27 January, 2023
Promoting Defence Procurement Reform

Increasing transparency of Ukraine’s defence procurement has always been one of NAKO’s key priorities. Due to NAKO’s active engagement, the Law “On Defence Procurement” was voted by the Parliament on July 17, 2020, after lengthy discussions and revisions. 
The Law aims to minimise corruption risks in the defence sector. It provides for open defence procurement procedures, significantly increases the transparency of procurement planning, and ensures effective public and democratic civilian control. Due to this, funds for the purchase of goods, work, and services for defence purposes will be used more efficiently.
NAKO added eight key recommendations to the second reading, four of which were partially considered. Simultaneously, there are certain points that have not been resolved. In particular, one of the important points we emphasized is the need to declassify information about the plans, content, and amount of funding for contracts that have already been executed, in accordance with the Law “On State Defence Order.”
However, despite several shortcomings, this draft law is the first in the history of Ukraine’s defence sector to be developed with the participation of all key stakeholders, in particular with the participation of civil society. NAKO was actively involved in working on the draft law at all stages and commented on the draft law. All NAKO recommendations on minimising corruption risks in the state defence procurement system, presented in the NAKO study “State Defence Order Reform”, were also taken into account when working on the draft law.
So far, the Law “On Defence Procurement” has failed to revolutionize defence procurement. Among the reasons for this are opposition to reforming the old Soviet system and the low capacity of the executive branch, which is responsible for implementing the law.
The law should have been implemented by January 1, 2021, but this did not happen as the relevant ministries were unable to develop about 30 regulations on time. Also, the register of the government contractors which is an important element of the new defence procurement system doesn’t function properly as of autumn 2021.  
The implementation of this Law is one of the key challenges in 2021, not only for the involved ministries, but for Parliament, which should oversee this process, and for civil society, which, we promise, will closely monitor this process.