The scandal with the Armed Forces tenders: why Ukrainian producers do not participate in procurement

30 May 13:49

In May, for the first time since the beginning of the full-scale war , no company in Ukraine applied to participate in 20 tenders of the State Logistics Operator (DOT) for the supply of material assets for the Armed Forces of Ukraine. This was reported by journalist and member of the Independent Anti-Corruption Commission (NAKO) Tetyana Nikolayenko, who analyzed the situation in detail, "Komersant Ukrainian" reports

“This has never happened before, and here it is again. But it has never happened before that not a single company that supplies material property to the Armed Forces has won 20 tenders of the State Defense Ministry,” she wrote on Facebook.

The first to fail was a tender for the supply of 170,000 polo shirts, followed by 50,000 windproof pants, 10,000 camouflage suits, 115,000 winter jackets, and 500,000 pieces of underwear. In all cases, it was a question of engaging Ukrainian manufacturers exclusively, but none of them submitted a proposal.

“At the same time, the qualification criteria for bidding included the involvement of Ukrainian companies. But not a single company applied. What happened then? At first, I thought it had something to do with the showdown between Joker and Mitrokhin. And I would not even rule out the possibility that Mitrokhin could have initiated such a process (well, this is purely my speculation),” said Nikolayenko.

However, there is also an economic explanation. Producers are not satisfied with the price offered by the state. Nikolayenko recalled that this was also said by Oleksandr Sokolovsky, Chairman of the Board of the Light Industry. According to him, in 2024, prices at tenders were 15-27% lower than last year.

“I sat down and did the math – it’s true. Given the constant attacks and the rise in price of everything, it is quite strange to lower the price like this,” Nikolayenko writes.

After the failure of the tenders, DOT started asking other companies for import prices. Imports can indeed be cheaper, as was the case last year when jackets made in Vietnam for Farminko failed quality control, and recently a similar story happened with Israeli bulletproof vests supplied by a gasket company.

Nikolayenko admits that the situation is complicated and ambiguous. On the one hand, domestic producers should be supported because they pay taxes and create jobs. On the other hand, some Ukrainian companies also do not operate transparently, often buying imports and passing them off as domestic production.

“We should protect domestic producers, because after all, they pay taxes and support the economy. But… the Ukrainian manufacturer is often very cunning and imports. And everyone who needs to understands this, too,” she notes.

Despite the difficulties, the army cannot be left without clothing and equipment. That is why next week a meeting between representatives of the State Defense Department and Nadiya Bihun is to take place to discuss how to resolve the situation and provide the Armed Forces with the necessary equipment.