Why The UK MOD Should Establish A Non-Profit Engineering Organisation

The UK thinks it has a process problem in defence procurement. It(mostly) doesn’t. The actual problem is that no one knows who is telling the truth, and too few people care to find out.

It should be obvious that industry is incentivised to fib, but I’m not sure it is.

In procurement, the hardest judgement is whether a proposed solution will actually work. In the most complex parts of the market, that judgement has become harder for the buyer and easier for the seller to manipulate. That is what we call knowledge asymmetry. Example: Buyer asks to get a tank to the moon. Seller can’t get a tank to the moon but needs the work, and draws a picture of a tank parachuting onto the moon. Seller: ‘looks pretty legit, they’ve shown how it will get onto the moon - 10/10’

When the deepest specialist knowledge sits inside the companies bidding for the work, and the buyer cannot consistently separate what is credible from what is simply well presented, that gap gets exploited.

The problem did not appear overnight.

The Defence Evaluation and Research Agency, DERA, used to give the MOD something every serious buyer needs: a technical gamekeeper/guard dog. After the 2001 split, Dstl focused on early stage research whilst QinetiQ went from gamekeeper to poacher. No one in the public sector specialised in exploitation, production and supply chain at scale.

The timing was also an issue, as the technology environment was about to become much more complex. Since the break up of DERA, we’ve had cloud, smartphones, cheap sensors, modern software tooling and now AI, which have compressed development timelines and increased technical complexity. The government’s own Defence and Security Industrial Strategy says the UK needs to identify promising technology, exploit it and get it to the frontline faster than its adversaries. That ambition is right. But ambition without strong technical buyers simply creates an ongoing opportunity for those who can play the system rather than deliver what is needed.

Too much of the space left behind by the DERA divorce has been filled by professional services firms whose incentives are tied to time, headcount and lengthy analysis. Many of the people in those firms are capable individuals, but that is largely irrelvant. The point is that the model is structurally incentivised to extend projects, not deliver quickly.

There is a cultural angle too, and it matters more than people admit.

The best scale-ups and engineering-led businesses move quickly because bad news moves quickly. Problems get surfaced early and trade-offs get made in the open. In too much of defence procurement, that kind of honesty is still treated as disruptive, rude or upsetting. Teams that challenge assumptions, surface delivery risk and push for hard decisions can end up being penalised simply for making the room less comfortable. Meanwhile, those who make people feel good fare better.

It is fixable.

The UK should create a genuinely independent, not-for-profit engineering organisation with one clear job: restore technical judgement to the system. It should be an engineering referee that can hire talent at market rates, operate independently, and focus first on the areas of technical assurance where conflicts and complexity are highest. Give it a two-year prove-or-stop remit and a defined role where it gets first refusal on policy-defined professional services work (PSS, in old speak).

None of this is anti-industry. Quite the opposite.

Better judgement would help the best businesses win. It would favour companies that can actually build, integrate and deliver. And frankly, the fact that I’m a founder arguing for more scrutiny should tell you something about how bad it is. Any company that sees tougher technical discrimination as a threat is probably benefiting from the ambiguity.

The UK already knows what it wants: faster exploitation, quicker delivery to the frontline, and a stronger industrial base. What it still lacks is a buying system with enough independent technical depth to tell the difference between a persuasive plan and a deliverable one.

New companies have spent a lot of money building impressive teams and capabilities. They want to know that the MOD is operating a procurement system that is meritocratic.

It is simple to fix, and I remain consistently confused as to why nobody has just gone and done it.