More weapons, fewer intermediaries: how the Defense Procurement Agency operated in 2024.

The year 2024 has been pivotal for the reform of defense procurement in Ukraine. Starting January 1, the Defense Procurement Agency (DPA) assumed the responsibility for acquiring weapons and military equipment for the Armed Forces of Ukraine. This decision not only simplified the process but also eliminated corruption risks and bureaucracy that had long hindered effective military supply, reports "Ukrainska Pravda".

Has the new structure met expectations and addressed the challenges it faced? The outcomes of the DPA's work in 2024 demonstrate significant successes in optimizing expenses, supporting Ukrainian production, and fostering international cooperation.

Reducing the Role of Intermediaries and Lowering Prices

One of the agency's main achievements has been a substantial reduction in the share of intermediaries in military procurement. In 2023, 82% of contracts were made through special importers, while in 2024, this figure dropped to 12%. This allowed for a significant decrease in costs for key types of ammunition.

Specifically, the average price for 155 mm shells decreased by 15%, for 152 mm by 23%, and for 125 mm by 16%. As a result, billions of hryvnias were saved, which were redirected to the purchase of additional weapons.

The share of direct contracts with foreign manufacturers also increased, particularly with Bulgaria, Germany, and France. In total, in 2024, the DPA signed 50 agreements with companies from 13 countries.

Support for the Ukrainian Defense Industry

The development of domestic production has been another key focus for the agency. Throughout 2024, contracts were financed with 155 Ukrainian weapons manufacturers. In the drone production sector, domestic companies accounted for 90%, and in the electronic warfare (EW) sector, nearly 50%.

Budget Efficiency

The annual budget of the DPA for 2024 amounted to 306.1 billion UAH. Contracts were signed for 100% of this amount, and 99.2% of the funds were paid to suppliers. The minor remainder of 0.8% occurred for technical reasons, particularly due to the delivery of goods in the last days of the year.

Despite attempts to discredit the agency's work, it has proven its ability to efficiently utilize allocated funds. However, the withdrawal of 23 billion UAH from its budget to benefit other structures created a temporary deficit that will require additional efforts in 2025.

International Cooperation

The DPA actively developed partnerships with international procurement structures, particularly with NATO countries. Memorandums were signed with agencies from Denmark, Estonia, Norway, Turkey, and Italy.

Notably successful was the implementation of the so-called "Danish model," where other countries fund the procurement of weapons for Ukraine from our manufacturers. Thanks to this initiative, Denmark ordered Ukrainian long-range drones worth €535 million, which have already been delivered to the Armed Forces.

Regularity of Supplies

In 2024, the DPA supplied weapons worth over 180 billion UAH. Another 46 billion UAH will be used for deliveries in the first quarter of 2025, ensuring continuity of supplies for the army.

Summary

The year 2024 marked a transformation of Ukraine's defense procurement system. The Defense Procurement Agency has demonstrated its effectiveness by optimizing expenses, strengthening Ukrainian production, and enhancing international cooperation. Ahead lie new challenges; however, the work accomplished in 2024 has laid a solid foundation for future successes.