More than UAH 3.3 billion of public funds were saved due to the transparency of the drone procurement process. At the same time, about UAH 1.8 billion was spent on the purchase of additional 18,413 drones for the Defense Forces, and almost UAH 1.5 billion was returned to the state.
Such achievements are the result of well-established systematic cooperation between the State Service for Special Communications and the Ministry of Digital Transformation and the country’s main anti-corruption agencies, the SAP and the NABU, to control drone procurement. In particular, a solution from the German technology company SAP helps with this.
How does it work?
In March 2023, the government passed a resolution that increased the margin for Ukrainian companies from 1% to 25%. In fact, Ukrainian producers were able to earn more than in NATO countries, where the margin is 17%.
“Under market conditions, the cost of goods can fluctuate, and therefore the actual margin changes. Therefore, taking into account the NABU’s recommendations, the government has adopted a resolution – and manufacturers must clarify how prices were calculated if the profit exceeds 25%. After the recalculation, the companies must either return the difference to the budget or supply drones,” writes Deputy Prime Minister Mykhailo Fedorov.
In turn, the State Special Communications Service provided detectives with transparent access to the CRM system. If necessary, they can freely obtain all procurement information: manufacturers, prices and contract details. The recommendations provided by NABU experts help prevent potential corruption risks in procurement.
Key positive changes
- Transparency: Implementation of the CRM system and procurement through Prozorro ensures full transparency of the processes, allowing the public and anti-corruption authorities to monitor each stage.
- Efficiency: Price expertise, SAP management system and supply chain optimization allow us to purchase equipment at the best prices and in the shortest possible time.
- Competition: Procurement through Prozorro stimulates competition among suppliers, which leads to lower prices and higher quality products.
- Focus on the needs of the military: All procurement is carried out exclusively in accordance with the needs of the Security and Defense Forces.
- Innovations: The active search for new technological solutions, such as FPV drones with machine vision and missiles, contributes to the development of the domestic defense industry.
Possible areas for further development
- Consideration should be given to procuring a wider range of military equipment, including sophisticated weapons systems, through Prozorro.
- The creation of a single catalog will standardize product requirements, simplify procurement procedures, and strengthen quality control.
- It is necessary to continue to support domestic producers by providing them with access to government contracts and promoting research and development.
- Cooperation with foreign partners will allow access to new technologies, increase the level of interoperability of weapons, and strengthen the country’s defense capabilities.
- Further digitalization of procurement and military stockpile management processes will optimize logistics, reduce costs and increase efficiency.
Conclusions
The proposed changes are an important step towards reforming Ukraine’s defense industry. However, in order to achieve maximum efficiency, it is necessary to continue to implement innovative solutions and develop the procurement system in line with new challenges.
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