More than a week into a standoff between Ukraine’s defense minister and the official overseeing weapons procurement, the situation remains unresolved, causing disruptions in arms contracts, according to Ukrainian defense companies.
The arms industry trade group in Ukraine reported that over 80 defense companies, which represent about a third of last year’s supplies to the military, are currently unable to receive payments for completed orders or sign new contracts. One specific contract for the production of 155-millimeter artillery rounds has been put on hold, as confirmed by the ammunition producer.
While the standoff is not expected to have an immediate impact on arms supplies to Ukrainian troops, as current deliveries are based on previous contracts, prolonged issues could jeopardize future supplies at a critical time for the Ukrainian Army, which is facing challenges against Russian advances on the battlefield.
The conflict centers around the leadership of Ukraine’s defense procurement agency, which had a budget exceeding $7 billion last year. Defense Minister Rustem Umerov recently dismissed the agency’s director, Maryna Bezrukova, citing “poor procurement planning” and delays in supplies to the front line, and appointed an acting head.
Bezrukova has refuted the claims of mismanagement, asserting that her dismissal was illegal due to an extension of her contract by the agency’s supervisory board. She stated on Monday that she would not resign.
The situation has escalated, with both Bezrukova and the new acting head, Arsen Zhumadilov, working from the agency’s headquarters, leading to confusion among international partners and defense companies regarding contract signings.
Serhiy Honcharov, head of the National Association of Ukrainian Defense Industries, expressed concerns about the disruption, stating, “The normal day-to-day work of the defense procurement agency is just blocked. Who is actually in charge? No one knows. In this chaos, it’s impossible to sign contracts.”
Serhiy Bulavko, head of the procurement control department at the defense ministry, reported that there were currently “no disruptions in weapons supplies” and that “contracting is underway.”
The turmoil in Ukraine’s defense sector poses risks to Kyiv’s efforts to secure ongoing support from allies, particularly from the United States. A significant aspect of these efforts includes a new mechanism to fund Ukrainian weapon production with Western money, intended as an alternative to direct arms supplies.
Last year, this mechanism facilitated the production of half a billion dollars’ worth of weapons, with plans to double that amount this year.
The procurement agency was established last year to combat corruption in the procurement process, a move that received praise from Ukraine’s Western partners. The agency is responsible for purchasing weapons from both domestic and foreign producers.
Olha Stefanishyna, Ukraine’s minister for European integration and justice, expressed concerns that the standoff sends a negative message to Kyiv’s partners, noting that NATO members have raised questions about the issue in private meetings. She commented, “Such aggressive public communication does not help Ukraine, inside and outside.”
Umerov’s attempt to dismiss Bezrukova by not extending her contract has led to calls for his resignation; however, he appears to have the support of President Volodymyr Zelensky, who stated that the defense minister has the authority to take necessary actions to prevent delays in supplies.
Vladyslav Belbas, head of Ukrainian Armor Design and Manufacturing Co., indicated that a contract for producing 155-millimeter artillery rounds, expected to be signed by late January, has been delayed due to the ongoing dispute. Bezrukova confirmed that the contract remains unsigned.
Belbas highlighted the impact of the uncertainty on production capabilities, stating, “If we don’t know what’s happening, how can I scale the production or at least plan for the production?”