§ Mr. Grylls
asked the Secretary of State for Defence in what ways he furthers the Government's policy towards smaller firms through the procurement policy of his Department.
§ Mr. Goodhart
When placing contracts the Ministry of Defence does not differentiate between firms on the basis of their size, except to ensure that a firm has the capability and capacity to undertake the work involved.
The defence equipment programme is such that most of our business, and certainly all major contracts, tends to be placed with the larger firms. The complexity of modern equipment fosters the trend towards prime contractorship. A significant proportion of the work placed with the larger firms is sub contracted and this provides perhaps the best opportunity for small firms to obtain MOD work—although there are fields in which small firms predominate.
Since the responsibility for sub-contracting rests primarily with the main contractors, it is not possible to provide, without disproportionate effort, details of the extent to which small firms are involved in the defence equipment programme. Some indication of their importance is, however, shown by the fact that about 5,000 firms hold current quality-assurance assessments from MOD.
Although there is no special preference scheme for small firms such as that operated by the United States Government, action has been taken to encourage them to tender for Government business. The small firms division of the Department of Industry published in January 1981 a free booklet entitled "Tendering for Government Contracts—Advice for Small Firms" which is aimed at removing any apprehension they may have about bidding for Government contracts and provides information (including a contact point) to enable them to pursue more detailed enquiries with appropriate Government Departments, including the MOD. Another booklet in the same series gives advice on selling to large firms and should assist small firms interested in obtaining sub contract work.