New Zealand Defence Force broke conflict of interest rules

[Dave Homewood]

Isaac Davison Isaac Davison is a NZ Herald political reporter.

New Zealand Defence Force broke conflict of interest rules

12:22 PM Friday Feb 19, 2016


There was no evidence of illegal activity in the deal with Miltech Limited to maintain the RNZAF's lifejackets. Photo / Nick Reed

The New Zealand Defence Force's awarding of a contract to a company owned by serving personnel broke conflict of interest rules, the Auditor-General has found.

However, there was no evidence of illegal activity in the $114,000 deal with Miltech Limited to maintain the Royal New Zealand Air Force's lifejackets, Auditor-General Lyn Provost said in a report released today.

Former Defence Minister Jonathan Coleman asked the Auditor-General to look into the matter in June 2014 after it emerged that the Auckland-based company was owned and run at the time by senior air force non-commissioned officer Graham Berry.

Mr Berry's job at NZDF was to oversee the maintenance division, which meant he was tasked with servicing lifejackets and other equipment.


In a summary of her report, Ms Provost said her office found no evidence of illegal activity in the temporary deal with Miltech.

But the arrangement between NZDF and the company "did not comply with NZDF rules about secondary employment because of Person A's close involvement with Miltech at that time".

Person A is understood to be Mr Berry.

"The situation continued until June 2014, when Person A relinquished his interest in Miltech after concerns were raised in Parliament."

The Auditor-General was critical of Air Force bosses, saying that if their rules around secondary employment had been properly applied the arrangement with the company would not have gone ahead.

"It is not clear to us that Person A or Air Force command properly considered or applied the rules about secondary employment at relevant times".

The arrangement also broke public sector procurement requirements and good practice principles, because the process was rushed, informal, undocumented, and failed to take into account alternative providers.

In addition, the approving officer for the contract was not aware that serving officers were linked with Miltech.

"In our view, the procurement process was inadequate, not enough attention was given to the range of risks, and because of the involvement of NZDF personnel in the vendor company, the decision was inappropriate," Ms Provost said.

She said the Defence Force had accepted that the deal with Miltech was "defective", and that the way it handled matters with its personnel was neither timely nor thorough.

Her office made a series of recommendations, among which was a requirement to make sure there were no other unapproved contracts with NZDF personnel.

- NZ Herald

www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11592361

[apteryx]

Great choice of image by the Herald! Not sure the article is about events of more than 20 years ago, when this photo might have been relevant. Does the blame go to automatic image sourcing, or choice of a photo by someone who hadn't been born when the Blunty was in service?

[thelensofhistory]

This kind of thing was bound to happen once aspects of the NZDF started to be privateised in the 90's. Along similar lines The privatisation of the logistics supply chain has left a dangerous capability cap because of the lack of preexisting supplies in the event something unexpected happens in the South Pacific or Asia. In short stupid actions can only produce stupid results.

[atgv]

It was my understanding that secondary employment is forbidden by serving NZDF members unless given permission by higher ups.

[Dave Homewood]

When I was in the RNZAF some of the guys I served with that had families and mortgages had to have a second job simply to live because the RNZAF wages were so poor back then. I worked with a guy who packed parachutes by day and delivered Pizza Hut pizzas at night. I recall when I was at Woodbourne virtually every restaurant and bar in Blenheim had RNZAF staff members working there. I understand that the wages are actually a bit more competitive now.

[30sqnatc]

Feb 19, 2016 13:23:33 GMT 12 thelensofhistory said:

This kind of thing was bound to happen once aspects of the NZDF started to be privateised in the 90's. Along similar lines The privatisation of the logistics supply chain has left a dangerous capability cap because of the lack of preexisting supplies in the event something unexpected happens in the South Pacific or Asia. In short stupid actions can only produce stupid results.

Now now the civilian consultants who always know better than uniformed staff tell us 'just in time logistics' is the best business practice. Which is great when you know exactly when the time is you will need something.

Paul

[atgv]

Feb 19, 2016 19:42:36 GMT 12 Dave Homewood said:

When I was in the RNZAF some of the guys I served with that had families and mortgages had to have a second job simply to live because the RNZAF wages were so poor back then. I worked with a guy who packed parachutes by day and delivered Pizza Hut pizzas at night. I recall when I was at Woodbourne virtually every restaurant and bar in Blenheim had RNZAF staff members working there. I understand that the wages are actually a bit more competitive now.

Well can't speak for other parts of the country, but hard to imagine there'd be too many CPL equiv or below in Auckland with both a family and a mortgage, even on a double income..

[Dave Homewood]

Auckland house prices have definitely gone nuts since the good old days when I was there in the RNZAF.

However now that NZDF is hiffing people out of the Married Quarters due to more Government short-sightedness at Base Auckland who knows, some will probably need a second job to pay the civvie rent?

[thelensofhistory]

Paul if you are interested in or have a background in logistics I just finished reading the above book. The book is analytical in style as such the role of logistics is prominent as is the role Air Power played in the allied victory over Japan. 

[isc]

I,v just finished reading Desmond Scott's two books, "Typhoon Pilot" and "One More Hour", and I was impressed by his opinion of the effect air power had on the second world war, I suppose he could be said to be a bit biased toward the part the Typhoon, and Tempests played. My little rant, these were the A-4's of 70 years ago, an essential in modern warfare. isc

[Dave Homewood]

The A-4's were the Typhoons and Tempests of 40 years ago...

[lesterpk]

www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11642693

The navies from 14 nations were gathering. But New Zealand ships almost didn’t go.

One man in a shed was all that stood between New Zealand's navy being able to put to sea or being tied up at port, according to NZ Defence Force documents.

That man is former Royal New Zealand Air Force Warrant Officer Richard Mosley, who toiled by himself in a shed in suburban northwest Auckland to make ready a key element in the navy's readiness to put to sea - lifejackets.

Until he stepped into the breach in 2014, the Royal New Zealand Navy faced the prospect of being stuck in port during a major Hauraki Gulf military exercise involving navies from 14 countries.

It should be a story of legend - the Air Force specialist who kept the navy afloat - but the urgent solution to the navy's problem led to a two-year inquiry that exposed flaws in the way the NZ Defence Force hired the company for which Mosley worked.

Serving Air Force staff owned that company, Miltech Ltd and others connected to it. Three months ago, the Auditor-General criticised NZDF processes after looking into how Miltech was hired to work on lifejackets in 2014.

The Auditor-General's inquiry said there was "an urgent demand from the navy for life jackets that were necessary to sustain operations".

Documents released through the Official Information Act show how close it came, with one key Air Force figure in the maintenance chain saying it was an "urgent decision" to hire Miltech Ltd because there were "risks of stopping ships from sailing" because there was not enough serviced lifejackets.

The papers obtained by the Herald on Sunday show the navy knew it needed a new arrangement to service the lifejackets a year before Labour's Phil Goff raised questions in Parliament over the Miltech contract.

In June 2013, a briefing was sent to the Commander of Logistics saying the air force staff at the service centre were over-loaded with work. "Given current manning levels, Air is unable to continue to support the servicing of navy and army jackets."

Air Commodore Mark Brunton, then group captain, wrote to the Devonport Naval Base commander Captain Fred Keating in November 2013: "It has now been many months since we advised our capacity has expended. We agreed to maintain our service while other arrangements were made by navy but it doesn't appear anything has changed. There has been a bunch of postings and we no longer have the capacity to assist."

Keating responded: "Can wait until New Year."

But still nothing happened, leaving HMNZS Canterbury's executive officer emailing navy logistics command in February 2014: "I have just been informed that the ship is unable to have our lifejackets serviced. Have I been informed correctly?"

The executive officer said "we will require to have the vast majority of our lifejackets serviced within the next week to ensure they do not fall out of date during the very closely monitored MCMEX", referring to the upcoming military exercise.

Miltech Ltd was hired almost immediately and Mosley went to work.

The NZDF papers show the "shed", as military police called it in the report that cleared all involved, was considered a top-class facility that produced quality work.

Defence minister Gerry Brownlee, who was briefed on the issue and who received the Auditor-General's report, would not comment.

Papers show he raised questions with the defence force over Miltech Ltd's continued work while the inquiry was underway, although no issue had been raised over its quality.

A spokesman for the NZDF said it was "not aware of any occurrences where lifejacket availability has affected RNZN ships from carrying out programmed outputs".

"However, the NZDF would not compromise the health and safety of personnel by not ensuring that all ships had the full complement of safety equipment, complying with manufacturers' standards, before undertaking a task."

- Herald on Sunday

[Dave Homewood]

So basically the Navy commander has screwed up royally by his total lack of planning and action, and tried to deflect blame onto the RNZAF and the company owner?

This seems to be as a direct result of Coleman's failure to properly fund the NZDF when he was Minister of Defence?

Have to wonder if this is the real reason those ships are mothballed...

[ErrolC]

Navy obviously repeatedly stuffed up, but I don't see were they influenced the starting or contents of the Auditor-General's report?

[suthg]

And it seems it came down to staff numbers, postings, retrenchment by attrition, and budget cutbacks. You can't keep cutting back without something seizing up!