As an observation, the UK defence sector is both good and bad for the MOD.
From experience, the MOD's MoR with regard to procurement means that the innovative SME's usually have to sub-contract through a prime such as BAe et al who add an additional layer of margin; then QinetiQ appear to add cost, sorry, add value, through often nugatory testing procedures. There is risk in dealing direct with the SME's, but the costs would often be so much lower.
While all this is going on, everyone is flying from meeting to meeting business class, which is going to end up wrapped in some defence project spend at some point.
That said, despite the inefficiency, the UK does have a high degree of innovation when it comes to defence.