What are the principles relating to the incorporation of terms?

Answer 1

Principles relating to involvement of local (New Zealand, Australia and Singapore) industry

OutlinePrinciples and policy relating to local industry involvement in defence purchasing will be in accordance with overall government procurement policy. Government Procurement PolicyThe Government's procurement policy is stated in the Government Procurement in New Zealand Policy Guide for Purchasers available on the Ministry of Economic Development (MED) website (www.med.govt.nz) and is based on the following principles:

• best value for money over whole-of-life
• open and effective competition
• full and fair opportunity for domestic (New Zealand) suppliers
• improving business capabilities, including e-commerce capability
• recognition of our bilateral obligations to Australia (CER) and Singapore (CEP), Chile and Brunei and our trade policy interests in open and transparent Government procurement markets
• offsets (in the sense of measures used to encourage local development by requiring domestic content) will not be imposed, sought or considered as a factor in the qualification, selection, evaluation or award of the contract. Commercially viable offsets that are freely offered may be accepted.

Read the Government Procurement in New Zealand Policy Guide for Purchasers report (available from the MED website, www.med.govt.nz)

Local Industry InvolvementAny programme involving local industry is voluntary, must be commercially sustainable and not increase the price of the project. However, tenderers are encouraged to examine opportunities for the following reasons:

• participation by local industry has the potential to reduce the cost of the procurement
• participation by local industry has the potential to reduce the through life cost of the ownership of the equipment purchased.

To fully evaluate bids on a whole-of-life, value for money basis, the Ministry of Defence has a legitimate need to obtain information on the origin and local content of the goods and services offered, as required by general procurement policy. Therefore, each tenderer will be required to provide details of any proposed local industry programme.

Domestic (New Zealand) OpportunitiesThe Government's procurement policy approach supports its sustainable industry and regional development objectives, through enhanced identification of competitive opportunities for domestic enterprises and their capabilities to exploit those opportunities. It does not however, allow the Ministry of Defence to use its purchasing as a direct lever for industry or regional development, for example, through domestic price preference or mandatory offsets (requirements on Government buyers to obtain commitments from overseas buyers to assist domestic industry). Industry Capability NetworkWithin New Zealand the Industry Capability Network (ICN) provides assistance to potential prime and subcontractors within major projects, including Defence. The service includes:

• identifying capable local industry that can compete against offshore suppliers, for specific purchasing requirements
• facilitating contact and exchange of information between major project purchasers and local suppliers
• maintaining a thorough knowledge of the current and potential capability of New Zealand industry and, through its links with the ICN's in Australia, information on Australian industry capabilities.

The ICN does not get involved in supplier selection or purchasing negotiations. However potential prime contractors can benefit from the free, confidential, timely and accurate matching service the ICN provides.

ContactIndustry Capability Network

Project Procurement Advisor (Defence)

Level 15, Majestic Centre

100 Willis St

PO Box 2878

Wellington

New Zealand

Phone: +64 4 816 8398

Email: enquiries@icn.govt.nz

Website: www.icn.govt.nz

Local Industry Programme DeliverablesAny local industry programme offered by a tenderer and accepted by the Crown will become a contract deliverable.

Payment milestones will be allocated to the successful achievement and delivery of the local industry programme.

Regular reporting of actual progress against forecast progress of achieving the successful delivery of the local industry programme will be incorporated into the periodic overall project programme reviews.

OffsetsThe Ministry of Defence will not seek offsets, however tenderers may voluntarily make offset proposals. The Government recognises that commercially viable proposals may offer worthwhile and economically sound benefits for New Zealand. Government Electronic Tender ServiceAll Ministry of Defence major competitive tenders are advertised on the Government Electronic Tender Service (GETS). This is a free internet based tendering system used by all government departments and a wide range of other agencies. Potential primes and local industry interested in Defence opportunities are encouraged to register at www.gets.govt.nz (Government Electronic Tender Service website). Contact