StateWatch continues tracking progress on the Ukraine-NATO Strategic Defence Procurement Review, designed to bring Ukraine’s defence procurement in line with Euro-Atlantic standards.
StateWatch previously published an analysis on how Ukrainian authorities are implementing the Review’s recommendations [1]. The think tank highlighted a critical need: better coordination between government bodies, and even between departments within individual authorities.
Between April and June, key actors in Ukraine’s defence procurement sector made notable progress. The Ministry of Defence (MoD) alongside the procurement agencies – the State Logistics Operator (DOT) and Defence Procurement Agency (DPA) – advanced several measures that directly support the Review’s recommendations.
Recommendation No. 1: Continue reforming defence procurement institutions in wartime and peacetime
On 1 May 2025, Minister of Defence of Ukraine Rustem Umerov announced the beginning of a major reorganisation of the DOT procurement agency. The agency’s operations will be synchronised with those of the DPA. Once martial law ends, a single agency – the DPA – will handle both lethal and non-lethal procurement [2].
Under the Defence Minister’s reorganisation order, DOT’s management powers transferred to a reorganisation commission. Arsen Zhumadilov became its head, gaining primary signatory authority. The commission will hold these powers until the reorganisation process is complete. In the legal entities register, Zhumadilov is listed as DOT director and “head of termination commission or liquidator.”
Meanwhile, the MoD’s Procurement Policy Department was disbanded and replaced with a new MoD Procurement Department [3].
Recommendation No. 3: Support effective use of locally assigned budgets by military units
A defence procurement course from the MoD launched in the Army+ app. According to the MoD, since May 2025, 1,000 military personnel serving in procurement, supply and logistics
departments have begun taking the course. The course reportedly provides knowledge on procurement planning, market analysis and tender participation [4].
The training programme was developed by a joint team comprising the Defence Procurement Reform Project and the MoD’s Office for Support of Changes, in collaboration with the MoD as part of the support programme led by the UK Special Defence Advisor Team (SDA).
Recommendation No. 8: Improve direct contracting and closed competition procedures
The Cabinet of Ministers approved a resolution developed by the MoD that provides for scaling the DOT-Chain digital platform to the weapons supply sector. Through DOT-Chain Defence, military brigades will be able to independently order the necessary equipment for carrying out combat missions [5].
Recommendation No. 10: Develop shared registry of suppliers
A verified suppliers registry has been created, containing 1,247 companies as of 2 July 2025. However, the registry was created not by the Ministry of Strategic Industries, but by the DPA.
Compliance and security criteria for registry verification:
– Official legal status in accordance with Ukrainian legislation or the legislation of the country of registration;
– The candidate has not been held liable for anti-competitive actions under the Law of Ukraine “On Protection of Economic Competition” during the last three years;
– No liquidation proceedings have been initiated against the candidate;
– The candidate is not included in any sanctions lists;
– No affiliation or cooperation with organisations from Russia, Belarus, or Iran;
– No evidence that the candidate offers compensation to influence verification or procurement results.
Recommendation No. 13: Build trust in the Agencies
The State Logistics Operator has developed and launched an annual procurement plan covering [6] procurement in three areas: food, material supplies, and fuel and lubricants.
The plan has been published to ensure continuity of supply to the military, as it allows production processes and logistics to be adapted in advance to meet defence requirements.
As part of implementing this recommendation, the “three lines of defence” compliance model is also being adopted. This involves creating operational internal control at the first level, risk management at the second level, and internal audit at the third level. DOT has thus added the third line of defence, which provides independent assessment of the effectiveness of the risk management and internal control system. Internal audit will conduct independent audits of the first and second lines of defence, assess compliance with requirements, identify weaknesses in risk management, and report results to DOT’s Supervisory Board.
DOT’s “blacklist” is also operational, containing 7 unscrupulous supplier companies as of June 2025. Among the reasons for inclusion in the list, DOT highlights failure to meet delivery deadlines, unsatisfactory quality of goods, supply of counterfeit goods, refusal to fulfil contractual obligations, and violations of anti-corruption and sanctions provisions.
Recommendation No. 15: Develop a robust compliance programme
The DPA has launched a “single window” [7] for collecting commercial proposals from manufacturers and suppliers [8]. On the DPA website in the “For Suppliers” section, companies wishing to offer their products for defence needs must undergo a verification procedure by providing information about themselves. DPA specialists then conduct a compliance procedure on the supplier and decide whether to include them on the permanent suppliers list for commercial proposal consideration (see Recommendation 10 for more details).
Recommendation No. 16: Revise and consolidate procurement legislation to boost the DPA
On 23 May 2025, the Cabinet of Ministers adopted Resolution No. 603, amending the procedure for using budget funds for defence procurement by the DPA [9]. The changes permit new payment directions:
– Payment of customs duties, value-added tax (VAT) on imports, customs duties and excise tax on excisable goods;
– Payment for logistics, transport, customs brokerage services and goods escort services directly to supplier (contractor) accounts.
Before this resolution was adopted, the DPA was restricted in paying for such services, which prevented it from considering commercial proposals from international arms manufacturers that did not include delivery of goods to Ukrainian territory and subsequent distribution to Armed Forces arsenals [10].
Recommendation No. 19: Facilitate engagement with Ukrainian industry
In the Verkhovna Rada, MPs are working with the MoD to propose introducing a support programme for Ukrainian weapons manufacturers called Defence City. This programme would establish a special legal regime for defence-industrial complex enterprises. Defence City residents would be able to develop their production facilities in partner countries based on international agreements under which military equipment would be returned to Ukraine to supply the Armed Forces during martial law [11].
Minister of Defence of Ukraine Rustem Umerov also announced that Ukraine is launching a joint weapons production programme with international partners, including Denmark, the United Kingdom and Norway [12].
Additionally, the NATO-Ukraine Joint Analysis, Training and Education Centre (JATEC) has launched the “Lessons Learned Data Exploitation Platform” (LL DEP). The platform’s key objective is to integrate Ukraine’s and the Alliance’s military experience into a unified system [13].
StateWatch Think Tank emphasises that for systematic implementation of the Review, the Ministry of Economy and Ministry of Defence must launch the Inter-Agency Working Group on Improving the Legal Framework and Reforming the Defence Procurement Model, which should kick-start implementation of at least nine recommendations from the Review.
The preparation of this analytical note has been supported by the Office of the United Kingdom’s Special Defence Advisor and delivered by EDGE Foundation and StateWatch Think Tank.
Sources
1. NATO-Ukraine Strategic Defence Procurement Review Implementation Analysis https://statewatch.org.ua/en/publications/nato-ukraine-strategic-defence-procurement-review-implementation-analysis/
2. Synchronization of the DOT and the DPA creates new opportunities to enhance the efficiency of defense procurement https://mod.gov.ua/en/news/synchronization-of-the-dot-and-the-dpa-creates-new-opportunities-to-enhance-the-efficiency-of-defense-procurement
3. MoD Department of Procurement https://mod.gov.ua/en/about-us/ministry-staff-en/department-of-procurement
4. 1,000 service members have started learning the fundamentals of defense procurement thanks to the Army+ course https://mod.gov.ua/en/news/1-000-service-members-have-started-learning-the-fundamentals-of-defense-procurement-thanks-to-the-army-course
5. Weapon deliveries will accelerate as the government approves the launch of DOT-Chain Defence — a digital marketplace for weaponry https://mod.gov.ua/en/news/weapon-deliveries-will-accelerate-as-the-government-approves-the-launch-of-dot-chain-defence-a-digital-marketplace-for-weaponry
6. DOT has announced a new feature for its annual procurement plan: suppliers can prepare in advance https://dotua.org/ua/dot-opriliudniv-novii-funkcional-ricnogo-planu-zakupivel-postacalniki-mozut-gotuvatis-zazdalegid/
7. DPA “single window” https://dpa.mod.gov.ua/en/suppliers
8. DPA launches a ‘single window’ for manufacturers and suppliers. How it works https://forbes.ua/news/aoz-zapuskae-edine-vikno-dlya-virobnikiv-i-postachalnikiv-yak-vono-pratsyue-28042025-29283
9. The Cabinet of Ministers has expanded the possibilities for using funds for defence procurement https://www.golos.com.ua/article/384241
10. Glib Kanevskyi: The Defence Procurement Agency was granted authority to fund procurement-related associated services https://mod.gov.ua/en/news/glib-kanevskyi-the-defence-procurement-agency-was-granted-authority-to-fund-procurement-related-associated-services
11. The Rada wants to introduce Defence City mode to strengthen defence: what it’s all about (infographic) https://focus.ua/uk/voennye-novosti/711953-defence-city-rada-zbirayetsya-zaprovaditi-noviy-pravoviy-rezhim-dlya-virobnikiv-zbroji