Not so in New Zealand, even though it now has a defence industry turning over $NZ1 billion per year.
Ministry of Defence procurement has to conform to the NZ Government Procurement Policy Framework. Each acquisition is chosen against five criteria: best value for money over whole of life, open and effective competition; improving business capabilities; and recognition of NZ's international trade obligations and interests. The policy on offsets (encouraging domestic content) is not to be imposed, sought or considered in evaluating or awarding the contract, although commercially viable offsets freely offered may be accepted.
In a hotly competitive worldwide market NZ companies, locally owned and subsidiaries of overseas defence contractors, have notched up some worthwhile successes. Infrequent purchases of major defence assets such as ships, land vehicles, weapons or aircraft means that domestic industry cannot sustain itself by these contracts alone. However, by forming partnerships with overseas prime contractors the industry has wins participation in the initial stages of these contracts and positions itself as the best source of through life support.
For example, the $NZ 500 million seven ship Project Protector contract was won by BAE Systems (ex-Tenix) in Australia but $NZ135 million of that was shared by 85 NZ companies subcontracting to BAE Systems, including the construction and fit-out of four 55 metre inshore patrol vessels. The home port for these seven ships is the Devonport Naval Base in Auckland, where dockyard support is outsourced to a private company VT Fitzroy.
The business models of most companies have defence as just one division within a wider product and service range mainly geared to meet civilian needs.