Repeated Unsuccessful Material Equipment Procurements and New Framework Agreements: What and How the DOT Procured in May

Information current as of 9 June 2025

– In May, the DOT concluded 43 contracts totalling UAH 3.80 billion.

– In the material equipment category, for the second consecutive month, part of the tenders did not proceed: 21 procurements worth UAH 509.82 million were cancelled due to lack of participants.

– In May, food procurements for the Armed Forces for the second half of the year were announced using an updated product catalogue with an expected value of over UAH 22.5 billion.

– Over 47% (UAH 1.79 billion) of the total contract value was allocated to petroleum, oil and lubricants (POL).

– The agency announced framework agreements for the procurement of body armour and summer field uniforms.

StateWatch analysts examined the effectiveness of May’s procurement activities available on Prozorro and proposed recommendations for process improvements.

In total, during May, the State Logistics Operator announced 81 tenders (151 lots) with an expected value of UAH 26.68 billion. The majority of purchases (UAH 26.10 billion) were conducted under simplified procedures. Throughout the month, 83 companies participated in the tenders, whilst the average number of bids per tender stood at 2.51.

In May, the agency concluded 43 contracts totalling UAH 3.80 billion. The DOT spent over 47% (UAH 1.79 billion) of contracted funds on petroleum, oil and lubricants. Expenditure on material equipment amounted to UAH 1.16 billion (30.5%). For the supply of bottled water and catering services, the agency signed contracts worth UAH 680 million (17.8%). Additionally, UAH 161.89 million (4.2%) was spent on other goods and services.

Petroleum, Oil and Lubricants

In May, the agency concluded 12 contracts for the supply of petroleum, oil and lubricants totalling UAH 1.79 billion. The State Logistics Operator managed to achieve savings of UAH 164.88 million.

Diesel fuel represented the largest share of POL contract value – 37,500 tonnes worth UAH 1.17 billion. The DOT reported that diesel procurements for June were completed with savings of over 10%. Following the tender results, the weighted average price across all lots stood at UAH 31,355.31 per tonne of diesel. Given that procurements for the Armed Forces are exempt from excise duty and taxed at a 0% VAT rate, the fuel price proved substantially lower than retail market prices, thereby securing the 10.41% saving.

The agency also contracted 7,000 tonnes of A-80 grade petrol for a total of UAH 356.16 million. An identical volume of jet fuel was purchased for UAH 258.30 million. All contracts for diesel, petrol and jet fuel were concluded with UKRNAFTA PJSC.

Additionally, 20 tonnes of engine oil under NATO code O-1180 were contracted for UAH 3.43 million, and 10 tonnes of Nycosol 131 fluid for UAH 5.31 million.

The distribution of POL suppliers remains virtually unchanged over recent months, with UKRNAFTA PJSC holding the largest share of contracts.

Material Equipment

For material equipment procurement, the DOT concluded 8 contracts totalling UAH 1.16 billion. Total savings from the procurement results amounted to UAH 14.99 million.

Modular body armour (Type 2) represented the largest contracted value. The agency concluded a contract with KHARKIV PLANT OF PERSONAL PROTECTIVE EQUIPMENT LLC for the supply of 10,000 body armour sets worth UAH 295.59 million (UAH 29,559 per unit). Additionally, the DOT concluded a contract for the purchase of 20,000 body armour sets worth UAH 416.40 million. This is the first procurement of body armour under a dynamic framework agreement with restricted access, which conceals information about the winner. However, according to information from the “Nashi Groshi” publication, modular “UTDefence” body armour was purchased in basic configuration 1–5 (without shoulder and thigh protection elements and without a belt), manufactured by UKRTAK.UA LLC.

Three Ukrainian suppliers were preliminarily admitted to the tender: UKRTAK.UA, TEMP-3000, and KHARKIV PLANT OF PERSONAL PROTECTIVE EQUIPMENT.

The cost per set is UAH 20,820 – 17% less than the average in last year’s contracts. The minimum price for an analogous model last year started from UAH 24,320. In response to StateWatch’s enquiry, the DOT explained that the framework agreement was chosen because this approach allows procurement timelines to be shortened and contracts to be concluded rapidly in cases of urgent need.

In May, the agency also contracted 30,000 covers for modular body armour worth UAH 359.10 million. Specifically, contracts were signed for the supply of 15,000 covers each with MIK LLC for UAH 176.85 million (UAH 11,790 per unit) and TEMP-3000 STP LLC for UAH 182.25 million (UAH 12,150 per unit).

Additionally, the DOT contracted 100,000 combat shirts for UAH 91.65 million:

– 50,000 units for UAH 45.89 million (UAH 917.94 per unit) from NIKA-TEXT PLUS LLC

– 35,000 units for UAH 32.01 million (UAH 914.76 per unit) from OLTEKS LLC

– 15,000 units for UAH 13.74 million (UAH 916.2 per unit) from SEWING FACTORY PROFI TEKS LLC

The DOT also purchased 10,000 trouser belts (Type 2) for UAH 750,000 (UAH 75 per unit) from DVE LLC.

Overall, contracts in the material equipment category were concluded with seven companies in May. KHARKIV PLANT OF PERSONAL PROTECTIVE EQUIPMENT LLC received the largest contract value.

Food, Catering Services and Drinking Water

In May, the DOT concluded four contracts with OBOLON PJSC for the procurement of bottled water for Armed Forces personnel for the second half of the year, worth UAH 652.74 million. Savings amounted to UAH 3.42 million.

The agency also continues to procure catering services for cadets at civilian higher education institutions that provide training for specialists in the security and defence sector. For the second half of 2025, the DOT concluded two contracts with TRADING HOUSE ART TASTE LLC. One contract worth UAH 17.62 million covers the needs of cadets at Yaroslav Mudryi National Law University (155,296 services), whilst the other worth UAH 9.64 million provides catering at Kyiv Aviation Institute State University (70,288 services).

Throughout the month, the agency also continued implementing the pilot model within Kyiv Oblast, announcing 59 lots, of which 17 were deemed unsuccessful.

Specifically, it was not possible to determine current prices for the following product categories:

– Fruit, berries and vegetables – UAH 22.26 million

– Meat – UAH 1.53 million

Meanwhile, in May food procurements for the Armed Forces for the second half of the year were announced with an expected value of over UAH 22.5 billion, providing for the supply of 145.17 million food sets according to the Catalogue for personnel and 28,540 sets for feeding animals. Delivery is planned to all regions except Kyiv and Kyiv Oblast, where the updated provision model operates.

Procurements will be conducted in sets according to an updated product catalogue. Changes include expanding the assortment of spices, cereals, fish and preserves, as well as partial replacement of canned fruits with fresh ones. Additional requirements have been established for certain categories: dairy products with varying fat percentages; flour, pasta, fish preserves and sausages of the highest quality only. Fish exclusively without heads for cost optimisation. Items that had no demand have been removed.

Enhanced quality control is specifically provided for in the new contracts. Mandatory laboratory testing of sweet cream butter and hard cheeses, which became leaders in the number of complaints from servicemen, is required – their supply will be prohibited without an official protocol from an accredited laboratory. New contracts will also contain additional sanctions for suppliers for unauthorised product substitutions without amendment of applications by military units.

Challenges: Unsuccessful Procurements and Framework Agreements

In May, 36 tenders (47 lots) totalling UAH 1.09 billion could not be completed. In the material equipment category, 21 tenders with an expected value of UAH 509.82 million were cancelled due to lack of participants.

Overall, challenges in material equipment procurements have persisted for the second consecutive month. In April, 27 procurements with a total expected value of UAH 559.81 million were deemed unsuccessful. These included 105,000 windproof winter jackets, 50,000 windproof winter trousers, 200,000 T-shirts, 200,000 polo shirts, 500,000 men’s underwear, 10,000 special camouflage suits, and others.

In May, the procurement of 110,000 transport bags with a total expected value of UAH 149.37 million largely failed to proceed. Among items added to the list of cancelled procurements this month were 60,000 combat rucksacks and 30,000 wind- and waterproof mid-season suits.

Tenders could not be completed during April and May due to lack of bids from participants. Some April tenders failed to proceed partly due to reductions in expected costs for various items compared to last year’s contract prices, including polo shirts (UAH 382.63 versus UAH 478.54), winter trousers (UAH 1,724.7 versus UAH 2,188), and camouflage suits (UAH 1,576.56 versus UAH 2,188). Minor reductions occurred for T-shirts (UAH 149.8 versus UAH 153.91) and men’s underwear (UAH 82 versus UAH 84).

Following the unsuccessful April attempt to procure material equipment at reduced prices, in May the DOT revised its approach and increased expected costs to last year’s levels for some items, such as wind- and waterproof winter jackets, special camouflage suits and polo shirts. However, the situation remained unchanged – many procurements were again cancelled due to lack of bids.

Specifically, in May the agency was unable to procure 10,000 polo shirts with a total expected value of UAH 4.74 million. Whilst in April the expected cost per unit was UAH 382.63, in May this was raised to UAH 474 (the average price in 2024 contracts was UAH 478.54).

Meanwhile, in May the DOT announced a framework agreement for the procurement of men’s summer field uniforms and wind- and waterproof winter jackets, which could potentially prevent unsuccessful tenders. However, this approach limits public oversight and procedural transparency.

Additionally, in May the agency conducted its first procurement of body armour under a framework agreement with restricted access to information. Under this procedure, the DOT purchased 20,000 sets of modular body armour worth UAH 416.4 million.

The DOT also announced a framework agreement for material equipment. This format allows procurement failures to be avoided and accelerates contract conclusion in cases of urgent need. However, the use of framework agreements with restricted access to information reduces the level of transparency in public funds utilisation.

Furthermore, it was again not possible to conduct part of the procurements for determining current prices for various product categories under the pilot food procurement model. Specifically, 17 lots concerning product categories such as vegetables, berries and fruit, and meat were not completed.

Recommendations Based on Analysis of Challenges in May 2025

For the State Logistics Operator:

1. Conduct market consultations with material equipment suppliers to address the situation with unsuccessful procurements of uniform items and equipment.

For the Cabinet of Ministers:

2. Standardise approaches to forming expected and indicative costs for material equipment across all security and defence force ordering entities.

DOT procurement monitoring has been supported by the Office of the United Kingdom’s Special Defence Advisor and delivered by EDGE Foundation and StateWatch Think Tank.