The New Zealand Ministry of Defence (MoD) is struggling to complete its major equipment acquisition programs despite introducing new capabilities to the NZDF.

The MoD’s Major Project Report (MPR) published in June 2023 has identified a lack of personnel and the long-term impact of COVID-19 as the main causes of delays to the finalisation and closure of its procurement projects.

Although some large platforms, such as the Royal New Zealand Navy’s Diving and Hydrographic Vessel (DHV) HMZNS Manawanui, are being brought into service and its two Anzac-class frigates have returned from an upgrade project in Canada, neither has achieved Operational Release. This stage allows new platforms and equipment to undertake the full range of operations.

Sarah Minson, Deputy Secretary for capability delivery at the MoD told ADM: “Missing a scheduled milestone does not necessarily mean that a capability is not available.” She explained that although some projects are rated red in the MPR because they didn’t meet their Operational Release date, those capabilities are in use and delivering.

According to the MPR a red rating means that the risks or issues could significantly degrade or prevent the ability to deliver project outputs, objectives and goals. Significant resource allocation or management effort is required.

The MPR measured the projects in terms of cost, schedule and capability. Minson said that the MoD is not willing to provide additional funds and it does not want the NZDF to lose capability, therefore it puts pressure on scheduling when problems arise.

There are 12 major projects covered in the MPR: Four projects have been classed as red for their delivery schedules. The Anzac-class frigate systems upgrade and DHV are included in this category along with the delivery of an NH 90 helicopter simulator and the Operational and Regulatory Aviation Compliance Sustainment (ORACS) project.

ORACS will provide an Automatic Dependant Surveillance-Broadcast (ADS-B Out) capability so NZDF aircraft more regularly broadcast GPS position, identity and status information to meet civil aviation regulations for safer flying, and it will provide enhanced communications and navigation systems.

Delivery of the Bushmaster Protected Vehicle – Medium has been classed as Amber; with the acquisition of the P-8A Poseidon maritime patrol aircraft, Network Enabled Army, Frigate Sustainment – Communications, and the introduction of the tanker HMNZS Aotearoa under the Maritime Sustainment Capability (MSC), all classed as Yellow. Just three are green.

The staffing issues relate to the lack of qualified NZDF personnel available to fully introduce these capabilities. The high attrition rate in the NZDF workforce is a serious issue that the MoD is trying to stop as it has impacted on the service’s ability to provide capability.

 “There are less people available. For certain we move people – both uniform and civilian – around to the highest priority projects, because we don’t have 100 per cent that we need,” Minson said.

Updating ADM on the projects mentioned in the MPR, Minson said that Stage Two modifications of HMNZS Manawanui will be completed and Operational Release achieved by the end of the year. The modifications include the addition of a small arms and explosives magazine, a ship alarm and public address system and the installation of a diver’s ladder.

Delays to the completion of large hangar infrastructure at RAAF Base Ohakea to support the new P-8A Poseidon MPAs was caused by supply chain issues and COVID-19 lockdowns. However, Minson said the P-8As can be used operationally because temporary facilities are being used to house the aircraft. The fourth and final aircraft arrived in New Zealand on 17 July.

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Regarding the Anzac-class frigate upgrades. HMNZS Te Kaha completed its upgrade in Canada that saw the installation of the SeaCeptor anti-air missile vertical launch system (VLS) - only for the VLS to be removed once entering dry dock in New Zealand for the replacement of the ship’s engines. Minson said that SeaCeptor was designed for easy removal and the engine work had always been planned to take place in New Zealand as the most cost-effective way for that work to be done.

Achieving Operational Release for the pair of frigates has been a slow process. Minson confirmed that Te Kaha completed its first phase of Operational Test and Evaluation (OT&E) prior to starting its overhaul. She said that HMNZS Te Mana has “taken over” and will complete the OT&E phase by the end of 2023 and is fully available for tasking by government.

The frigates are also due to complete an external communication upgrade project. The critical design review has been completed and a NZ$50m contract was signed with British company SEA on 7 July 2023 with a build phase to start shortly. Elsewhere the Operational Release of Aotearoa is almost complete and the MSC project is at the final paperwork stage, meaning that the tanker is fully available for operational tasking with no other work to do.

However, although rated green in the MPR, progress on the Fixed HF Radio Refresh (FHFRR) system used for long-range communications with ships, land forces and aircraft, has stalled. The MPR said that a Factory Acceptance Test was due in the 1Q this year, but Minson said that the program was experiencing delay. FHFRR was to be delivered by Babcock and Rohde & Schwarz by the end of 2023 to upgrade the existing 1980s vintage infrastructure and systems, but Minson explained that a revised schedule is not yet in place, “We are working with the vendor to get us back on track,” she added.

Also rated green is the delivery of five new C-130J-30 tactical transport aircraft under the Future Air Mobility Capability – Tactical. In May, Minson attended the wing mating ceremony, attaching the wings to the fuselage of the first NZDF aircraft on the production line at Lockheed Martin’s factory in Marietta in Georgia. The program is on schedule and expected to achieve Initial Operational Release in 2024-25 and Operational Release at the end of 2025.

Minson confirmed that the NZ Army’s Network Enabled Army program, another green rated project, is in the procurement phase for the Reconnaissance and Surveillance element of the project following the release of a Request for Proposal in May 2022 and an evaluation of shortlisted bids was completed earlier this year. “We’re anticipating that will then follow very quickly with equipment delivery and a very short phase between the delivery and reaching an Initial Operating Capability,” she said.

Under the ORACS Phase 1(a) program the NZDF aircraft due to be fitted with ADS-B Out technology were completed by 31 December 2022. Meanwhile, Minson said that work on fitting ADS-B Out to the NH 90 helicopters under Phase 1(b) was to be confirmed with the vendor, Airbus, and the project will be re-baselined around a new schedule.

All the design work has been completed for ORACS Phase 2(a) for an updated comms and navigation system with implementation due to start on the NZDF’s Boeing 757 transport aircraft before moving on to the NH 90s.

On the delivery of the Bushmaster vehicles, although the initial batches have been received, Minson said this experienced a delay because of supply chains impacted by COVID-19 at manufacturer Thales. This means that an Interim Operational Release won’t be achieved until July 2024. Minson said that an Operational Release could not be confirmed until after the MoD initiates the procurement of a communications outfit for the vehicles later this year. This will either be in September 2025 or later depending on the schedule arranged with a selected vendor.