At the 75th NATO Summit in Washington in 2024, the NATO-Ukraine Strategic Defence Procurement Review (the Review) was approved. This document comprises 21 recommendations aimed at improving the effectiveness of defence procurement in line with NATO standards. 

The Review’s primary objectives are:

• to align Ukraine’s defence procurement with Euro-Atlantic best practices;
• to strengthen NATO-Ukraine cooperation in defence procurement;
• to enhance accountability in Ukraine’s procurement processes.

This approval represents a significant milestone in implementing Ukraine’s adapted Annual National Programme, which identified defence procurement reform as a key priority for Ukraine in 2024.

The document highlights three high-level recommendations of a strategic nature. Firstly, it recommends centralising Ukraine’s defence procurement based on two state procurement agencies under the Ministry of Defence (MoD) — the Defence Procurement Agency (DPA), in charge of lethal defence procurement, and the State Logistics Operator (DOT), in charge of non-lethal defence procurement — by strengthening the capabilities of these two agencies during wartime.

Secondly, it recommends developing an integrated defence planning framework that aligns medium and long-term planning efforts with the complexity of production processes, logistical considerations, and legal aspects of the life cycle of defence equipment and systems. This framework should incorporate national strategic objectives, equipment interoperability, force structure, operational requirements, strategic projects and programmes, and budgetary management.

The third high-level recommendation aims to establish a defence industrial strategy that provides transparency over future defence requirements and identifies and improves the industrial capabilities, legislative and regulatory frameworks needed to meet Ukraine’s vision for a competitive and innovative industry partner.

While NATO members have been developing the formal Review Implementation Plan with specific tasks for Ukrainian authorities since July 2024, Ukrainian institutions have already begun implementing some recommendations independently.

Despite the formal delay in the launch of the Review’s Implementation Plan, the Ukrainian authorities are consistently implementing the recommendations of the NATO-Ukraine Strategic Defence Procurement Review. This demonstrates that the Review’s developments are not merely declarative document provisions, but constitute fundamental stages of transforming the state’s defence procurement system within the context of Ukraine’s Euro-Atlantic integration.

The Ministry of Economy is responsible for organising the Inter-Agency Working Group, which is expected to implement at least nine recommendations from the Review. The MoD is advancing efforts to transform defence management, engage Ukrainian industry, and establish effective procurement agency operations. Specifically, the MoD has created supervisory boards for DPA and DOT.

However, the public scandal surrounding DPA has created risks for the credibility of the defence procurement system, while power struggles over the DPA director position have temporarily impeded the agency’s normal functioning.

The Ministry of Strategic Industries is contributing to the drafting of legislation aimed at improving the legal framework for defence procurement and aligning it with EU standards. The Ministry also plans to establish a suppliers’ registry to introduce a clear and transparent mechanism for selecting and contracting suppliers.

StateWatch Recommendations

Based on the analysed documents and conducted interviews, StateWatch Think Tank has prepared a series of its own recommendations for Ukrainian authorities regarding the initial stages of Review implementation.

One of the key issues that must be addressed is establishing proper coordination between various government bodies and even between different departments within individual government agencies. Proper organisation of the workflow concerning the implementation of the Review recommendations should be the first step towards successful realisation of the proposed measures and Ukraine’s integration into NATO procurement systems.

To the Ministry of Economy:

1. Urgently launch the Inter-Agency Working Group on Improving the Legal Framework and Reforming the Defence Procurement Model, together with the MoD, which must initiate the implementation of at least nine Review recommendations.
2. Define priority tasks for the Inter-Agency Working Group on Improving the Legal Framework and Reforming the Defence Procurement Model.
3. In collaboration with the Ministry of Strategic Industries, develop a draft Law of Ukraine “On Amendments to the Law of Ukraine ‘On Defence Procurement'” to clarify the roles of various government bodies in defence procurement.

To the Ministry of Defence:

1. Urgently launch the Inter-Agency Working Group on Improving the Legal Framework and Reforming the Defence Procurement Model, together with the Ministry of Economy, which must initiate the implementation of at least nine Review recommendations.
2. Define priority tasks for the Inter-Agency Working Group on Improving the Legal Framework and Reforming the Defence Procurement Model.
3. Develop a set of measures to restore trust in the Defence Procurement Agency following the public conflict surrounding the change of DPA director and the work of the DPA supervisory board. In particular, complete the process of forming the Supervisory Board and appoint its fifth member.
4. Strengthen control over the supplier verification system to prevent the supply of low-quality products or significant delivery delays. Additionally, consistently implement a contracting mechanism based on manufacturers’ capabilities.
5. Together with the General Staff and DPA institutionalise the long-term defence procurement planning process based on manufacturers’ capabilities and introduce a permanent practice of communicating the list and volumes of planned procurements with manufacturers.

To the Ministry of Strategic Industries:

1. Complete and launch a comprehensive suppliers registry for selection and contract awarding, with the publication of information that does not pose a threat to suppliers. The registry must be accessible to defence ordering entities that are capable of providing information about potential suppliers.
2. Together with the Ministry of Economy and MoD, clarify the roles of various government bodies in defence procurement in draft amendments to the Law of Ukraine ‘On Defence Procurement’.
3. Institutionalise the process of collecting data on manufacturers’ capabilities.