Problem

Since 2014, after the first acts of armed aggression by the Russian Federation, the volume of procurement of weapons, ammunition and other military goods has been steadily increasing. In 2021, the budgetary expenditures of the Ministry of Defense as part the State Defense Order reached UAH 26.4 billion, which is almost five times more than in 2014, when the Ministry of Defense spent UAH 5.6 billion on modernization and procurement of weapons.
The Ministry of Defense planned to spend more than UAH 95 billion on modernization of weapons and military equipment until 2024.
At the same time, most defense procurement procedures were carried out in violation of the principles of competitiveness, openness and transparency, which gave rise to a number of corrupt practices. For example, intermediaries who had no production facilities and did not perform any actual work were often involved in filling the state defense order. Often, the price of the state contract was artificially inflated, and the delivery of products was fictitious or substituted with a lower quality equivalent or used equipment.
On January 1, 2021, the Law of Ukraine On Defense Procurement was supposed to take effect and replace the State Defense Order. However, the implementation of this Law has been delayed for the entire year due to the slow process of adopting the necessary regulations. Additional amendments to the legislation on secrets of state were not developed to ensure transparency and competitiveness of most defense procurements, the disclosure of which would not harm national security and defense. Also, the Electronic Register of Competitive Selection Bidders and Contractors Performing Government Contracts (Agreements), which was supposed to serve as a filter against fictitious companies and ensure competition, has not been put into commercial operation.