ICN assists local industry involvement on navy vessels

The Ministry of Defence's Project Protector involved building seven new ships to be owned by the Royal New Zealand Navy and used for a range of New Zealand government agency tasks, in addition to at-sea training for the Navy. When the tender to build the vessels went out (May 2003), it was agreed that there should be a level of New Zealand industry involvement - but only if it was cost-effective and met the required quality.

Reflecting revised Government Procurement Policy, there was no specific level of New Zealand Content, or offsets, prescribed.

"We used to request offsets for these big projects, requiring a certain amount of New Zealand content," says Gary Collier, Project Director for Project Protector at the Ministry of Defence. "We no longer can. New Zealand products and services must be utterly competitive to be selected for a project like this."

The aim was for the contract, which in July 2004 was awarded to Australian-based prime contractor Tenix (now BAE Systems), to include NZ$110 million of New Zealand industry content.

In fact, about $134.5 million was spent in this country, spread over 85 different companies. The ICN, with its goal of substituting local products for imported ones wherever possible, was integral to exceeding that target, Collier says.

"Without ICN, it simply would not have happened. They put Tenix in touch with appropriate New Zealand companies, and got domestic industry on the radar."

Kawerau-based Allied Industrial Engineering (AIE) was one of the domestic companies that benefited, winning contracts worth more than $1 million to make watertight doors for the Navy's new Off Shore Patrol Vessels as well as rudders and P brackets for its Inshore Patrol Vessels.

The ICN's ability to keep companies like AIE supplied with up-to-the-minute information was pivotal to them clinching work on Project Protector. Knowing what was coming up, who to contact, when and how, was pivotal to the firm being successful, according to AIE contracts manager Jevon Priestley.

"They gave us updated information and details of who the most appropriate people for us to speak to were," he said. "We had the opportunity in advance of the actual tender submissions to start to do some research because we knew what was coming up."

Whangarei based McKay Electrical was another company that benefited from ICN's involvement, winning a tender to supply electrical distribution systems for both Inshore and Offshore Patrol Vessels worth approximately $9 million.

Richard Harrison, the ICN Project Procurement Advisor worked on Project Protector to raise the prime contractor's awareness of New Zealand industry, as well as helping New Zealand industries to engage with the right people within the project.

"The project was important to help domestic businesses to upskill", says Harrison. "The challenge it provided brought greater innovation and technology development to our marine industry."

It also allowed for innovative solutions to be found from outside of naval shipping industries, he says. "Local Industry is now involved in the through-life support of these vessels. The typical maintenance cost for a ship is about 10% of the purchase price per year, so these maintenance contracts can be significant."

The ICN continues to work with many of the companies involved on other projects and opportunities ranging from marine, through to rail and energy, both in New Zealand and offshore.