Issues in defence procurement


At the end of January last year I wrote about the governance issues raised over defence procurement, which were highlighted in an article by Geoff Cummings in a NZ Herald article.

Cummings wrote an excellent piece, unfortunately I did not seem to see the issues he raised get any significant traction.

I commented back then as follows:-

What we appear to have is a situation where governance appears to be lacking, not just in one instance but in several.

This situation should be causing alarm bells to ring and action to be taken.

These problems have affected and will continue to affect operational capability of the NZDF.  Arguably they have contributed to considerable additional cost on projects undertaken and the acquisition of assets which may well not fulfill all operational functions for which they were acquired.

What prompts me to re-visit the issue are the reports of the arrival of HMNZS Otago, part of the major assets acquired under the Project Protector programme for the Navy.

Otago had engine failure prior to acceptance, so had to have repairs prior to delivery. I have seen other reports indicating that the vessel is too heavy for the roles contemplated.

the ships had a weight problem – at about 100 tonnes overweight they could not sail in Antarctic waters as required.

  • So what is going on here?
  • Why are we accepting ships which cannot, it would appear, perform their full role requirement?
  • Who is responsible for these problems? Are there issues of competence within the Ministry? After all there were problems with the Upham, then with Canterbury and now with Otago and sister ship Wellington. Is there a systemic issue?
  • What action has been taken in respect of issues raised in Auditor-General reports and other matters which have been reported in the press?

We are spending very large sums of public money here, yet there seems to be no media activity to seek out the reasons why these issues seem to keep arising!

At the least I would expect questions to be raised on:-

  • governance
  • procurement process
  • Contract management
  • learnings from the programme
  • benefits achievement or lack thereof – for example are the ships fit for purpose
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