As billions of dollars flow from the Ukrainian military to domestic arms makers, with funding assistance from European donors, much of the spending is shrouded in wartime secrecy. That worries analysts and activists who say that Ukraine has made little progress in reining in a long history of corruption in military procurement.
One focus of concern for government auditors reviewing military spending is Kyiv’s repeated awarding, without explanation, of contracts to companies that made higher bids than their competitors. Internal government audits reviewed by ‘The New York Times’ show dozens of such contracts signed over a period of a little over a year, as well as cases of late or incomplete deliveries and prepayments for weaponry that never arrived.
Government auditors who examined purchases made by Ukraine’s Defense Procurement Agency from early 2024 until this March did not level accusations of theft or embezzlement, though they did refer some contracts to law enforcement agencies for evaluation.
But their 465-page review found that dozens of contracts for artillery shells, drones and other weaponry were not awarded to the lowest bidder. The difference between the low bids and the contracts actually awarded by the procurement agency totaled at least 5.4 billion hryvnia, or $129 million, the audits showed.
“They overpay for unknown reasons and without justification,” said Tamerlan Vahabov, a former adviser to the agency, a branch of the Defense Ministry.
Sometimes, lower bids are passed over with plausible explanations, said Olena Tregub, executive director of the Independent Anti-Corruption Commission, a Ukrainian nongovernmental group. “That justification can be true, or it can be corruption,” she said.
The government created the procurement agency as an independent branch of the Defense Ministry in 2023, after Ukrainian news media reported on a flurry of questionable spending, including huge overpayments for eggs for soldiers’ rations and for winter coats. Those revelations prompted the resignation of a defense minister, Oleksii Reznikov.
The audits tracked multiple contracts that led to late or incomplete deliveries, and instances when prepayments were made but companies failed to deliver weapons. They identified contracts signed with companies without an effort to first verify that the winners actually had manufacturing sites, such as suitable basement workshops.
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