Optimising New Zealand Industry Involvement in the New Zealand Defence sector

Additional info

This report found that over 80% of operating expenditure (day-to-day costs) was spent in New Zealand. In comparison, a much lower proportion of capital expenditure (hardware and other equipment) is made to New Zealand suppliers (around 30%), so it is this area in which there is much greater room to increase the involvement of New Zealand industry.

The report made three recommendations:

1. Apply and improve whole-of-life costing in key stages of the Defence capability process. In other words, when planning to buy new equipment, think about both the cost of buying the equipment, and also the long-term cost of maintaining and upgrading it. When asking for tenders, information provided to industry needs to be very clear what whole-of-life costs need to be included in the tender.
2. Improve Defence purchasing processes and practices to optimise New Zealand industry involvement. For example, request a New Zealand Industry Engagement Plan as part of all large tenders, and require suppliers to track and report on expenditure on New Zealand subcontractors.

Improve Defence’s relationship with the defence industry, for example, develop a website that suppliers can use to make enquiries and Defence can use to provide information on future tenders and tender processes. 

ISBN: 978-0-478-27870-5 (Print)
ISBN: 978-0-478-27871-2 (Online)

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