DSEI Gateway: Commercial X – a new approach to defence procurement?
DSEI Gateway’s latest article by Olivia Savage outlines the role of Commercial X in reshaping defence procurement in Britain.
Defence procurement is often criticised for being slow and challenging for small firms to penetrate. To help turn this around, the Ministry of Defence (MOD) has established Commercial X to speed up the adoption of innovative technologies and lower barriers for smaller firms. DSEI Gateway spoke to Dina Kakaras, founder and head of Commercial X, to delve into how the organisation is trying to achieve this.
What is Commercial X?
Founded in 2022, Commercial X can be broken down into three core functions. The first involves discovering and testing new commercial ways of working to support faster procurement, and applying this learning across MOD commercial teams.
The second function centres on improving ‘exploitation’, specifically focused on scaling successful innovative technologies, including from the MOD’s various tech accelerators, Kakaras explained. Commercial X can ‘spot if something works well and amplify it if it’s something entirely usable by other communities within the commercial teams’.
One example of its technology scaling efforts is XV Excalibur, the experimental Extra-Large Uncrewed Undersea Vessel (XLUUV) delivered to the Royal Navy in May 2025 and supported by Commercial X and the Submarine Delivery Agency during trials and experimentation.
With the help of Commercial X officers, who are inserted in the various accelerators, the team can also spot synergies between the frontline commands and their stated requirements, thereby reducing duplication. Being a part of the new National Armaments Directorate Group helps with this too, Kakaras added. Currently, over 40 Commercial X officers are working across 434 projects with the frontline commands, as well as Defence Digital and Defence Equipment and Support – with feedback being ‘really positive’.
Recognising the issues faced by Small and Medium Enterprises, Kakaras noted that ‘it’s not just about proof of concept’.
Third, Commercial X focuses on making it easier for smaller suppliers to do business with defence, by designing and implementing commercial solutions which help them identify opportunities and bid for projects more effectively.
Recognising the issues faced by Small and Medium Enterprises (SMEs), Kakaras noted that ‘it’s not just about proof of concept’. While smaller firms can demonstrate a proof of concept, the real difficulty lies in scaling their technology and transcending the ‘valley of death’, due to complex and lengthy procurement processes.
The ‘valley of death’ refers to the challenges of turning technology from a concept or prototype into a scalable capability – what Kakaras called ‘bridging the say-do gap’. Commercial X is attempting to address this and ‘find tangible ways’ to overcome this barrier. Efforts include the Dynamic Market, simplified terms and conditions for SMEs, and the Neutral Vendor Framework for Innovation (NVFi).
Dynamic Market – A marketplace for SMEs
Launched in July 2025, the Dynamic Market is described by Kakaras as a ‘marketplace for innovation’, designed to connect suppliers – especially SMEs – and defence buyers in a single space. Defence buyers can quickly identify technology which meets their needs, while suppliers can discover new procurement opportunities and gain visibility of current requirements, making the platform both a procurement tool and an ‘information space’.
Kakaras said that ultimately, this ‘dynamic marketplace is an ecosystem of suppliers that we build around specific capabilities, or categories’, which span everything from hardware to software. This market, she emphasised, is not like traditional MOD commercial frameworks, as it remains continuously open. Buyers can launch mini-competitions and onboard suppliers at any time, while suppliers can spot relevant opportunities before having to onboard and become locked into rigid timelines, procurement processes and frameworks. This allows new entrants into the market while ‘lowering that barrier to entry as well’.
‘It’s more than this though, it’s not just like a supermarket where people can buy equipment off the shelf, it’s about going out to industry with a problem or an ambition and working with them to deliver it, sometimes in partnerships with multiple suppliers where we’re pooling the best of our talent and capabilities’, she explained.
This model is notable, considering commercial frameworks are typically heralded by MOD officials as being an innovative approach to procurement. Once suppliers are down-selected, the military can quickly source from them without lengthy processes.
However, with technology now evolving so rapidly – sometimes in a matter of weeks – this model seems less suited to discovering the best innovations, especially when new entrants can only join during select periods. The Dynamic Market, therefore, appears better suited to the rapidly evolving technology environment.
It also has similarities with Ukraine’s recently formed Brave1 online marketplace, which functions essentially as an online store like Amazon, and where military users can independently select and order weapons, or the United States’ (US) ‘Innovation Marketplace’, an online portal which acts as a single access point for industry, academia and other partners to discover the US Department of Defence’s technology priorities and what funding opportunities and competitions are open.
While the Dynamic Market is aimed at the MOD community, Commercial X has also set up a different marketplace – NVFi – designed for use across His Majesty’s (HM) Government to source the latest innovations from micro and SME suppliers.
NVFi
Launched in September 2024, NVFi works by appointing a single ‘Neutral Vendor’ – Constellia – to manage a marketplace of pre-accredited, third-party technology providers in an effort to enable faster and more flexible procurement of innovative technology and services across 14 different science and technology areas. These include behavioural analysis, the ‘Internet of Things (IoT), robotics, future computing and cyber security, among others.
While it is encouraging to see new initiatives appear, which enable SME integration across the government enterprise, winning contracts can be just the start for a small firm.
Importantly, NVFi is not limited to the MOD. Rather, it is a government-wide initiative, where different departments can access the marketplace through Constellia. These include the Department for Science, Innovation and Technology (DSIT), the Foreign, Commonwealth and Development Office (FCDO) and the Home Office – and the list is growing.
So far, 12 contracts have been awarded, worth around £8 million, with an additional £65 million in estimated demand from cross-government teams looking to use NVFi to acquire capability. 90% of projects delivered by the Neutral Vendor Solution were from the micro and SME community, Kakaras said.
While it is encouraging to see new initiatives appear, which enable SME integration across the government enterprise, winning contracts can be just the start for a small firm. Helping to address the next stage of their journey is the Defence Tech Scaler.
The Defence Tech Scaler
While the Defence Tech Scaler is an initiative from Defence Digital (the MOD department driving digitisation across defence), rather than a Commercial X one, Kakaras has noted that it is important to highlight because it helps companies transcend the challenges of exploitation and scale. Since winning a contract is often just the beginning of a lengthy process, which includes onboarding and meeting strict security standards, she added that ‘it’s not the end of the gauntlet’.
Launched in May by John Healey, Secretary of State for Defence, the Defence Tech Scaler is designed to function much like the Amazon Web Services (AWS) marketplace – where thousands of independent software vendors are listed for purchasers – by bringing more established organisations together on a single platform, Kakaras explained. Initially for software, data and Artificial Intelligence (AI) providers, the initiative plans on expanding in the future.
For the military, the platform offers a way to identify established suppliers more easily. The first companies on the platform are Adarga, Hadean, Oxford Dynamics and WhiteSpace, which already hold enterprise agreements with the MOD. The initiative also gives approved suppliers an accreditation badge, so buyers can recognise their authenticity. The North Atlantic Treaty Organisation (NATO) announced something similar in June as part of its ongoing procurement reform, called the ‘NATO Innovation Badge’.
Stamps of authenticity
These NATO badges act as a stamp of authenticity for their capabilities, John Ridge, Chief Adoption Officer for the NATO Innovation Fund, told DSEI Gateway. They demonstrate to potential investors or buyers that their technology has been used by NATO.
When asked about this, Kakaras explained that the team is adopting something similar, saying: ‘We want to give companies a “defence ready” stamp…and we’re also looking to promote even within our marketplace where they’ve already got those rubber stamps’. Even if the company has not necessarily worked with the United Kingdom (UK), but with one of its allies, it is still valuable for the military to be aware of that, she added.
Ultimately, it is promising to see Commercial X taking agile procurement seriously – actively exploring new approaches, challenging mindsets and embracing a willingness to experiment, even if it means breaking things. However, its greatest challenge may lie in shifting the MOD’s deeply rooted cultural resistance to change, and ensuring SMEs understand the myriad paths of entry into defence.
Olivia Savage is the Editor in Chief of Clarion Defence and Security, organisers of DSEI and other defence events. Previously, she was a Senior Defence Journalist at Janes, specialising in electronic warfare, uncrewed systems and space.
DSEI Gateway is a dedicated membership platform for SMEs, providing exclusive and tailored insights into military requirements, actionable opportunities, and access to key decision makers. For more information, please visit here.
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