Annual Report for the year ended 30 June 2004
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Part 3: Departmental financial statements (continued)
Output Class D3 - Management of equipment procurement
4. Acquisition of direct fire support weapon (area) for the Army
The procurement of automatic grenade launchers will provide land forces with the ability to engage targets at a range of up to two kilometres.
|
Target |
Delivered |
Subject to Government approval, the intention is to:
- enter into a contract for the acquisition of this equipment by 31 December 2003
- further project milestones, including delivery, will be known once a contract is awarded.
|
- A Request for Proposal was conducted in April 2003, and evaluation of the received proposals has identified a preferred contractor subject to due diligence.
- The due diligence process has been delayed twelve months at the request of the United States. A contract has still to be awarded.
|
| Financial summary of pre-acquisition costs charged to departmental output class - Management of equipment procurement as at 30 June 2004 (GST inclusive) |
|
$ |
|
| Budget for pre-acquisition costs |
225,000 |
|
| Expenditure to 30 June 2004 |
- |
|
5. Acquisition of very low level air defence radar for the Army
This project will purchase an alerting and cueing system (VACS) for the Army Mistral very low level air defence system which is already in service. |
Target |
Delivered |
Subject to Government approval, the intention is to:
- enter into a contract for the acquisition of this equipment by 31 December 2003
- further project milestones, including delivery, will be known once a contract is awarded.
|
- Following due process and direction, contract negotiations were concluded in February 2004 and a contract signed by the Minister of Defence in May 2004.
- Delivery of the alerting and cueing system, consisting of radars, command post and weapon terminals will occur in July 2006.
- Delivery of the interrogators to be mounted on the Mistral launchers is expected in December 2005.
|
| (a) Financial summary of pre-acquisition costs charged to departmental output class - Management of equipment procurement as at 30 June 2004 (GST inclusive) |
| |
$ |
|
| Budget for pre-acquisition costs |
130,500 |
|
| Expenditure to 30 June 2004 |
56,003 |
|
| (b) Financial summary of project costs charged to non-departmental appropriations as at 30 June 2004 (GST inclusive) |
|
$ |
|
| Project approval |
13,728,375 |
|
| Foreign exchange variances to date and forecast to complete |
565,074 |
|
| GST |
1,716,047 |
|
| Total approved cost |
16,009,496 |
|
| GST exclusive |
|
|
| Expenditure to 30 June 2003 |
- |
|
| Expenditure 2003/04 |
1,630,655 |
|
| Future commitments and forecasts |
12,647,117 |
|
|
14,277,772 |
|
| GST |
|
|
| GST to 30 June 2003 |
- |
|
| Expenditure 2003/04 |
6,918 |
|
| Future commitments and forecasts |
1,711,593 |
|
|
1,718,511 |
|
| Total forecast cost to complete |
15,996,283 |
|
- Foreign exchange variances on actual expenditure to 30 June 2004 is unfavourable by $9,129 due to the purchase rates for the EUR currency being less than the EUR exchange rate used in the Cabinet paper to obtain financial approval.
- EUR approval rate = 0.51873
- EUR average rate achieved = 0.51570
- Due to worse forward rates for future commitments and forecasts than the exchange rates used in the Cabinet approval, the project is expected to achieve an unfavourable foreign exchange variance of approximately $565,074.
- Commitments are valued at an average of the exchange rates of forward contracts still to be settled, plus the actual exchange rates for currencies in the bank.
- Forecasts are valued at a current market exchange rate.
- EUR approval rate = 0.51873
- EUR forecast average rate = 0.49397
6. Upgrade and refurbishment of C-130H aircraft (Project Pegasus) for the Air Force
This project will extend the life of the Royal New Zealand Air Force C-130H Hercules aircraft by upgrading the aircraft systems and undertaking some structural refurbishment work. |
Target |
Delivered |
Subject to Government approval, the intention is to:
- complete evaluation of tenders by 31 March 2004
- following a submission to Government to negotiate and award a contract, further project milestones will be known.
|
- A Request For Tender closed in October 2003.
- In March 2004 four companies were invited to a Best and Final Offer, which closed in May 2004, and current activity is focused on the evaluation of these offers. This work has taken longer than originally planned.
|
| Financial summary of pre-acquisition costs charged to departmental output class - Management of equipment procurement as at 30 June 2004 (GST inclusive) |
|
$ |
|
| Budget for pre-acquisition costs |
416,250 |
|
| Expenditure to 30 June 2004 |
202,665 |
|
7. Upgrade of P3 mission systems (Project Guardian) for the Air Force
This project will upgrade the mission systems and the communication and navigation systems on the P-3 Orion maritime patrol aircraft. |
Target |
Delivered |
Subject to Government approval, the intention is to:
- complete evaluation of tenders by 31 March 2004
- following a submission to Government to negotiate and award a contract, further project milestones will be known.
|
- Tender documentation was released to companies in June 2003 and tenders closed in October 2003. An evaluation of these tenders was completed in March 2004 and the preferred tenderer, L-3 Communications Integrated Systems, invited to submit a best and final offer.
- Options will be presented to the Government late in 2004.
|
| Financial summary of pre-acquisition costs charged to departmental output class - Management of equipment procurement as at 30 June 2004 (GST inclusive) |
|
$ |
|
| Budget for pre-acquisition costs |
416,250 |
|
| Expenditure to 30 June 2004 |
269,571 |
|
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