The UK construction industry has warned that a major overhaul of defence procurement is needed if ambitious infrastructure spending plans are to be delivered, with concerns that the current system lacks the capacity to handle the scale of work ahead.
A report by Gleeds argues that the Defence Infrastructure Organisation must move away from traditional one-off procurement models and adopt alliancing and early contractor involvement to build a resilient supply chain capable of delivering projects at pace.
Defence infrastructure investment is expected to increase significantly as the government moves towards raising spending to 2.5% of GDP, unlocking tens of billions of pounds of work across military bases, training estates and secure facilities over the coming decade. The pipeline is already taking shape, with the Strategic Defence Review committing £1.5bn to deliver at least six new UK munitions and energetics factories.
Despite this, the report highlights a disconnect between policy ambition and delivery readiness. It warns that existing procurement structures are not equipped to translate funding commitments into projects on the ground quickly enough.
One defence construction contractor told the consultant that, despite ongoing public discussion around increased defence spending, the past six to eight months have seen a slowdown in schemes reaching the market. This has created uncertainty over timing, scope and funding, making it difficult for contractors to plan resources or commit to long-term investment.
The report identifies fragmented procurement processes, slow approvals and inconsistent project pipelines as key barriers to delivery. These issues are driving inefficiencies, increasing bidding costs and discouraging contractors from engaging fully with the sector.
Mark Graves, senior director of energy and defence at Gleeds, said: “The basics are missing, and this is not new. Budgets are fluid, programmes are delayed or slow to reach market, and ageing infrastructure drives a ‘make do and mend’ approach within overly complicated contractual arrangements.
“Pace in strategic infrastructure programmes is not always there and suffers from a lack of experienced resource on both the industry and client side. Key resource is far more transient today, with international opportunities in adjacent sectors on a more commercial footing coming to market quicker and attracting talent away from defence.”
The report also highlights structural issues within the approval and business case process, which are contributing to extended delivery timelines. Rigid governance procedures and duplicated requirements are adding complexity and delaying progress from concept to construction.
Melanie Phillips, director at Gleeds, said: “Sequential assurance cycles from Strategic Outline Business Case (SOBC) to Outline Business Case (OBC) to Full Business Case (FBC) can add years. Business case, commercial strategy, and delivery planning can run concurrently.
“Requirements change post-contract because they were never standardised for common facility types, where many requirements for accommodation, training estates and storage are replicable.
“Delegation thresholds are often too low, escalating routine decisions to senior sign-off, which immobilises the delivery organisation.”
Gleeds concludes that without a shift towards long-term programme pipelines, more standardised delivery models and improved risk allocation, the defence sector will struggle to attract and retain the supply chain capacity required. Competing sectors such as energy, transport and data centres are already offering clearer pipelines and more commercially attractive terms, increasing the risk that contractors and skilled labour will prioritise those markets over defence.
