Region ripe for defence contracts

MP Mark Mitchell has worked on some high-risk contracts. Photo / Michael Cunningham

The camp was attacked by terrorists several times as scientists searched mass graves for evidence to help convict Saddam Hussein, but nobody was killed or injured. What sounds like the opening of a Hollywood movie was actually from the opening address for the New Zealand Trade and Enterprise "How to win international business" in Whangarei on Monday. Christine Allen writes.

Through Northland's skills in marine technology and boat building, there are less treacherous landscapes for the region's companies to navigate as part of international contracts with overseas governments.

Mapping the Australian seabed through the provision of hydrographics to help the Australian navy navigate is by far a safer option for Opua's Terry Forsbrey and his team at Northland Spars and Rigging.

If the company's government tender for vessels is successful, Forsbrey and his team of eight employees will become sub-contractors to the US Pentagon's defence contractors, Lockheed Martin, which employs 250 people in New Zealand.

At Monday's conference at Whangarei's Kingsgate Hotel, managing director of Lockheed Martin, Graham Lintott, held the Opua company up as an example of how other Northland companies can have a piece of some lucrative government contracts.

The roadshow was organised by NZTE to offer advice to Northland companies about the World Trade Organisation's Government Procurement Agreement (GPA), which came into action in August and promised to open the door to allow New Zealand companies to bid for government contracts with major global partners, such as the US and the EU.

Opening the event, Rodney MP Mark Mitchell, Foreign Affairs, Defence and Trade Select Committee chairman, recalled the treacherous job the employees of his Kuwait-based company, Threat Management Group, endured in Iraq in 2005 when they worked alongside a group of international scientists from The Hague. The team was tasked with gathering evidence for Saddam Hussein's war crimes trial for atrocities against Shia Muslims and ethnic Kurds.

"The camp was attacked several times ... but no one was injured or killed ..." he said.

Their job was to protect the scientists, while setting up a safe camp close to the mass graves. The team had to open the graves to allow the scientists access to evidence, before closing them again.

Mitchell returned home to NZ and sold the company in 2010 when he decided to run for Parliament.

He said NZ, and Northland, companies could provide everything from communications equipment and IT services, to defence and security products, as well as healthcare, marine or aviation solutions to overseas governments. His example, he said, was at the extreme end of the contract procurement spectrum.

The long game
There's no rushing government contracts, Janet Clarke agreed and called it "a long sales cycle" with tight compliance and ethics expectations.

The Kiwi VP of the Gormley Group in the US told the conference that the Federal Government's US$529 billion contractor cheque book for 2016, for everything from pencils to fighter jets, was worth the extra work.

American doors could open for healthcare solutions, ICT, marine and aviation companies through that government, which is the largest purchaser of goods and services in the world.

Rob Little, NZTE's man in Sydney said the Aussie government was also seeking solutions in defence, health, ICT, foreign aid and police and emergency services, with a total defence budget of (AUD) $31.8 billion this fiscal year.

Of the 35 or so attendees on Monday, a quick NZTE survey revealed that about 22 per cent of them reported they were already selling to international governments, 67 per cent were already selling to the New Zealand government and 94 per cent were planning to sell to international governments.

Northland Spars and Rigging (NRS) knows about the long game. The Opua company won a $1.5 million contract for two $9.2 million, multi-purpose boats - Takapu and Tarapunga - for the Royal New Zealand Navy. They won the Ministry of Defence Excellence Award for design in 2013 for their efforts. The company is now an "approved military supplier" and Forsbrey says the smaller company was better suited to innovation.

It was at this award ceremony that a connection with Lockheed Martin was made.

"Having that company and the likes of the head of Boeing come and shake my hand made me feel like a little fish out of water. But they were impressed with our success and that we beat them. Larger companies are geared up production. A small company like ours can be flexible and easily customise," he said.

Forsbrey, who bought the company in 2009, said he should know by the end of this year if NSR's contract for vessels within the Lockheed Martin bid with the Australian Navy is successful. He hopes to double the NSR team by the end of next year.

"It's hard to put a value on this contract. These are priceless business relationships. They might want two boats, they may order more. You never know, you just have to be ready. You play the long game with governments ... you may get more work."

He said if Northland wants to be successful with overseas contracts, it needs more company leaders with business acumen and the region needs to focus on its shortage of skilled tradespeople.

"I now need about three people and will need to go overseas to employ them. I could expand tenfold, but I just can't find the workers."

Innovation
The NZ head of Lockheed Martin described his company as a "behemoth of government contracting"

Graham Lintott is a former Air Vice-Marshal with the Royal New Zealand Air Force (RNZAF) and managing director of the NZ Lockheed branch since 2014. The US giant designs and manufactures missiles and fighter jets for the US military and its military allies.

It employs more than 250 people at sites in Upper Hutt, Palmerston North, Wellington and Waiouru, and Burnham in the South Island, with contracts with NZ Defence Force, NZ Fire Service and NZ Police.

Lintott told the conference there were opportunities for Northland companies to develop and present innovation to Lockheed Martin, or to become prime contractors to the US government in their own right. He said the most obvious opportunities were in the ship building and marine technology industries.

Innovation was to be found everywhere, and entrepreneurs need encouragement and mentoring, he said.

During the address, a Coalition for Peace protester could be heard on a loudhailer outside the hotel, where about 20 protesters stood for over an hour. Lintott said the protesters "had a right to protest".

"Everyone has a different view on what we do. A lot of people support troops in Iraq for example, if you have a different view, well, that's OK. Lockheed Martin is not just an arms manufacturer like those people [protesters] at the front gate think."

As well as missiles and fighter jets, the company manufactured the Hercules aircrafts, known as the "workhorses of the sky".

The Royal New Zealand Air Force (RNZAF) use them for strategic and tactical air transport tasks, including the deployment and transportation of personnel and equipment, support to NZDF exercises, aeromedical evacuation, and trips to humanitarian assistance and disaster relief operations.

The NZ branch also carries out vehicle maintenance on fire service and army vehicles and manages and services the range of rifles for the NZ Army from its base at Trentham Military Camp at Upper Hutt.

Lintott told the conference the company's corporate values were "do what's right, respect others and perform with excellence". He said competition for contracts was fierce and flawless execution of production was non-negotiable. Companies needed to be fast and efficient, even if the governments they were dealing with took their time making decisions. "Hopefully, we can spark Northland people to build innovation."