NZDF General discussion thread

[Shanesworld]

A coupe of background points relating to this and following comments. I should stress up front that I am not a procurement/contracting specialist - I was simply wheeled in to give technical or policy advice when required.

First point - all government departments contract a hell of a lot of stuff, all the time. Most of it is pretty unglamorous - building rentals, cleaning, new furniture, vehicle leases, research contracts, even foreign aid projects. This is a big change from the 'old days', when most of this stuff was done in-house.

MinDef is unusual in that is buying more complex bits of hardware (LAVIII vs Toyota Corolla), and crucially, it is not buying them nearly as often.

Most depts have an 'adequate' ability to do the routine stuff, but struggle with big one-off jobs. MinDef is not alone in this regard.The tendency of the best procurement staff to get poached at (much) higher wages by the private sector doesn't help in this regard.

(Given the amount of contracting underway all the time, I am surprised at how little attention successive governments have given to increasing the capability of the public service in this area. This is at least in part due to the supreme uselessness of the State Services Commission, a well-intentioned body that would be out of its depth in a puddle.)

I suspect (repeat - I have no inside knowledge) that much defence procurement work is done by 'generic' procurement people who would normally be working on photocopier leases, fleshed out with military personnel on postings to Wellington, who will be assumed to be technical experts. Given the gaps between major NZ procurements, it would be very hard to build up a core of experienced specialist military procurement people.

There is probably inadequate recognition that big procurement projects are a complex specialty in their own right, and military training isn't necessarily an preparation for running such a project team. The independent review of the Canterbury purchase certainly hinted at pretty significant cultural/ attitude issues.

How to fix it? Basically, apply more money! MinDef probably need to hire in more military procurement specialists, or at least people who have worked in major private sector project management (e.g. major engineering contracts). Unfortunately, with a fixed budget MInDef is probably unable to do this, without laying off a big chunk of existing staff. The the wages required to hire outside specialists would also blow the salary structure all to hell.

I still think it might be worth it - hire some heavyweight procurement specialists as contractors for the duration of a project, with built-in penalty clauses and bonuses. But that might be a step too far for NZDF/MinDef and the wider public service, who would have to work alongside people earning far far more and subject to different conditions.

As to 'who' does procurement well, Singapore and Israel are considered the gold standard. Israel has its own peculiarities (either home-built or US equipment effectively gifted) while Singapore is effectively a one-party state not subject to sudden policy changes. Take away these differences, and I suspect every country has projects that work and utter screw-ups. For cultural reasons, Aust/UK/Canada would probably be best, but none of these exactly have unblemished track records. Especially Canada!

Much speculation above, few hard facts. Feel free to disagree.

Good points though.
Maybe if we look at successful programs rather than nations.

Didn't know Singapore was single party. Makes sense given there steaming progress. And Israel does have the home advantage like you say and a closely integrated population to IDF equipment and its usage.

What programs has NZDF had so far that were failures, mixed bag or well delivered? C9 7.62 and Marksmans weapon procurement seemed ok to me.
Proj. protector has had issues but delivered something useful which is better than some of the UK's efforts (FRES and MR4) sadly.
HMNZ Charles Upham, Kahu, Sirius, Pini's, Mog replacement, NH90 and A109 could be case studies. Overseas could provide a heap also.

Maybe if Ministry distilled these lessons from our recent history and from our allies and developed a course with Vic Uni. (location) maybe in an elective paper and forgo the international (Dublin accord I think) accreditation and use it in house. Would that provide some initial theory to new procurement people- a starting point. And experienced pers something to build upon on? Curriculum to include mistakes to avoid, template to follow, other govt elements concerns and procedures to observe, tech experts to find and incorporate in the project how to secure feedback after purchase and integration, stuff like that? Have that condensed and let them study initially for three to six months with no distractions. And keep a relationship going with Vic to provide replacements once they leave for the big pay cheque in private sector?

Or if they weighed the use of current model, consultants or some process like above to develop a procurement body with an Academic body and evaluated this with Treasury (well they'll always be there) and SSC?

Could be a waste of money (I'm good at that) or could be prudent preparation for systems with 40 years of service ahead of them

 

[40 deg south]

Good points though.
Maybe if we look at successful programs rather than nations.

Maybe if Ministry distilled these lessons from our recent history and from our allies and developed a course with Vic Uni. (location) maybe in an elective paper and forgo the international (Dublin accord I think) accreditation and use it in house. Would that provide some initial theory to new procurement people- a starting point. And experienced pers something to build upon on? Curriculum to include mistakes to avoid, template to follow, other govt elements concerns and procedures to observe, tech experts to find and incorporate in the project how to secure feedback after purchase and integration, stuff like that? Have that condensed and let them study initially for three to six months with no distractions. And keep a relationship going with Vic to provide replacements once they leave for the big pay cheque in private sector?

Could be a waste of money (I'm good at that) or could be prudent preparation for systems with 40 years of service ahead of them

All sensible stuff, Shane. And to give credit where its due, it turns out the govt has set up (in partnership with Vic Uni) a 'NZ Procurement Academy'.
NZ Procurement Academy | Procurement.govt.nz

Not aimed at Defence, but if successful should improve procurement standards across the public sector, which includes defence. Will only work if they get the right curriculum and lecturers, and even then the supply of graduates will take a while to filter through the system. Still, at least they get points for trying.

I'm unsure whether MinDef would be better to develop in-house specialist training modules in addition to this generic procurement stuff, or put the same money into hiring in people who already have the skills/experience. Either could work, I guess it is a question of cost effectiveness.

Speaking of procurement, the most recent issue of Army News reveals that the MAN truck purchase was brought forward 3 years, presumably so we could benefit from piggy-backing on a much larger British Army order. The cost was $135 million. Given the military budget is effectively fixed, does this mean $135 million worth of projects are going to have to move three years in the other direction? I can't see how else it could be done absent a cash injection, which we know isn't going to happen.

 

[40 deg south]

Didn't know Singapore was single party. Makes sense given there steaming progress. And Israel does have the home advantage like you say and a closely integrated population to IDF equipment and its usage.

To be fair to Singapore, they have elections that are frequent and fair. However, the People's Action Party has won every one of them since independence in 1965. Depending on who you believe, this could mean
a) The PAP are awesome
b) The PAP gently tweak the system to keep in the drivers seat.

The correct answer is probably
c) Both of the above

They have been losing seats to the Workers Party in recent by-elections, it will be interesting to see what happens if there is a serious prospect of the government changing.

 

[ngatimozart]

To be fair to Singapore, they have elections that are frequent and fair. However, the People's Action Party has won every one of them since independence in 1965. Depending on who you believe, this could mean
a) The PAP are awesome
b) The PAP gently tweak the system to keep in the drivers seat.

The correct answer is probably
c) Both of the above

They have been losing seats to the Workers Party in recent by-elections, it will be interesting to see what happens if there is a serious prospect of the government changing.

Under Lee Kuan Yu it could've been argued that Singapore was ruled by a beneficial dictatorship.

 

[ngatimozart]

It seems that the Defence Technology Agency have been doing some commercial work that is paying dividends. They have designed and had manufactured locally, a diver training system that the USN has bought that includes a composite mine that can simulate various types of mines. If the trainee really gets it wrong and the mine "goes off" it plays the Last Post through speakers. NZDF - Global Interest In Defence Force Innovations

It is good to see the DTA having the ability to develop systems and tools that others such as the USN have found a need for.

 

[gf0012-aust]

It is good to see the DTA having the ability to develop systems and tools that others such as the USN have found a need for.

The USN does an annual visit to Aust and NZ to review new technologies with sister science and mil-science orgs

Usually includes USN (major) USMC, USAF and US Army plus reps from DARPA, Navsea, US State Dept reps and US Dept of Commerce

 

[recce.k1]

Radio NZ news reporting that defence expenditure will rise from next year (details to be announced in next year's budget) and "will commit to additional funding out to 2030".

Radio New Zealand : Hourly News : 14 Nov 2013 : Radio New Zealand News (unsure if the above URL of the 0700 news bulletin will remain come next bulletin or be overwritten but the audio starts at 4'36").

Defmin states that Defence Mid-Point Rebalancing Review (DMRR) which was commissioned to develop a robust long term funding plan has been completed (and has had involvement from Treasury and DPMC).
beehive.govt.nz - Government remains committed to sustainable, affordable future Defence Force

Things are looking up (especially in terms of the initial Defence Review funding shortfall of the higher end capabilities needing replacement in the next decade eg P-3's, ANZAC Frigates etc)!

Now ... how to go about introducing new capabilities ....?

 

[ngatimozart]

Radio NZ news reporting that defence expenditure will rise from next year (details to be announced in next year's budget) and "will commit to additional funding out to 2030".

Radio New Zealand : Hourly News : 14 Nov 2013 : Radio New Zealand News (unsure if the above URL of the 0700 news bulletin will remain come next bulletin or be overwritten but the audio starts at 4'36").

Defmin states that Defence Mid-Point Rebalancing Review (DMRR) which was commissioned to develop a robust long term funding plan has been completed (and has had involvement from Treasury and DPMC).
beehive.govt.nz - Government remains committed to sustainable, affordable future Defence Force

Things are looking up (especially in terms of the initial Defence Review funding shortfall of the higher end capabilities needing replacement in the next decade eg P-3's, ANZAC Frigates etc)!

Now ... how to go about introducing new capabilities ....?

It all looks good in the speech but in the end it comes down to actual dollar value and % of GDP. That's in the short term - pre 2014 election. What happens if there is a change of govt either next election or the one following? Going on recent history if it involves Labour, then odds on they deep six such an arrangement purely on ideological grounds.

 

[Adzze]

It all looks good in the speech but in the end it comes down to actual dollar value and % of GDP. That's in the short term - pre 2014 election. What happens if there is a change of govt either next election or the one following? Going on recent history if it involves Labour, then odds on they deep six such an arrangement purely on ideological grounds.

I imagine that it would depend on how much influence the Greens have in any future government. They seem to be the party most ideologically opposed to defence spending for all except purely peaceful purposes.

Still, it's encouraging that after a fraught cost-cutting exercise, the current government is still planning ahead with the big ticket items. The best hope would seem to be a robust economy in the meantime.

 

[ngatimozart]

I imagine that it would depend on how much influence the Greens have in any future government. They seem to be the party most ideologically opposed to defence spending for all except purely peaceful purposes.

Also the Labour Party has had a policy since around the 1960s of less defence. Apparently after they won the 1972 election, the only reason they kept the Skyhawks was because they had them foisted upon them. Phil Goff is the current Defence spokesman and Trevor Mallard is still in the Parliamentary party. Those two will hang onto to their seats in parliament until the bitter end and they still have followers even though they are now seen as the old guard. According to the media the party is still factionalised and fractured.

Still, it's encouraging that after a fraught cost-cutting exercise, the current government is still planning ahead with the big ticket items. The best hope would seem to be a robust economy in the meantime.

I will echo a call from I think the RAN thread in that we need a long term Defence procurement plan and I would add the comment that the funding for that plan should be ring fenced. I define long term as 10 year plus preferably from now out to 2030. However that requires support and agreement across the political spectrum which in turn implies that the pollies have some understanding of the why, where, when, and what of a defence force.

 

[John Newman]

Also the Labour Party has had a policy since around the 1960s of less defence. Apparently after they won the 1972 election, the only reason they kept the Skyhawks was because they had them foisted upon them. Phil Goff is the current Defence spokesman and Trevor Mallard is still in the Parliamentary party. Those two will hang onto to their seats in parliament until the bitter end and they still have followers even though they are now seen as the old guard. According to the media the party is still factionalised and fractured.

I will echo a call from I think the RAN thread in that we need a long term Defence procurement plan and I would add the comment that the funding for that plan should be ring fenced. I define long term as 10 year plus preferably from now out to 2030. However that requires support and agreement across the political spectrum which in turn implies that the pollies have some understanding of the why, where, when, and what of a defence force.

Ng, I came across this on the Defensenews website today, don't know if you have seen it yet:

Defense Minister: NZ Continues Fleet Upgrades, Commitment to Security | Defense News | defensenews.com

The NZ Def Min was addressing the NZ Defence Industry Association and was updating progress on a number of air force projects, those details are in the article. One thing I did see that was interesting was this statement:

With a clear strategic vision in place, the next big challenge was funding. The government, he told delegates, had identified a $537 million shortfall in operational funding by 2021 and a $4 billion shortfall in capital funding by the mid 2020s.

When the current NZ defence budget is around $3 Billion, it's one thing to be half a Billion short of operational funding by 2021, but the big number, a $4 Billion shortfall for capital funding by the mid 2020's, that's a worry, (that's the equivalent of the ADF's capital funding being short around $35 Billion, or the equivalent of the reported cost for the 12 Collins sub replacements!).

If those numbers aren't addressed in any meaningful way in the coming years in future defence budgets then it sounds like to me that firstly certain capabilities will have to be reduced or mothballed because of a shortfall in operational funding and the bigger worry would be that if the capital funding issue isn't addressed that some future capabilities will not happen. Am I reading that right?

I don't want to sound all doom and gloom, but would it be fair to say that it will probably be hard enough for the Right side of politics in NZ to be able to address the shortfall, but if the Left of NZ politics get's into power there's probably even less of a chance that those funding issues would be addressed?

As for your comments regarding putting a 10+ year plan in place and fencing it off from the rest of Government spending, I couldn't agree more, but will it happen in NZ or Oz? Not bloody likely!!

 

[ngatimozart]

Ng, I came across this on the Defensenews website today, don't know if you have seen it yet:
Defense Minister: NZ Continues Fleet Upgrades, Commitment to Security | Defense News | defensenews.com

The NZ Def Min was addressing the NZ Defence Industry Association and was updating progress on a number of air force projects, those details are in the article. One thing I did see that was interesting was this statement:

When the current NZ defence budget is around $3 Billion, it's one thing to be half a Billion short of operational funding by 2021, but the big number, a $4 Billion shortfall for capital funding by the mid 2020's, that's a worry, (that's the equivalent of the ADF's capital funding being short around $35 Billion, or the equivalent of the reported cost for the 12 Collins sub replacements!).

If those numbers aren't addressed in any meaningful way in the coming years in future defence budgets then it sounds like to me that firstly certain capabilities will have to be reduced or mothballed because of a shortfall in operational funding and the bigger worry would be that if the capital funding issue isn't addressed that some future capabilities will not happen. Am I reading that right?

Interesting, the Minister didn't mention those figures in his release. $4 billion is a big hole and to put into a NZ context thats probably 4 x A400s, 3 x Absaloms and maybe a LPD inclusive of Term of Life costs.

I don't want to sound all doom and gloom, but would it be fair to say that it will probably be hard enough for the Right side of politics in NZ to be able to address the shortfall, but if the Left of NZ politics get's into power there's probably even less of a chance that those funding issues would be addressed?

You are right about the left of kiwi politics. They would probably fund C130 replacement and maybe the Absaloms with basic weaponry. Don't think they'd be 100% keen on an amphibious task force. I heard a whisper from a contact that the younger greens coming through & replacing the old guard, are more pragmatic about defence and would not be against a FFH replacement, as long as it didn't include surface - surface missiles.

As for your comments regarding putting a 10+ year plan in place and fencing it off from the rest of Government spending, I couldn't agree more, but will it happen in NZ or Oz? Not bloody likely!!

Maybe if we had a benificent dictator and a M2 .50 cal was mounted on the Speakers Rostrum to remind the pollies of their place in the scheme of things

 

[John Newman]

Interesting, the Minister didn't mention those figures in his release. $4 billion is a big hole and to put into a NZ context thats probably 4 x A400s, 3 x Absaloms and maybe a LPD inclusive of Term of Life costs.

You are right about the left of kiwi politics. They would probably fund C130 replacement and maybe the Absaloms with basic weaponry. Don't think they'd be 100% keen on an amphibious task force. I heard a whisper from a contact that the younger greens coming through & replacing the old guard, are more pragmatic about defence and would not be against a FFH replacement, as long as it didn't include surface - surface missiles.

Maybe if we had a benificent dictator and a M2 .50 cal was mounted on the Speakers Rostrum to remind the pollies of their place in the scheme of things

Mate, don't get me started on the f*&kin Greens, especially the loonies here in Oz, young or old! If I used the words I'd like to use to describe them, I'd probably be in trouble with the Mods for the use of extreme language!

Actually one thing I read a long time ago was that the founders of the 'original' Greens who started the movement here in Oz, when it was more of an environmental movement, have all dis-associated themselves because of the extreme left political views the current crop are full of.

One Green Senator, Lee Rhiannon is a perfect example, both her parents were members of the Communist Party of Australia, when she grew up she then joined the Socialist Party of Australia, one of here big 'claims to fame' was this little beauty:

She edited the Soviet-funded and backed newspaper Survey from 1988 until it ceased publication in 1990. One opinion piece by Rhiannon in Survey mourned the fall of the Berlin Wall and expressed fear at the prospect of the disappearance of the German Democratic Republic and the reunification of the two Germanies. This piece received renewed attention from Rhiannon's political opponents during her campaign for the Australian Senate twenty-one years later. She joined the Greens in 1990.

Anyway, glad to hear that your younger Greens are reported to be less extreme, hopefully!

And yes, I'm all for a Benevolent Dictator, (as I've mentioned before), put em in for 10 years, get things done, at the end of 10 years take them out the back and dispose of them and put the next one in for another 10 years to get even more things done!!

 

[t68]

And yes, I'm all for a Benevolent Dictator, (as I've mentioned before), put em in for 10 years, get things done, at the end of 10 years take them out the back and dispose of them and put the next one in for another 10 years to get even more things done!!

Knowing our luck we would end up bob brown

 

[John Newman]

Knowing our luck we would end up bob brown

Noooooooooooooooo!!!!

If we did, he would have to be taken out and dealt with (eg, put against a wall and shot) at the beginning of the 10 year term and not the end!

 

[ngatimozart]

Noooooooooooooooo!!!!

If we did, he would have to be taken out and dealt with (eg, put against a wall and shot) at the beginning of the 10 year term and not the end!

The problem with shooting all these pollies is the copious quantities of paper work involved and some poor sod has to write out the environmental impact statement.

You could end up with the current Mayor of Toronto.

 

[ngatimozart]

I've been cogitating upon that $537 million loss in operational funding by 2020. It doesn't say how they arrived at that figure. The fiscal modus operandi at the moment for NZDF is that any platform replacement or acquistion has to be funded out of the annual budget without a cash injection from the NZG. So if that loss is based on current practice I wonder if part or all of it will be a result of the future acquisitions of the:

• Advanced Pilot Training Capability
• MEPT Capability
• Maritime Projection and Sustainment Capability (Endeavour Replacement Project)
• Littoral Operations Support Capability (LOSC) (Resolution & Manawanui Replacement Project)
• Steyr upgrade or replacement project

This list is off the top of my head. So the question is how are they going to address the operational shortfall? That i presume is what the Defence Mid-Point Rebalancing Review (DMRR) is attempting to address and we won't know anything until the budget next year which is also election year.

I wonder if this is part of the new sourcing rules the Minister was talking about

VOLUNTARY INVOLVEMENT OF LOCAL INDUSTRY

The Crown's policy and guidelines on procurement are stated on the website HomePage | Procurement.govt.nz. The respondent is to identify in its response to this RFT any activities that could be undertaken by it to afford domestic industry full and fair opportunity to compete for involvement in the xxxxxx. Any resulting local industry involvement will not be a condition for awarding a contract, but may be written into the final contract.

The role of the Industry Capability Network (ICN) is to assist Government Agencies and major New Zealand and Australian projects to identify local industry with the capability to meet their procurement requirements.
Involvement of the ICN accelerates the identification of suitable companies while ensuring the widest possible search locally – this can result in savings in time, money, manpower and the potential for an improved local solution with in-place through-life support.

The ICN is independent of both purchasers and suppliers, and to ensure impartiality the ICN does not get involved in commercial aspects of the procurement process and all decisions are the sole responsibly of the purchaser.

 

[ngatimozart]

How do you develop are cadre of people with the required skills for this role? Defence wouldn't make alot of capital purchases regularly and when they do its all at once across a myriad of areas. Then how do you maintain it? Which countries have a successful model we could pinch?
Singapore? Sweden maybe or Ireland?

This book is an excellent read and a must have when dealing with NZ acquisition policies during the 1990's and early 2000's It can be downloaded from the Australian National University for free: Greener P, 2009: Timing Is Everything in pdf or epub format. If you want a hard copy then it costs AU$19.95.

Abstract
The spectre of block obsolescence of major weapons platforms loomed throughout the 1980s, facing successive governments with significant challenges as they worked to make sustainable decisions on replacement or upgraded equipment for the New Zealand Defence Force.

This book identifies the critical factors that shaped and influenced defence acquisition decision-making processes from the election of the Fourth Labour Government in 1984 and the subsequent ANZUS crisis, through to the 11 September 2001 terrorist attacks on the United States and the following ‘war on terror’. It explores and analyses decision-making processes in relation to six acquisition decisions which have been made over a 20-year period. These are the decisions on the ANZAC frigates; the military sealift ship HMNZS Charles Upham; the second and third decisions on the ANZACs; the lease of the F-16 strike aircraft; the upgrading of the P-3C Orion maritime patrol aircraft; and the purchase of light armoured vehicles for the Army—the LAV IIIs.

Whilst many factors are brought to bear, this book outlines how it is that New Zealand’s own view of the world, external relationships, politics and political influence, and the timing of decisions are amongst the most significant elements that impact on the decision-making process, whilst individual actors play a significant part in shaping the process. Although there has been a great deal of publicity in recent years about rivalry between the Services and the place of bureaucratic politics, this book argues that nonetheless officials continued to work with rigour over time to provide the best judgement and advice possible to Ministers. Three out of six of the case studies which have been analysed—the ANZAC frigates, the upgrade of the P-3 Orions and the LAV III—have been implemented or are in the process of successful implementation. In each case, officials worked to ensure that they provided the Government of the day with the most appropriate advice upon which to base decisions, although that advice has not always been popular. Each case study demonstrates key aspects of the decision-making process, providing specific insights into the way defence decisions are made.

Whilst it covers a period since past it does give insights to the political side of kiwi defence procurement. I would argue not much has changed since, aside from the actors.

 

[40 deg south]

I wonder if this is part of the new sourcing rules the Minister was talking about

http://www.business.govt.nz/procure...g/government-rules-of-sourcing-April-2013.pdf

I think the link above may give the sourcing rules referred to, which covers the whole public sector. Big emphasis on best value over whole-of-life, rather than buy-cheap-and-regret-later.

All very worthy, but will only work if government fronts up with the money to buy wisely in the first place.

 

[40 deg south]

While I'm logged on, the 2013 Annual Report is now up on the MinDef website.

Annual Report 2013 Contents [Ministry of Defence NZ]

Its looking backwards rather than forwards, but plenty of detail about defence activities and costs over the past year.

Ngati - thanks for flagging the Greener ebook, should be an interesting read.