No new contracts: How DPA failed to procure ammunition for 2 months and what it will cost us
As of the end of February, the Defense Procurement Agency (DPA) had not concluded a single new contract to procure ammunition. This could severely impact the Ukrainian army’s supply chain in the coming months and result in Ukraine having to resort to buying weapons from resellers again.
Read how this happened in the Censor.NET article.
On 5 March, the Director of the US Central Intelligence Agency, John Ratcliffe, confirmed that the United States had suspended arms deliveries and the transfer of intelligence data to Ukraine. Against this backdrop, Ukrainian officials should have been doing everything possible and impossible to secure the largest possible arms contracts. Instead, at the beginning of the year, the process of signing new contracts was actually halted.
At the end of February, the Anti-Corruption Action Center published a response to an inquiry sent to the DPA. In it, the current head of the DPA, Arsen Zhumadilov, stated that as of 21 February, no new contracts had been signed in the ammunition category.
"We inform you that between 25 January 2025 and 21 February 2025, the Agency concluded 72 state contracts (agreements) in the category of 'Unmanned Aerial Systems, Unmanned Aerial Vehicles, and Aerial Targets.' At the same time, no state contracts (agreements) were concluded in the 'Ammunition' category during the specified period," the document states.
Following the publication of this letter, the DPA clarified that since the beginning of the year, it had assumed budgetary commitments amounting to UAH 57.3 billion in the ammunition sector. Over the course of a month, additional agreements were concluded to existing government contracts, funded from the 2025 budget: "That is, within the limits of new funds for new volumes."
However, budgetary commitments under previously concluded contracts do not constitute new contracts or new volumes of weapons. This is merely the work of the accounting department in managing existing agreements. Meanwhile, contracting in the first months of the year is critical for ensuring the army’s supply of weapons.
On Wednesday, 26 February, the head of the DPA held an online meeting with the Public Anti-Corruption Council of the Ministry of Defense.
Before passing on to Zhumadilov’s responses and the DPA’s operations, it is necessary to highlight what happened in January when Maryna Bezrukova was in charge of the agency.
At that time, the list of requirements compiled by the General Staff—on the basis of which ammunition and other items are procured—was only brought to the knowledge of the DPA on 25 January.
Meanwhile, throughout January, a struggle was ongoing over whether Maryna Bezrukova would retain her position and what the future of the agency would be. Additionally, the situation was further complicated by changes to the statutes of the DPA and DOT (State Operator for Non-Lethal Acquisition), which disrupted the mechanism for contract approval. Instead of reviewing contracts, the DPA’s supervisory board was forced to fight over amendments to the statutes.
It should be clarified here that the supervisory authority was supposed to approve large contracts, while the Ministry of Defense sought to retain this control for itself.
After Defense Minister Rustem Umerov dismissed Maryna Bezrukova on 23 January and appointed Arsen Zhumadilov as acting head of the agency, the main arms procurement body turned into a scene straight out of the film Wedding in Malynivka, where old men kept changing their hats because power kept shifting. In the last week of January, the name of the agency’s director was changed twice a day in official registers.
As of 1 February, Zhumadilov became the sole head of the agency. However, instead of initiating new contracts, the focus shifted to staffing changes and restructuring the DPA’s operations—a process that is still ongoing.
Now, here is how Zhumadilov explained this to the Public Anti-Corruption Council under the Ministry of Defense (PACC MoD):
"The situation is as follows. There was a delay caused by two factors. The first was related to the system used to assess a procurement request when there was a general request for a certain quantity with specific allocations. The confirmation logic was as follows: we divide the total amount by the quantity to determine the unit price, which then serves as our estimated cost, we were required to operate within this estimated cost. The market was assessed within this estimated cost, and it looked like we could hardly contract anything."
In other words, the DPA determined that the prices proposed by the General Staff were such that contracts could hardly be concluded.
As a result, the DPA gathered price data that could be used for reference and forwarded it to the General Staff and the Central Directorate for Defense Resources.
The second delay, according to Zhumadilov, concerned the contracting terms for Ukrainian manufacturers, who insisted on signing long-term contracts.
It should be noted that the majority of these contracts involve a single plant—the only one with a fully closed-cycle ammunition production process—which last year supplied substandard 120mm mortar shells and failed to meet delivery deadlines for several other lists of items.
"The conclusion of these contracts, in fact, required an extended processing period, both in terms of regulatory approval and purely within the framework of economic relations with contractors," Zhumadilov explained to the PACC MoD.
However, beyond this, there is another factor that has also significantly slowed down the reform of the DPA.
When he took over as interim director, Arsen Zhumadilov initiated a significant restructuring of operations. This was driven both by his critical view of his predecessor’s management and his desire to reshape the agency according to his own vision.
This is how the head of the DPA described it in the first week of February:
"At the State Operator for Non-Lethal Acquisition, this year, we analyzed processes from the perspective of meeting the army’s needs, whereas at the Defense Procurement Agency, the focus was primarily on procurement. My task is to balance these approaches to ensure that the military supply system operates as efficiently as possible," Zhumadilov said in an interview with Censor.NET.
"Some functions work well. For example, the financial function—well-structured systems, proper processes, and people clearly understand their responsibilities. The analytical function is also fairly well-developed—they know where the contracts are, the figures, and so on. But there is one key observation as of today. The procurement process is set up in such a way that a significant number of decisions are made solely by the head," he added.
As a result, Arsen Zhumadilov has been intensively reshaping the agency’s operations. Due to these changes and restructuring efforts, more than 150 employees have submitted resignation letters.
At a meeting with the PACC, the head of the DPA confirmed that 100 employees had submitted resignations but noted that only 10 had actually left, while the rest might be reassigned to new positions after the agency’s restructuring.
"But in reality, no one has any guarantees that they will get this position. They are bringing in people from DOT, while we are left in limbo, looking for other jobs. I have children—I’m not waiting for Arsen to finish setting up his chessboard," one of the employees told Censor.NET.
"Many people are seriously considering quitting. No one understands how things will function in the new format. Letting go of people who understand the arms market is a mistake—there are very few of them. And this market is not the canned food market. But if anyone tells Arsen this, he gets very angry," added another DPA employee.
"We also don’t understand how we are supposed to work with the proposals because right now they are all collected in a single repository, which only a few people have access to," he noted.
Arsen Zhumadilov explained that all the proposals are indeed stored in a single repository, which can only be opened by a clerk at a designated time.
"What have we done so far? We have launched requests for commercial proposals, ensuring that they are submitted by a specific deadline. Until all proposals are received and the repository is opened, so that there is no (leakage - ed.) of price information. Then, the repository is opened, and all commercial proposals are evaluated simultaneously. This is how tenders work," the head of the DPA explained.
"As for how they are evaluated? We have a specific algorithm for this. If we determine that Ukrainian manufacturers can meet the required demand, then we take into account the fact that, when dealing with Ukrainian production, logistics are generally faster, we can expedite it, and the legal risks are lower in case of non-fulfillment. I am specifically referring to manufacturers, not suppliers, but manufacturers," Zhumadilov said.
In other words, Ukrainian manufacturers will receive orders within the limits of their production capacity.
As for the rest, based on this approach, the process will look something like this: The DPA will assess prices and invite other suppliers to match the lowest bid to ensure supply diversification.
"Or, if they do not reduce their prices to match the lowest offer, we are currently working on an algorithm with the DPP (Department of Procurement Policy ) to explore this issue, in such a case, we will contract a certain volume—say, 65-70%, maybe even 80%—at the lowest price. The second-best offer will be contracted for, for example, 20%," the head of the DPA explained.
But in principle, this is not yet a well-established algorithm. Yet, it should be developed and made public. Otherwise, these games of 'who outsmarts whom' will never end.
But that is theory. Now, let’s talk about practice.
Some time ago, suppliers received a letter from Zhumadilov requesting them to submit commercial proposals. These proposals were supposed to be opened on 24 February, the anniversary of the full-scale invasion, and announced "at a solemn conference."
As you can imagine, nothing was announced on 24 February, and even a week later, no contracts had been signed.
"The first two months are critical for contracting. If we fail to secure contracts during this period, it means we won’t have stable supplies in nine months or a year. This would put us back in the worst days of the DMTP (Department of Military-Technical Policy) when we had to buy everything from shell companies at their inflated prices," sources at the DPA said.
"In reality, there were plenty of offers for several lists of items even without U.S. assistance. But we missed them. And some manufacturers have already told us—sorry guys, but we are selling our ammunition to Africa. Do as you please," he added.
For those asking how domestic contracting compares to the scaling back of U.S. military aid—the difference is significant. To begin with, the volume of international technical assistance has slumped sharply compared to 2022-2023. It is no longer 90% of total supplies. Sometimes it’s 60%, and at times, even lower.
Last year, one of Ukraine’s factories was contracted to cover almost the entire national demand for a specific type of ammunition.
Ukraine can and should develop its defense industry, but often not in the way it is currently being done (and not by reducing fines, as they serve as the customer’s punitive sword—the last safeguard protecting the military from delayed weapons deliveries).
Last year, the DPA contracted more weapons in the first quarter than its predecessors did over the entire year. In an interview with Maryna Bezrukova in May 2024, the figure of 237 billion was mentioned. This was nearly the entire Agency budget for 2024, which totaled 306.1 billion.
Now, work has been stalled for two months. And that’s not all. As far as the author is aware, the MoD has not abandoned its plans to merge the DOT and the DPA. Arsen Zhumadilov supports this merger (as he stated at a meeting with the PACC, without specifying a timeframe). At the same time, representatives of the former PACC opposed merging the agencies precisely due to the bureaucratic complications that would inevitably arise—complications that would disrupt supply chains. And that is simply unacceptable during wartime, no matter who is preparing for which election.
Now, as a famous coach once said, "The result is on the scoreboard."
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After the publication of the article, the DPA provided additional information regarding the contracts. However, this does not change the information concerning new ammunition contracts:
In 2025, 22 contracts totaling UAH 38.2 billion are currently being executed. Of these, 10 contracts worth UAH 2.2 billion were signed in 2024 but have only now begun implementation, while 12 new contracts worth UAH 35.9 billion were concluded in 2025. Additionally, there are 76 carry-over agreements from 2024, under which budgetary commitments totaling UAH 57.3 billion have been made. In the ammunition category, contracts worth UAH 35.9 billion were signed for execution within the current year. In total, the DPA has been allocated UAH 339.3 billion. In the first two months of the year, budgetary commitments amounting to UAH 205.1 billion have already been made, including UAH 199.3 billion in February.
Contracting is ongoing, and the state continues working to ensure that the Ukrainian military receives everything it needs without delays or disruptions.
Tetiana Nikolaienko, Censor. NET
