Statement of Intent 1 July 2009 - 30 June 2012
Managing in a changeable environment
Assessing the broader operating environment
Decisions concerning capability requirements involve large sums of money, and influence our foreign and security policy options for decades. Equally, decisions concerning the deployment of military forces involve the lives of service people, and difficult policy choices. Taking a long-term view of the broader operating environment informs our advice on these issues, ensuring that our military capabilities remain aligned with our requirements, and that the Defence Force is deployed in ways that best support our interests.
Review 09 will incorporate a thorough assessment of the conditions affecting defence over the coming years. This assessment, and the subsequent white paper, will influence all facets of the Ministry’s work.
Review 09 also presents an excellent opportunity to deliver defence policy, capabilities and operations that deliver on the Government's defence objectives while remaining affordable within the current constrained fiscal environment.
The Ministry’s position within the security sector
The Ministry of Defence is a security sector agency. Our assessment of the drivers influencing defence is developed in conjunction with our partner security agencies, principally the New Zealand Defence Force, the Ministry of Foreign Affairs and Trade, and the Department of the Prime Minister and Cabinet. Our partner agencies will provide a high degree of input into Review 09.
The Ministry supports efforts to achieve a whole of government approach to managing security. The challenge is to align defence policies, capabilities, and operations to the foreign policy environment and to wider government objectives. As part of this, the Ministry will support a sectoral approach to outcome achievement and reporting.
Our close relationship with the Headquarters of the New Zealand Defence Force is formalised through a series of committees and shared processes that manage capability development and other defence business. Routine informal collaboration complements the formal arrangements.
Ministry of Defence officials liaise routinely with staff from the Ministry of Foreign Affairs and Trade, the Treasury, and the Department of the Prime Minister and Cabinet. We participate in central government security and crisis management arrangements.
Strategic Management
The Ministry is seeking to develop a more systematic and broadly based approach to its strategic planning. This approach will focus, in particular, on the formulation of strategic direction, outcomes and output statements, and the alignment between these and outcomes from elsewhere in the security sector. This work will lead to a clearer articulation of the Ministry’s goals, sharper performance measurement, and better management of risks. As a first step in this process, this statement of intent aims to provide a better description of the value the Ministry adds to the achievement of the Government’s objectives.
Specific challenges facing the Ministry of Defence
Ensuring the Ministry has access to the knowledge, skills and experience necessary for it to produce its outputs.
The Ministry’s principal resource is its staff. In certain specialised areas – legal, financial, commercial – the Ministry has been under resourced, in part because of the difficulty in a competitive labour market of recruiting and retaining staff in a small organisation. This risk has been mitigated by contracting services from outside.
Both the finance and acquisition functions of the Ministry have been reviewed in various contexts recently. As a result, and pending further examination in Review 09, the finance team is being regeared and the acquisition team has been amplified with new permanent appointments. A special adviser was appointed in respect of Project Protector issues. Consideration is being given to best way to deliver legal advice on procurement.
Ensuring Crown projects are delivered on time, within budget and according to the functional requirements specified.
The most significant financial and capability risk the Ministry faces is in the delivery of individual acquisition projects to the New Zealand Defence Force. Delays in introduction, and cost overruns can greatly affect the New Zealand Defence Force's ability to generate military capability. We are boosting our ability to manage risk in the acquisition area. Individual acquisition projects undergo comprehensive risk analysis, mitigation and management. The Acquisition Division maintains certification to ISO 9001 for quality management processes and outcomes. The Capability Management Framework has provided a direction for establishing mechanisms for defining the capabilities required of the New Zealand Defence Force. It also provides a means for identifying the risks and opportunities prior to any equipment procurement.
Specifically, on the three principal components:
- Cost
Major defence procurements are all embarked on with fixed price contracts. Forward foreign exchange cover is taken out for the whole of the life of the contract. - Functional requirements
One of the major tasks of Acquisition project directors and project managers is to ensure that the capability being contracted for is delivered. The performance of project directors and managers is monitored by the Deputy Secretary Acquisition and Secretary in this regard. - Time
If delays occur they are mitigated by securing an advantage through some other dimension of the contract or by using the mechanisms in the contract. The operational impact on the NZDF is managed through consultation and coordination.
Business continuity
The Ministry has a Business Continuity policy and plan which have been tested in a scenario exercise. Feedback on the scenario exercise has provided suggestions for continuing improvements which it is intended to complete in conjunction with an upgrade of the Ministry's disaster recovery environment.
Disaster Recovery within the Ministry of Defence is currently focused on a localised disruption to Information Management and Technology services. This is to be extended to a regional disaster case scenario to support the critical functions of the Ministry and Government. The areas of main focus will be in protecting and maintaining access to the Ministry's core information and providing accessibility to key staff.
Ensuring Review 09 is completed while business as usual continues
The Ministry has been tasked with undertaking a defence review in the course of 2009/2010. 12 staff of the Ministry will be the core team for the review (including most of the strategic policy advisers and analysts) and most other staff will be involved in the review one way or another. The team’s resources will be extended through attachment of personnel from the NZDF, and by the use of external consultants. The additional costs that will be incurred by undertaking the review will be funded by increases in Vote Defence for 2008/09 and 2009/10 only.
The Senior Management Group of the Ministry will monitor at least monthly the resource allocation between Review 09 on the one hand, and the continuing work of the Ministry on the other - both output (acquisition/capability, evaluation and international defence relations) and support (corporate, finance).
