Problems of reforming defense procurement and ways to solve them to maintain the economic stability of the state under martial law and achieve economic security in the post-war development of Ukraine

Abstract

The article provides an analytical review of the problems of reforming the defense procurement system in Ukraine, which was initiated by the Law of Ukraine “On Defense Procurement” dated July 17, 2020 and continues today in the direction of bringing Ukraine’s defense procurement in line with NATO best practices. It is shown that defense procurement is one of the components of managing the state’s security and defense sector, a means of maintaining the state’s economic stability under martial law and a way to achieve economic security in the post-war development of Ukraine. The problems of defense procurement are analyzed for two conditional periods: before the start of the Russian Federation’s aggression against Ukraine and during the repulsion of the aggression. The search measures of the Government and the Ministry of Defense of Ukraine to solve the problems are highlighted and generalized: adjusting the regulatory framework; changing the architecture of the defense procurement system; creating and establishing the activities of professional procurement agencies; decentralization of procurement at the level of commands of types and branches of troops and military units (institutions); introduction of internal and state audit of defense procurement; introduction of procurement under framework agreements; digitalization of interaction between the Ministry of Defense of Ukraine and manufacturers and suppliers of goods under defense procurement.

The positive results achieved in reforming procurement in the context of increasing financing for procurement of logistics assets and weapons and increasing the share of Ukrainian companies as manufacturers and suppliers of goods, works and services under defense procurement are summarized, which contributes to the development of the national economy and strengthens the defense capability of the state.

The directions of the state budgetary and financial policy in the field of national security and defense for 2025-2026 are identified and considered, which are directly related to defense procurement.

Further prospects for reforming defense procurement are shown in the context of the adapted Annual National Program of Ukraine-NATO Cooperation for 2024 and the Strategic Review of Ukraine-NATO Defense Procurement, approved at the 75th NATO Summit on July 9-11, 2024 in Washington.