Auditor-General's Report On LAV III Only The First Step

ACT Finance spokesman Rodney Hide said today that the Auditor General's report into the acquisition of the Light Armoured Vehicles raised more questions then it answered and could be viewed only as a first step to providing properly for New Zealand's Defence Forces.

"The report is devastating. It declares the project to be:

'Poorly defined';

With a 'lack of clarity on the number of vehicles required';

The 'research of the market [was] deficient';

'Use of essential criteria restricted the scope for competition';

'There was no strategic management of the project';

'The MoD failed to consult appropriately';

'Relationships between the MoD, the NZDF, and Army were dysfunctional';

'Pursuit of the project diverged considerably from Cabinet approvals in a number of respects';

'There was insufficient documentation of some key decisions'; and,

'The significant capability requirements associated with the acquisition of 105 LAV IIIs were inadequately assessed before the decision'. "The Auditor-General's report confirms what ACT has been saying for over a year. The problem with the report is it does not go far enough.

"It holds no one to account for the $700 million debacle. And it gives no confidence that the taxpayer is getting value for money or that our soldiers will be best served by the purchase of 105 LAV IIIs.

"The process was dysfunctional, the tender screwed, and Cabinet was sidelined. It's inconceivable that such a process would hit the jackpot and reach the right decision.

"Heads should role. The first head on a pike should be Minister of Defence Mark Burton's. He has ducked Parliamentary scrutiny and accountability for the LAV III purchase process for the entire time that he's been Minister. If he had fronted up to Parliament, we wouldn't have this debacle.

"The Auditor-General simply can't conclude that the purchase of 105 LAV IIIs is a good option for our Defence Forces. He is not qualified and hasn't got the results of a proper process to go by.

"At stake is $700 million and the lives of our soldiers.

"The other tenderer and potential tenderers must rightly be aggrieved with the New Zealand government for engaging in such a shonky process for such a significant purchase. The damage done to the government's international reputation is significant. There may well be a legal case that the government has to answer for and there may well be claims for recompense for the Henschel Wehrtechnik company that has clearly committed considerable resources to a tender that it thought was legitimate.

"Here's what now must happen:

The LAV III purchase should be canned and the tender re-let properly (the purchase is not as far advanced as the F-16 purchase which Prime Minister Helen Clark unilaterally canned); The decision makers responsible for the debacle should be identified and held to account; A Select Committee inquiry conducted into the process of defence procurement to ensure that such a debacle never happens again. "The cost of the LAV III purchase spiralled up enormously and $200 million of the spiral is explained simply because of the unique specifications New Zealand made. That's a lot of money. We should be buying our military hardware "off-the-shelf" and not making special runs for our defence forces. The savings then are considerable.

"I believe a considered answer to our defence needs would be fewer wheeled armoured personnel carriers, and upgrade of the M113s, and with new helicopters with the savings to support our troops," Rodney Hide concluded.

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