Procurement Risk:
Very Low
Score:
88/100
Government Policy
Q57
100/100
Does the country have legislation covering defence and security procurement with clauses specific to corruption risks, and are any items exempt from these laws?
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This indicator is not assigned a score in the GDI. New Zealand does not have specific legislation covering defence purchases, although it is specified…
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In 2018, the Review of Defence Procurement Policies and Practices was released [1]. This review clearly identifies the steps and processes which defence procurements…
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Although possessing no specific Defence procurement legislation, a follow-up to an independent review conducted by Sir Brian Roche and PricewaterhouseCoopers, found New Zealand’s Defence…
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Q58
100/100
Is the defence procurement cycle process, from assessment of needs, through contract implementation and sign-off, all the way to asset disposal, disclosed to the public?
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Assessments of needs are conducted by the Ministry of Defence and are informed by the Defence White Paper 2016, in accordance with the Government’s…
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Detailed procedures, to include the procurement cycle, are publicly disclosed but they are not contained within one document. The Major Projects Reports provided the…
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All procurements must comply with the Government Procurement Rules (GPR). The GPR contain detailed information on individual policies relevant to particular rules, as well…
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Q59
83/100
Are defence procurement oversight mechanisms in place and are these oversight mechanisms active and transparent?
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According to the 2018 Defence Procurement Review and its Follow-up Review, internal procurement oversight mechanisms are formalised, and remain within the realm of the…
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The FADTC calls witnesses before it every year, including Service Chiefs and the senior Executives of the Ministry of Defence, and this includes the…
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The FADTC regularly releases information relating to procurement, though some information is collated by the MoD and NZDF and not the FADTC itself. This…
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Major Defence purchases are guided by Defence White Papers which provide long-term (up to fifteen years) Government expectations of the Defence [1]. This is…
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Apart from the Defence White Paper, the periodic Defence Capability Plans signal planned purchases. Defence Capability Plans are linked to the White Paper and…
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All Defence Request for Tenders are publicly available, without redactions, on New Zealand Government Electronic Tenders Service (GETS). Contract Award notices are also published…
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Data on actual defence purchases are released. Currently, one may identify successful bidders by viewing individual closed tenders on GETS. [1] The MoD website…
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Capability Gap and Requirements Definition
Q62
75/100
What procedures and standards are companies required to have – such as compliance programmes and business conduct programmes – in order to be able to bid for work for the Ministry of Defence or armed forces?
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All companies are required to comply with relevant New Zealand commercial law, public law, and sector specific legislation [1]. Suppliers must also be aware…
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In conducting its annual reviews and audits for the years 2015-19, the OAG has raised no serious concerns around contractor compliance in its briefings…
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Q63
100/100
Are procurement requirements derived from a national defence and security strategy, and are procurement decisions well-audited? Are defence purchases based on clearly identified and quantified requirements?
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Major Defence purchases are guided by Defence White Papers which provide long-term Government expectations of the Defence [1]. This is followed by Strategic Defence…
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The OAG conducts annual audits of the MoD and NZDF that appear in the respective Annual Reports [1, 2]. It also briefs the FADTC…
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Major Defence purchases are guided by Defence White Papers which provide long-term Government expectations of the Defence [1]. This is followed by Strategic Defence…
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Tender Solicitation, Assessment and Contract Award
Q64
NEI/100
Is defence procurement generally conducted as open competition or is there a significant element of single-sourcing (that is, without competition)?
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Government Procurement Rule 3 clearly states that all suppliers must be given an equal opportunity to bid for contracts, regardless of whether they are…
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The FADTC and OAG have the power to review all aspects of sourcing and procurements. In an example from the 2019/20 session on the…
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Q65
88/100
Are tender boards subject to regulations and codes of conduct and are their decisions subject to independent audit to ensure due process and fairness?
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Officials on tender boards are, like all employees, subject to regulations and codes of conduct (there is no separate code of conduct for procurement…
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Governance and oversight of the procurement process was achieved through the revised governance structure in November 2017. This established a Capability Governance Board (CGB)…
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The OAG releases information on managing conflicts of interest as stipulated under Section 21 of the Public Audit Act 2001 [1]. While the Auditor-General…
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Due to the heightened risk inherent in Military procurements, the Ministry of Defence’s Tender Board includes representation from Central Agencies, the presence of which…
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Q66
58/100
Does the country have legislation in place to discourage and punish collusion between bidders for defence and security contracts?
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The Commerce Act 1986 charges the Commerce Commission with oversight of anti-competitive behaviour. The act considers restrictive trade practices and provides a range of…
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In matters relating to restrictive trade practices, the Commerce Act 1986 allows the court, on application by the Commerce Commission, to order a person…
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Nothing could be found on the Commerce Commission Case Register to show evidence of collusion between bidders for defence and security contracts during the…
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The Commerce Commission and New Zealand Government Procurement both issue detailed guidelines to the public sector on matters relating to collusion and bid rigging…
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Contract Delivery and In-Service Support
Q67
88/100
Are there mechanisms and procedures that ensure that contractors meet their obligations on reporting and delivery?
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Rule 53 of the Government Procurement Rules states that “agencies must provide data and information to the Procurement Functional Leader on procurement activity including…
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Changes to contracts would be listed in the MoD’s Annual Reports and Major Project Reports, such as the Anzac Frigate Systems Upgrade [1, 2,…
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The MoD and NZDF advise that contract obligations on reporting and delivery are set out in the contract with the Crown, and failure to…
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No evidence of breach of contract has been found for major defence procurements during this assessment’s period of investigation. Such a stance is supported…
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Q68
100/100
Are there mechanisms in place to allow companies to complain about perceived malpractice in procurement, and are companies protected from discrimination when they use these mechanisms?
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Under Government Procurement Rules (Rule 50), a supplier may complain to an agency if it believes the agency has not followed the rules. An…
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All available information suggests that the process is effective, especially since the Commerce Commission acknowledged it had no information on any investigation, complaint, enquiry,…
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No evidence could be found to suggest that companies believe they will suffer retaliation for genuine complaints. Government Procurement Rules 2 and 3 specifically…
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Rule 44 of the Government Procurement Rules sets out reasons for excluding a supplier by an agency, including corruption and bid rigging. Rule 44…
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No evidence of undue evidence could be found on the Commerce Commission’s Case Register Index. It should be noted that “Defence” is not an…
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There is not enough information to score this indicator. It is undersood that no prosecution or sanctions have ever been brought (re: companies participating…
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Offset Contracts
Q70
100/100
When negotiating offset contracts, does the government specifically address corruption risk by imposing anti-corruption due diligence on contractors and third parties?
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Offset contracts are explicitly prohibited via legislation. As such, this indicator is marked “Not Applicable” [1].
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Offset contracts are explicitly prohibited via legislation. As such, this indicator is marked “Not Applicable” [1].
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Offset contracts are explicitly prohibited via legislation. As such, this indicator is marked “Not Applicable” [1].
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Offset contracts are explicitly prohibited via legislation. As such, this indicator is marked “Not Applicable” [1].
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Offset contracts are explicitly prohibited via legislation. As such, this indicator is marked “Not Applicable” [1].
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Agents / Brokers
Q73
NEI/100
How strongly does the government control the company’s use of agents and intermediaries in the procurement cycle?
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Under the Government Procurement Rules (Rule 23), third-party agents may be used, but their activities must comply with relevant regulations including the disclosure of…
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Due to the Government’s policy requiring third-party agents to comply with all standard procurement rules and principles, and because Defence has a policy of…
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Financing Package
Q74
50/100
Are the principal aspects of the financing package surrounding major arms deals, (such as payment timelines, interest rates, commercial loans or export credit agreements) made publicly available prior to the signing of contracts?
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All aspects of any finance arrangement and the payment schedule are covered under reporting requirements to Central Agencies and the Government prior to a…
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Seller Influence
Q75
NS/100
How common is it for defence acquisition decisions to be based on political influence by selling nations?
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This indicator is not scored in the GDI. There is nothing to suggest any untoward political pressure or influence on New Zealand Defence acquisitions.…
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This indicator is not scored in the GDI. As a result of shared history, culture, and geopolitics, Australia is New Zealand’s closest partner, both…
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This indicator is not scored in the GDI. Almost no acquisitions are granted as a result of domestic political pressures. Indeed, there is significant…
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