New Zealand Defence Force – Brochure 2019

Who is the New Zealand Defence Force training partner of choice?

are.

en delivering training innovation for more than 70 years now. We are one of the world’s most focused training specialists, as evidenced by the company training more than 220,000 civil and wmembers every year.

New Zealand Defence Force: On the procurement frontline

hed CAE New Zealand Pty Ltd to develop, deliver and support world-class training and simulation the New Zealand Defence Force, and are proud to support the training and readiness of the NZDF ted training partner. CAE provides a range of simulation products and through-life training support platforms such as the C-130H, SH-2G(I), and T-6C. We are currently developing the NH90 training the Royal New Zealand Air Force, and will provide long-term training services upon delivery in

y-recognised training systems integrator, CAE is committed to providing the New Zealand Defence comprehensive training solutions designed to optimise safety, efficiency and readiness across the erprise.

.com.au

orldwide g partner ce

@CAE_Defence

CAE

@CAE_Defence

cae.com/defence-security

P R O J E C T PA R T N E R

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New Zealand Defence Force: On the procurement frontline WRITTEN BY A n d rew Wo o d s PRODUCED BY H ey ke l O u n i

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CPOstrategy talks to Paul Howard Assistant Chief Joint Defence Services, (Commercial) at NZDF, regarding its procurement transformation…

D

elivering a successful procurement programme in any industry or enterprise is

challenging. Add to that the sensitivity and reliability demanded of a military organisation based in one of the world’s most remote locations, and the challenges become significant.

The New Zealand Defence Force (NZDF) is the organisation which, in partnership with the Ministry of Defence, provides essential support

do everything: from Headquarters to the

to the delivery of the Government’s

camps and bases, to help them do their

national security interests. The person

procurement,” he explains. “The only

responsible for making sure that

thing we don’t buy are major platforms.

everything keeps flying, sailing and

We actually have a Ministry of Defence

rolling at the NZDF is Assistant Chief of

here, as well as the Defence Force, and

Joint Defence Services (Commercial),

they buy the ships, planes, military vehi-

Paul Howard. Howard looks after all

cles, etc., but it’s us who runs them,

Procurement activity across the NZDF,

including any long-term commercial

incorporating both its military and

relationships as well as the nuances of

corporate pillars, ranging from main-

those relationships and contracts.”

tenance, repair and overhaul (MROs)

Howard’s department is responsible

contracts for major platforms to consul-

for an annual spend of around $800m a

tancy support. “We literally get a call to

year, employing a team of procurement

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NZDF

reconfiguration. “It was very process driven,” he explains. “They’d made an attempt at category management and professionals and includes the Accounts

had had a number of reviews. In the

Receivable and P2P function too.

previous seven years, prior to my arrival,

“This is good for us, because it means

I think they’d had five different reviews.”

that we have a bit of a nursery, and a

The reviews, conducted by various

career path, for up and coming buyers,”

consultancies, were also fairly consist-

Howard explains.

ent in their summations that the

Howard has a wealth of experience

procurement department was a largely

working for government departments

transactional function and in need of

back in the UK and moved to New

a more strategic approach. In terms

Zealand in early 2015 looking for a new

of the implementations suggested by

challenge in a different environment.

the reviews, Howard believes some

The procurement landscape at NZDF on

were only ‘half done’. “So, I had cate-

Howard’s arrival in late 2015 was largely

gory managers,” he says, “but when I

transactional and in need of major

studied what they were actually doing, w w w.n zd f.mi l .n z

5

Who is the New Zealand Defence Force training partner of choice?

We are.

CAE has been delivering training innovation for more than 70 years now. We are one of the world’s most proven and focused training specialists, as evidenced by the company training more than 220,000 civil and defence crewmembers every year.

We established CAE New Zealand Pty Ltd to develop, deliver and support world-class training and simulation systems for the New Zealand Defence Force, and are proud to support the training and readiness of the NZDF as their trusted training partner. CAE provides a range of simulation products and through-life training support services on platforms such as the C-130H, SH-2G(I), and T-6C. We are currently developing the NH90 training solution for the Royal New Zealand Air Force, and will provide long-term training services upon delivery in 2020.

As a globally-recognised training systems integrator, CAE is committed to providing the New Zealand Defence Force with comprehensive training solutions designed to optimise safety, efficiency and readiness across the training enterprise.

caeaus@cae.com.au

Your worldwide training partner of choice

@CAE_Defence

CAE

@CAE_Defence

cae.com/defence-security

“We're very much moving towards agile procurement in terms of making sure that we know exactly what it is that we want from the market” — PA U L H O W A R D ASSISTANT CHIEF, JOINT DEFENCE SERVICES (COMMERCIAL)

some were acting more like contract

ensure that NZDF was getting the best

managers. In some instances, they

deals. “What I was finding was that the

were producing category strategies

focus of the team was on quantity, not

and category plans, in splendid isolation

quality which meant that basic errors

from the business sponsor or business

occurred followed by significant re-work

owner, or had no buy-in from the busi-

leading to frustrated customers who

ness to implement those strategies. In

saw us a roadblock. In fact, it seemed

some cases, we would find the opera-

that the premise of procurement was

tional procurement teams helping the

like a factory in how it had been set up

customer put something together to

and demonstrated from an organisa-

meet their needs but then the category

tional point of view, that procurement

manager would intervene and question

was perceived as just a process, not a

whether what they were doing was the

strategic function.”

right thing or not, in terms of the cate-

Howard discovered that a great

gory strategy. In some extreme cases

deal of the critical buying decisions in

they would play this out in front of the

NZDF were being taken elsewhere in

customer, who was sitting there think-

the organisation, often without any

ing, ‘What the devil’s going on?’”

input whatsoever from his team until it

Meanwhile, the procurement function

arrived to go through the procurement

was largely process driven with teams

assurance process which his team is

slavishly following process to produce

responsible for. “For example, a business

contracts but not necessarily providing

owner, usually having made their mind

the necessary commercial acumen to

up about what they were buying and w w w. n z d f. m il. n z

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YEAR ESTABLISHED

1990

REGION HQ

Wellington, NZ

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NZDF

from whom without coming to procure-

2016 marked something of a water-

ment first, would ask us to ‘assure’ their

shed for Howard and the NZDF, follow-

decision. This would lead to us looking

ing the release of the Defence White

at it and often rejecting it, which led to

Paper, which signalled a $21bn invest-

frustrated customers who were look-

ment in capability over the next 10 to 15

ing for us to tick a box for them, which

years, plus a regeneration of the Estate.

added to the perception that we were

The financial outlay included replac-

a roadblock, people that just got in the

ing two major aircraft platforms. “We

way of the Defence Force doing its busi-

have Hercules and P-3 Orion aircraft

ness. However, there was a recognition

for military movements and mari-

when I was recruited, that things proba-

time patrol, respectively. Following

bly needed to change.”

nearly 50 years of usage, we were

w w w.n zd f.mi l .n z

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going to buy brand new, latest generation aircraft. Just this year, the NZ

our act together.”

As procurement was then part of

Government have announced that we

the logistics organisation, a military

will be replacing our existing Hercules

commander (Commander Logistics),

C-130H aircraft with the C-130J Super

was the designated Chief Procurement

Hercules, following on from the deci-

Officer for the organization and so,

sion to replace the P-3 Orions with the

Howard had a number of conversations

P-8A Poseidon, and we will also take

with both the Commander Logistics and

delivery of our new Maritime Tanker/

Commander’s boss, the Chief of Joint

Fleet replenishment Ship HMNZS

Defence Services. “I decided to have a

Aotearoa in early 2021. We are also

tough conversation to illustrate that I

buying a new offshore patrol vessel

couldn’t necessarily provide the level

and will be completing a frigate system

of strategic procurement support that

upgrade in the next few years.”

the NZDF was going to need. I said to

The programme represented a massive challenge to the procurement team and Howard made it very clear that this was a step change and that procurement in NZDF would need to significantly change in order to enable a successful outcome.

“I said to my boss, at the time, ‘When these decisions were being considered, was any thought given to the level of commercial expertise required to ensure we got the best through life-support constructs for these modern complex platforms?’ And the answer was, ‘No, we didn’t but maybe we should have.’ It was a pivotal moment because we were going to have new aircraft and ships turning up in 4-5 years and in Defence terms, that wasn’t a lot of time to get 10

NZDF

them: ‘You’re going to call on us, and if

capability index was introduced which

we stay the same as we are now, we’re

assessed a number of elements that

not going to be able to do it, because at

assessed a Government Agency’s

the moment, we’re not fit for purpose.

procurement practice and capabilities. It

You’ll probably end up having to go out

was all about making sure you have the

to the market to get (a lot of) expensive

right people; the right commercial skills

contractors to do this work and your

and strategic positioning. This assess-

capability simply won’t rise.’”

ment, which is carried out annually,

Around the same time, the New

also contributes to the NZ Treasury’s

Zealand government had been revising

Investor Confidence Rating (ICR)

their approach to procurement capabil-

which is used to rate NZ government

ity: ‘You can’t make good investments

Agencies abilities (A-E) to be able to

unless you’ve got good procurement

make substantial investments. “If you’re

people and systems.’ So, a procurement

getting an A or a B rating, then you’re

w w w.n zd f.mi l .n z

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NZDF

“…we’re talking about a vision towards World Class and making sure that we are professional in our dealings” — PA U L H O W A R D ASSISTANT CHIEF, JOINT DEFENCE SERVICES (COMMERCIAL)

doing really well, which means that you are trusted to spend significant amounts of taxpayers’ money, without necessarily having to go cap in hand to the Treasury every time,” Howard explains. This presented something of a ‘perfect storm’ for change so Howard persuaded the Chief that his team should come out of the logistics organisation, to create a more strategically focused function that understood, and was capable of, developing and delivering a pipeline of strategic procurement projects. In mid-2017, Howard started to report directly into the Chief of Joint Defence Services who is a member of the NZDF Board.

Since then, Howard and his team have made great strides as procurement has pushed itself into a more recognised and strategic position at NZDF. Its PCI (Procurement Capability Index rating) was 2.7 (out of 4) in September 2017. “I think that was reflective of the fact that we didn’t have anything majorly going wrong because we’d fixed quite a few things that were not quite right but in reality, we’d only done some tinkering around the edges. However, I said to my boss, ‘Being “OK”, when you’re just about to spend $21-22bn is probably not where you want to be or w w w.n zd f.mi l .n z

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should be’ and he agreed.” The PCI at

and Communications and Information

NZDF has since moved up to 3.1 within

Systems branch. They work with those

12 months and has just been reassessed

business units very closely and spend

at 3.35. “That’s actually gone past the

a lot of time onsite with them, some-

target we were set for this year,” he

times attending their management team

enthuses.

meetings, as their Business Partner. I

As part of this overhaul, Howard

think we’ve done that so successfully

proposed a commercial improvement

that recently one of the portfolios had

program and went on a recruitment

their awards night and one of my people

drive. “I reorganised several of the

got nominated for one of their awards.

teams and ceased category manage-

It was a big effort to reconnect with

ment as a concept. I placed our focus

the business, to genuinely help them

back onto the business owners and

get what they need, when they need it

what they needed and how we were going to give it to them. I didn’t want to continue to allow them to go off and do commercial activity on their own, as they didn’t have the right level of expertise to do that, so we created the concept of Procurement Business Partners whose roles were to be multi-faceted. We needed to reconnect Procurement with the customer base, so that they understood that we were there to proactively support them; in certain cases, being fairly well embedded into some of their governance and structures. We called them Commercial Portfolio Managers and recruited senior commercial professionals covering Logistics Command, Capability Branch, Estates and Infrastructure 14

NZDF

Paul Howard Assistant Chief Joint Defence Services (commercial) Paul joined the UK Civil Service in 1982, moving into procurement in 1995.

Paul has led many multi-million dollar procurements, programmes and projects including delivering the award winning UK Schools Recruitment Service, The Mobile Infrastructure Project as part of the UK National Broadband strategy, the first WW1 Commemoration event management contract in Belgium (broadcasted live by the BBC) and a TFM contract for NZ Immigration’s new refugee resettlement centre in Auckland.

Paul’s career has seen him work in several UK Government Departments finishing as Commercial & Procurement Director for the Department for Culture Media and Sport before moving to New Zealand in early 2015.

Paul is a CIPS Fellow with Chartered status, a member of the CIPS Wellington committee and the NZ Procurement Excellence Forum.

Paul joined the New Zealand Defence Force in 2015, leading a large team providing strategic and and operational procurement, commercial and P2P services.

w w w.n zd f.mi l .n z

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and get public value; the other spin off

of creating their own procurement team

was to help stop them (even if they were

with the assistance of a consulting firm,”

unaware) from doing things that were

Howard explains. “I felt that was a false

risky for the business such as breaking

economy, to pay a consultant to develop

the NZ Government procurement rules

a separate team for them, when the

which are based on the trade agreements

money would be better spent on making

we have from around the world.”

sure that the existing procurement func-

The first department Howard and his

tion developed a commercial business

team connected with was ICT, which

partner approach and a delivery structure

was busy completely transforming the

that allowed us to get on with the right

organisation through a move to cloud-

level of advice.”

as-a-service. “They wanted to do a big transformation project and were thinking

From ICT, the business partner approach was rolled out to Capability,

“The PCI at NZDF has since moved up to 3.1 within 12 months and has just been reassessed at 3.35” — PA U L H O W A R D ASSISTANT CHIEF, JOINT DEFENCE SERVICES (COMMERCIAL)

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NZDF

Logistics and then Estates and

at the very beginning of procurement

Infrastructure. “On a holistic level, we’re

projects to maximize value. We’re very

still in the throes of doing that improve-

much moving towards ‘agile or lean

ment program. We are very much looking

procurement’ too, in terms of making

towards World Class, because I believe

sure that we know exactly what it is that

it’s very difficult to achieve World Class,

we want from the market and that the

especially for a public service organisa-

market is very well appraised of before we

tion because of the lack of a bottom line

actually pull the trigger on the procure-

and the inevitable political shifts that

ment process. We’re not quite there yet,

affect the organisation. So, we’re talk-

but we’re making great progress.”

ing about a vision towards World Class, making sure that we are professional in our dealings, and that we’re involved

w w w.n zd f.mi l .n z

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www.nzdf.mil.nz