WIDER
DEFENCE INDUSTRIAL
POLICY FACTORS
IN EQUIPMENT
INVESTMENT DECISIONS
Acquisition decisions throughout 2003 have been
taken within the framework of the Policy. However, given the long-term
nature of acquisition, it will take time for the full effects
of the Policy to be seen. Specific training has been provided
to ensure that the need to take account of wider industrial factors
at an early stage is recognised. It is also mandatory for all
business cases for projects with an acquisition cost of £20
million and above to include an assessment of the wider industrial
issues, engaging relevant government stakeholders where appropriate.
3. RELATIONSHIPS
WITH INDUSTRY
A major effort is being made to develop more
effective relationships with the Department's most important suppliers
that will enable us to take a more strategic approach to relations
with industry across our acquisition organisations. The aim is
to develop a mutual understanding of strategic priorities, and
to identify and address impediments to improved business performance.
The Department has taken concrete steps to enhance key supplier
management, and these actions are being pursued as an important
element of broader acquisition initiatives, most notably the Defence
Procurement Agency "Stocktake"' on Smart Acquisition
and the Defence Logistics Organisation Procurement Reform programme.[1]
4. MARKET ACCESS
The Department continues to press for greater
efficiency in the operation of the European defence market and
in the acquisition of military equipment through collaborative
programmes. We are contributing to the European Defence Agency,
which will focus on military capabilities; we are pressing for
timely implementation of the Letter of Intent Framework Agreement;
and we continue to influence the operation of the Organisation
for Joint Armament Co-operation (OCCAR). Building on the US/UK
Declaration of Principles, the Department has set up, in conjunction
with the US Department of Defense, a bilateral forum at senior
official level with the aim of increasing the effectiveness of
defence acquisition co-operation. As a result of the first meeting
of this bilateral forum in February, a number of working groups
have been established to address specific issues. The Defence
Export and Market Access Forum has met on three occasions under
MoD Defence Exports Services Organisation (DESO) Chairmanship
and with the active involvement of the Department of Trade and
Industry (DTI) and the DIC.
April 2004
1 Further detail is contained in the Memorandum on
"Developments in Smart Acquisition". Back
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