Parliament supports introduction of transparent defense procurement system

7 February, 03:30 PM
The Verkhovna Rada of Ukraine (Photo:Пресслужба Верховної Ради України)

The Verkhovna Rada of Ukraine (Photo:Пресслужба Верховної Ради України)

The Verkhovna Rada, Ukraine’s parliament, has adopted a bill that foresees the publication of prices for defense procurers to buy goods and services for the Ukrainian army in the Prozorro state tender system, Golos MP Yaroslav Zheleznyak reported on Feb. 7.

According to him, the relevant resolution was supported by 290 MPs.

What is known about Ukrainian army’s food procurement scandal

Yuriy Nikolov, the founder of the Nashi Hroshi (Our Money) investigation project, wrote in an article posted by the Ukrainian online newspaper ZN.UA on Jan. 21 that the Ukrainian Defense Ministry overpays for food by 2-3 times compared to prices in Kyiv’s supermarkets.

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Nikolov compared some prices for foods in a state contract with a catering company he obtained from "a source within the Armed Forces of Ukraine" with the prices in Ukraine's Silpo supermarket chain.

Ukraine’s Defense Ministry called the article "misleading" and “manipulative”. Defense Minister Oleksii Reznikov said it was an attempt to undermine confidence of Ukrainians in the military authorities.

The President's Office announced an inspection. The Ministry of Defense has promised to conduct its own inspection, and to provide documents for a Ukrainian SBU security service investigation into "misinformation that deliberately harms the interests of defense in a special time.”

The Defense Ministry contractor, Activ company, which the Ukrainian newspaper ZN.UA had written was a "pad" or mediator, claimed there was "deliberate manipulation" from the side of the newspaper.

The National Anti-Corruption Bureau of Ukraine (NABU) and the Specialized Anti-Corruption Prosecutor's Office said they are investigating possible abuses by the Ministry of Defense during the purchase of products for the military. The amount of contracts under inspection is UAH 13 billion ($351 million).

On Jan. 25, the Defense Ministry dismissed the director of the procurement department, Bohdan Khmelnytskyi, who was involved in a scandal over food purchases for the military.

On Jan. 31, the Minister of Defense announces that the department will regain control over procurement for the army, subject to martial law restrictions.

On Feb. 3, an adviser to the Deputy Defense Minister was notified of suspicion of embezzlement of UAH 1.7 billion ($46.3 million) during the procurement of goods for the Armed Forces.

According to the investigation, in 2022, the official entered into a conspiracy with a private entity that received more than UAH 1.7 billion in advance payments but failed to fulfill its contractual obligations and did not deliver the required amount of goods (helmets, body armor, etc.) on time.

The SBU also exposed and detained two heads of commercial enterprises involved in the supply of wholesale food to military locations, with the amount of damage estimated at over UAH 119.5 million ($3.25 million).

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