Defence Long-Term Development Plan (LTDP)
(October 2008 Update)
4. Managing the LTDP
- The Defence Capability Management Framework (outlined below) is the key process used by Defence to ensure that the LTDP remains a core decision making tool for the Government and that projects are well managed and consistent with government policy.
- The LTDP is updated regularly to provide the best information possible to inform decisions on defence acquisitions and the budget cycle. LTDP updates and accompanying reports to Ministers may be warranted:
- by the availability of new information;
- whenever acquisition proposals are submitted for the Government’s consideration;
- when significant financial or policy developments occur;
- by the need to support the financial impact of NZDF asset revaluations; and
- by the need for Ministers to consider the overall context of total planned acquisitions with a clear view of priorities, risks and trade-offs.
Capability Management Framework
- The Capability Management Framework (CMF) is a joint Ministry of Defence/ NZDF governance and management system for capability development. The CMF outlines responsibility, accountability and processes for identifying capability requirements, capability definition, delivery of capability – including acquisition, introduction into service, maintaining in service, obsolescence and disposal.
- The CMF guides the capability development process starting with broad estimates of capability requirements and rough estimates of costs. At each step in the capability development process more information is added resulting in requirements and costs gaining greater fidelity. The CMF also allows HQ NZDF, single Services and the Ministry of Defence to plan for, and allocate appropriate resources to, those projects that have a higher priority on the LTDP.
- Ministers must also have confidence that projects are well managed and that acquisition activity is consistent with the Government’s direction. This is achieved by the Ministry of Defence and the NZDF following the processes outlined in the CMF. These include:
- Project Initiation: Ministerial Note. On the completion of preliminary work within Defence, the Minister of Defence is invited to note that work is to commence on a LTDP project.
- Initial Gate: Approval to Initiate. The outcome of the Definition Phase is the Initial Gate Investment Case. This presents a high level cost-benefit and risk analysis of the status quo and other conceptually different options. The analysis is submitted to government seeking its Approval to Initiate a capability project and conduct a detailed assessment of an agreed set of options.
Following approval, the options are explored. The exact equipment to be acquired to meet the capability requirements has still not been decided at this point. Cost and delivery estimates developed at this stage are, therefore, still significantly uncertain, albeit somewhat less uncertain than those made when approval to initiate was sought. - Main Gate: Approval to Commence Acquisition. Following assessment of capability options, the Main Gate Investment Case is prepared. This describes in detail the proposal for investment, supported by links to strategy, a risk analysis and options for mitigating risk, a cost-benefit analysis, an implementation or procurement plan, and a specification of expected performance.
The exact equipment to achieve the capability needed has not been decided at this point, but real options for the kind of equipment to be acquired have been identified and examined. While Defence will make an assessment of potential solutions and their possible costs, the most cost effective solution is only identified once industry has been formally approached in the next phase.
Once Cabinet’s approval to commence has been given, the market will be approached and, generally, a process of competitive tendering will be undertaken. Industry will be invited to propose solutions to meet the capability requirement, as expressed in a set of functional performance specifications that set out what the capability is to achieve. Defence does not call for tender against specific or identifiable products. - Approval to Negotiate: Following an evaluation of proposals or tenders, Defence will seek Approval to Negotiate with potential supplier(s). This may include seeking approval for the NZDF to acquire all other functional components of the capability described in the proposal.
- Approval to Commit: Once negotiations with the preferred tenderer are complete, government approval is sought to commit funds. The approval to commit contains the financial authority that specifies the amount to be spent on the acquisition (usually the contract price and Defence’s associated project management costs).
- Below is a diagrammatic representation of the development of LTDP projects consistent with the requirements of the CMF.
Diagrams are used in this update to indicate the status of projects not yet in the acquisition phase, with shading indicating the stage which the project has reached.
View text equivalent of above image.
- The CMF is to be reviewed to ensure that projects on the LTDP are defined, costed and presented to Ministers in accordance with the Government’s new Capital Asset Management principles.
Network Enabled Capability Strategy
- The networking of military capabilities is essential for a modern defence force. Reflecting developments in this field the NZDF introduced its Network Enabled Capability Strategy (NEC) in 2007. This strategy was introduced in recognition of the need to use modern information technology to link sensors, decision makers and weapon systems to help people, units and platforms work together more effectively to achieve the NZDF Joint Effect. The NZDF NEC recognises that there are four key component capabilities namely: infrastructure, Command and Control (C2) systems, equipment, and sensors. Future capabilities (new assets, replacements or upgrades) within the NZDF network will be required to operate effectively regardless of location, platform or operational partner.
- Infrastructure projects underpin all future NEC developments so there is a need for such projects to progress ahead of, or in parallel with, the C2 equipment and or sensor system projects. In recognition of this requirement the NZDF is intending to initiate projects that will deal with network architecture, fixed networks, and mobile access to a range of broadband communications systems. Such projects include Joint Communications Modernisation and NZDF Satellite Communications Capability. Collectively, these projects when completed will deliver a modern global communications system which is estimated to cost around $100 million to be implemented over the next 5 to 10 years.
- The NZDF also needs to be able to collate, process, and disseminate a wide range of information as rapidly and securely as possible. Collectively, the NZDF has characterised this processing system as the Joint Command and Control System (JCCS). A programme of work to implement JCCS is currently being developed and will be based on discrete components. Whilst the core component will be the C2 system, the collective components will enable the NZDF to process and disseminate information quickly. The JCCS Programme is expected to take up to five years to implement at an estimated cost of $35 - $55 million.
- In parallel with the infrastructure projects and the JCCS programme, systems will be developed that will enable information to be processed and analysed. Such systems include, or are a part of, the following projects:
- P-3 Mission Management, Communication, and Navigation Systems Upgrades;
- ANZAC Class Self Defence Upgrade; and
- Land Command & Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance.
