Delivering Defence capability

The Ministry of Defence and the New Zealand Defence Force (NZDF) have a shared accountability for the Defence Capability Management System. Capability in this setting is defined as “the personnel, equipment, platforms, and/or other material that affect the capacity of New Zealand to undertake military operations”.

The Capability Management System operates across all phases of the capability project life-cycle from strategic policy, to identifying what is required to deliver it, and then purchasing, introducing, operating, and eventually disposing or replacing it. The people who make up this system come from both the Ministry and the NZDF. The aim of both organisations, working together, is to operate a Capability Management System that delivers the right capability on time and to budget using best practice in all activities.

Ministry’s role in managing Defence capability

While the Secretary of Defence (the Secretary) and the Chief of Defence Force have separate formal accountabilities, they are jointly responsible and accountable for the effective functioning of the Capability Management System as an end-to-end system.

The Secretary leads and is accountable for the strategic policy, capability development, and procurement phases of the Capability Life Cycle, and the Chief of Defence Force leads and is accountable for the introduction into service, in-service and disposal phases. A Capability Management Board, which the Secretary and the Chief of Defence Force co-chair, exercises these responsibilities collaboratively. The Capability Management Board provides strategic governance across the military capability life cycle, focused on portfolio-level risk management and decision-making.

The Capability Management Framework describes the processes, roles and responsibilities which make up the Capability Management System. The Framework requires the Ministry and the NZDF to work collaboratively to ensure integrated, end-to-end management of the capability process.

The Capability Delivery Division has primary responsibility to lead the multi-disciplinary teams that define, develop and deliver military capability for the NZDF which meets the Government’s Defence policy objectives. These multi-disciplinary teams are made up of personnel from the NZDF and the Ministry. The accountability for delivery of military capability on time, within budget and meeting Government’s expectations is through the joint governance structures. Areas of particular responsibility for the Defence Capability Division include source selection, contract negotiation and management and project management. It also includes responsibility for liaison with industry.

The estimated value of major military capability projects either currently underway, or planned through until 2030 is around NZ$20 billion, with individual capital equipment projects generally having a whole-of-life cost in excess of $15 million.