Ukrainian Council of Defence Industry calls for continuity in defence procurement amid changes to the system: full statement

The Ukrainian Counсil of Defence Industry (UCDI) has called on the Ministry of Defence to ensure continuity in contracting Ukrainian defence companies and supplying the Defence Forces with the weapons and military equipment they need. The association published its position amid a public debate and possible changes to the defence procurement system.

According to an estimate from industry participants cited by UCDI, up to 25% of the sector’s available production capacity is currently contracted. Defender Media publishes the full statement.

“For us, this is not about individuals. Any personnel, structural or procedural changes must not affect the continuity of supplying the Defence Forces with weapons and military equipment.

As of mid-August, one of the key problems facing Ukraine’s defence industry remains insufficient contracting. According to an estimate from industry participants, up to 25% of the available production capacity is currently contracted. Manufacturers of various types of weapons and military equipment remain without sufficient orders.

This is not just a problem for companies.

Weapons production has a long cycle. After a contract is signed, manufacturers need to purchase components, organise production, conduct testing and acceptance procedures, and only then deliver the finished products to the military.

Therefore, a contract that is not signed today cannot be compensated for by simply increasing funding a few months later. Delays in contracting in August create a risk for supply volumes in the autumn and winter.

At the same time, for the industry itself, a prolonged period without sufficient domestic orders creates a risk of losing engineers and production teams, reducing production lines, decreasing working capital and limiting the ability to invest in improving and scaling Ukrainian developments.

Over the past few years, Ukraine’s defence industry has significantly expanded its capabilities in response to the state’s demand and the needs of the military. It is important not to allow these capabilities to be lost because of interruptions in contracting.

Financing remains a separate challenge. International partners’ assistance is critically important for Ukraine, but individual financial instruments have their own terms and limitations and cannot fully replace domestic resources for purchasing the entire range of equipment needed by the Defence Forces.

The Ukrainian Arms Manufacturers Council does not assess what the procurement model should look like, which procedures should be used or which structure should be responsible for implementing them. Defining these mechanisms is the responsibility of the state.

For the market, the result is what matters: the military must receive the necessary weapons and military equipment continuously and on time, while Ukrainian manufacturers must receive a sufficient volume of orders to meet these needs today and retain the capacity to produce tomorrow.

In this regard, the Ukrainian Arms Manufacturers Council calls on the Ministry of Defence to:

1. Ensure continuity in contracting Ukrainian manufacturers, regardless of personnel, structural or procedural changes in the defence procurement system.
2. Prevent a gap between existing and subsequent orders, taking into account the length of the production cycle and the need to purchase components in advance.
3. Ensure sufficient and predictable funding for the procurement of weapons and military equipment needed by the Defence Forces, including equipment that cannot be fully financed through available partner programmes.
4. Provide manufacturers with a clear order horizon that will allow them to plan production, retain teams, purchase components and continue developing Ukrainian technologies.
5. Maintain an ongoing dialogue with the industry on the current level of contracting, production capabilities and risks to future deliveries.

The Ukrainian Arms Manufacturers Council is ready to provide the Ministry of Defence with aggregated data on production capabilities and the level of contracting, and to contribute to finding solutions.”