Encouraging localization, long-term contracts, tenders in advance: how the Ministry of Defense is improving procurement
7 April 16:42
In the first quarter of 2025, the Ministry of Defense’s procurement agency, the State Logistics Operator (DOT), contracted logistics property worth UAH 44.8 billion. This was reported by the Ministry of Defense, "Komersant Ukrainian" reports.
This volume of procurement has already reached almost 66% of the total funding provided for 2025, which amounts to UAH 67.6 billion.
How procurement procedures are changing
The Ministry of Defense is implementing a localization policy that promotes the development of Ukrainian industry. At the end of last year, a government decree was adopted that sets out clear requirements for Ukrainian arms manufacturers and stipulates that if localization exceeds 50% of the unit value of all components, manufacturers can receive guaranteed long-term contracts from the state for three, five or ten years.
Also last year, the DOT introduced a regional fuel procurement model. This strategy involves dividing the supply into four regions: Eastern, Southern, Central and Western. The number of bidders, increased competition between them and, consequently, the level of savings achieved at auctions confirmed the effectiveness of this procurement model.
In addition, the Ministry of Defense is taking measures to better utilize the procured resources. In particular, the State Treasury Department has started purchasing diesel fuel marked with dyes. This mechanism allows tracking each batch of fuel, reducing the risk of misuse.
Thanks to the advance approval of procurement plans back in 2024, the DOT was able to start implementing them promptly, ensuring the stability of supply of the necessary logistics equipment. As Hlib Kanevskyi, Director of the Procurement Policy Department of the Ministry of Defense of Ukraine, explains, holding tenders in advance allows businesses to better plan production and the military to receive the necessary supplies in a timely manner.
What has already been contracted and purchased by the Ministry of Defense
In the first quarter of this year, the Ministry of Defense contracted food for UAH 21.4 billion, material property for UAH 16.4 billion, and fuel and lubricants for UAH 7 billion.
For example, UAH 1.8 billion worth of summer field suits have been purchased and delivered to warehouses worth UAH 433 million. This made it possible to provide the military with the necessary clothing in time for the start of the season.
A significant amount of personal protective equipment has also been contracted. A total of UAH 3.8 billion worth of contracts were signed, including UAH 3.1 billion for bulletproof vests, UAH 0.7 billion for helmets, and UAH 0.1 billion for tactical goggles. This made it possible to provide the units with the necessary protective equipment in a timely manner.
The Ministry of Defense of Ukraine has been providing servicemen with modern and effective personal heating equipment for the third season. In 2025, the Ministry of Defense’s procurement agency DOT has already contracted 300,000 such kits and plans to purchase another 200,000.
Providing drones is one of the priorities of the Ministry of Defense
In 2024, the Ministry of Defense, together with the State Service for Special Communications and Information Protection of Ukraine, purchased more than 1.5 million drones. 96% of this amount was paid to Ukrainian manufacturers and suppliers.
“This year, the numbers will be even higher, because the capabilities of the domestic defense industry in 2025 are approximately 4.5 million FPV drones. And the Ministry of Defense plans to purchase them all,” said Hlib Kanevskyi, Director of the Procurement Policy Department of the Ministry of Defense of Ukraine.
This year, the Ministry of Defense of Ukraine is allocating more than UAH 110 billion for the purchase of drones, including more than UAH 102 billion through the Defense Procurement Agency. It was reported that all procurement plans for 2025 have received budget funding.
