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19 May, 2023
Publicly accessible non-weapon procurement of the Ministry of Defense will not be a threat to safety and will become the first step in countering the excessive prices – the ACAC

On April 23, the defense buyers have begun publishing information on non-weapon procurement in the Prozorro system for the first time since the beginning of the war. As of May 8, over 10,000 reports have been posted. 

The Anti-Corruption Action Center (ACAC) have analyzed them and produced the first conclusions “crucial to facilitate the control of the public and international partners over the procurement.”

First of all, the data on the published procurement will surely not aid the russians and not do harm to the Ukrainians. The Ministry of Defense (MoD) used to stress that disclosing information even on food purchases for the military was a threat to national security. The published reports contain food, spare parts, EcoFlow stations, board games and guitars for the soldiers “entitled for some pastime.” “We do not really see how this data may help the enemy. Even when only the MoD’s reports are concerned, it would not be easy to follow the risks anyway. The majority of them now relate to textile items (uniforms, footwear, T-shirts, and caps) and fuel,” the ACAC informs.

Second of all, some reports do not contain specific data on the items purchased, which makes it difficult to understand whether they are not overpriced. The majority of procurement items in the system have somewhat vague names. A specific 4WD vehicle for UAH 2.5 million bought by military unit T0710 of the State Special Transport Service of Ukraine is a mystery: is it a front-line 4WD pick-up or an SUV? Or let’s take the wristwatches purchased by the same unit for UAH 19,700: are these “Luminox Original Navy Seal timepieces (from the top 10 of the best tactical watches in the world) or smart Apple Watches?” Sometimes the buyers provide no clues at all regarding the purchased items. This is the case of military unit T0950 reporting a purchase of one “pharmaceutical item” package for UAH 99,947.

Third of all, the front line units tend to report more accurately than the back line ones. The main aim of the law on the transparency of non-weapon procurement is mandatory reporting of the big state buyers (Ministry of Defense, Ministry of Internal Affairs, Security Service of Ukraine, etc.). However, separate military units upload hundreds of reports to Prozorro, while some buyers with huge procurement departments are not so quick what concerns public accountability. Thus, the “truly exemplary unit A1225 of the Defense Intelligence of Ukraine purchasing the food at the most beneficial prices” has already published over 450 reports, while the Security Service of Ukraine made only 40 or so reports public.

This matches the vision of NAKO, for we have already forecast that the data to be published is insufficient to assess, for instance, whether the agreement price is too high. Yet it is impossible to check the completeness and timeliness of publishing this information. So, to develop an efficient system of the Ukrainian Armed Forces supplies complying with the NATO standards, we need to carry on with reforming the defense procurement.

The ACAC materials indicate that the Law on the disclosure of information on non-weapon procurement and the quick development of the relevant Prozorro tool are just the first steps in solving the overpriced UAF food supplies. It is because the procurement system of the MoD has not been reformed, the ACAC states. However, as put by the head of NABU, Andrii Kaluzhynskyi, it was what became the source of the problems. Specifically, it is about actual hiding food purchases under the pretense of “services,” while no services are actually rendered. Food supplies rely on a catalog of 409 items, yet in reality, only a third of food products is procured (potatoes, eggs, carrots, etc.). Their price in the contracts is significantly high, while the price for the goods which are not ordered is too low.

The Office for Support of Changes under the Ministry of Defense will be in charge of changing the procurement system. Its members are experienced in implementing these reforms and do not hold high-ranking positions or authorities. The establishment and the work of a service agency to carry out this procurement should become a starting point here.

NAKO has also more than once emphasized how important it is to create a state-owned enterprise as the single defense procurement body within the MoD. It should simplify the tenders and provide an optimal cost/quality ratio, facilitating healthy competition between local and foreign suppliers.


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