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Introduction
In the crucible of war, Ukraine has forged a revolutionary new approach to defence procurement. The nation has embarked on a rapid and profound transformation, dismantling an opaque, Soviet-era system and replacing it with a dynamic, professionalised, and increasingly NATO-aligned landscape. This shift from a state-monopolised, bureaucratic model to a competitive and transparent architecture is driven by the urgent demands of the battlefield and a commitment to innovation.
For international defence companies and technology innovators, this new reality presents a significant opportunity to contribute to one of the most consequential defence efforts of our time. The system is now designed to integrate direct battlefield feedback and empower private sector solutions, creating a unique environment for proven, cutting-edge technologies. Success, however, requires a clear understanding of the new rules of engagement.
This guide serves as a practical roadmap for navigating Ukraine's reformed defence procurement process. It outlines the key institutions, procedures, and strategies necessary for foreign companies to effectively engage with and supply the Armed Forces of Ukraine, ensuring that the most effective solutions can reach the front lines with the speed that modern warfare demands.
The Strategic Opportunity: Why Engage with the Ukrainian Market?
Engaging with Ukraine's defence market offers a strategic partnership that extends far beyond a simple commercial transaction. For innovative companies, it represents a unique opportunity to align with a battle-hardened and forward-looking defence ecosystem. The benefits are threefold, offering unparalleled operational insight, a dynamic innovation environment, and the chance to contribute to a mission of global significance.
First, Ukraine offers the world’s most demanding operational environment for testing, refining, and proving the value of defence technology. Products that succeed on the Ukrainian front line gain an irrefutable mark of quality and effectiveness. The direct feedback loop from soldiers and commanders provides invaluable, real time data that can accelerate product development cycles in a way that no peacetime trial ever could. This is not a simulation; it is the ultimate validation of a product's resilience, utility, and impact, resulting in a powerful credential recognised globally.
Second, partnership with Ukraine provides access to one of the most agile and motivated defence innovation ecosystems in the world. Having mastered rapid, battlefield-driven adaptation, Ukrainian engineers and military units excel at identifying urgent needs and quickly developing or integrating solutions. For foreign companies, this creates an opportunity to collaborate with a highly skilled and creative partner, fostering joint ventures, technology transfers, and co-development projects that push the boundaries of modern military capability. It is a chance to move beyond the traditional supplier-client relationship and become part of a truly collaborative innovation cycle.
Finally, contributing to Ukraine's defence is a direct investment in European and international security. Supporting the Armed Forces of Ukraine is a vital mission that helps to contain a strategic threat and uphold a rules-based international order. By supplying and partnering with Ukraine, companies are not just entering a new market; they are strengthening a critical front line of defence, demonstrating a commitment to shared values, and solidifying their role as a serious partner in global security.
Understanding the Key Players: The New Procurement Architecture
Navigating Ukraine's defence market requires a clear understanding of the new institutional architecture. The system has been fundamentally redesigned to enhance efficiency, transparency, and accountability, distributing responsibilities among specialised bodies. This structure ensures that procurement is driven by genuine battlefield needs and managed with professional oversight.
The General Staff of the Armed Forces of Ukraine (AFU)
At the top of the requirements process is the General Staff of the AFU. This body holds the primary authority for defining the military's needs. Based on direct, real-time feedback from the front lines, the General Staff forms the official list of required weapons, ammunition, and equipment. This list is then submitted to the Ministry of Defence for formal approval, becoming the basis for all procurement activities. This approach ensures that acquisitions are directly tied to operational realities and the urgent priorities of the war effort, rather than bureaucratic planning cycles.
The Defence Procurement Agency (DPA)
The Defence Procurement Agency is the sole state entity responsible for the procurement of all lethal equipment. Established to professionalise weapons acquisition, its mandate covers everything from small arms and ammunition to advanced unmanned aerial vehicles (UAVs) and sophisticated military hardware. The DPA's primary strategy is to increase direct contracting with both Ukrainian and international manufacturers, reducing reliance on intermediaries. For foreign suppliers of armaments and military technology, the DPA is the central and most important point of contact.
The State Logistics Operator (DOT)
Complementing the DPA, the State Logistics Operator handles all non-lethal procurement. Its mandate covers the vast range of goods and services required to sustain a modern military, including food, fuel, clothing, and personal protective equipment. A key objective of the DOT is to bring maximum transparency to these historically corruption-prone areas. To achieve this, the DOT conducts its procurement through the ProZorro public e-procurement system, an electronic auction platform that promotes open competition and is credited with generating significant cost savings for the state.
A Step-by-Step Guide to Market Entry
Successfully entering Ukraine's defence market requires a proactive and strategic approach. While the system is now more structured and transparent, it retains a unique, battlefield-driven dynamic. The following five steps provide a clear pathway for foreign companies to navigate the process, from initial engagement to long-term partnership.
Step 1: Generate Demand from the Front Lines
While the General Staff sets official requirements, a powerful "bottom-up" procurement approach has emerged. A proven strategy is to get your equipment directly into the hands of soldiers for field testing. By donating or loaning trial kits, such as drones, sensors, or vehicles, to front-line brigades, your product can be evaluated in the most demanding conditions. If it proves its worth, a commander's endorsement is a powerful catalyst, often leading to the product being fast-tracked for inclusion in the official procurement catalogue. This battlefield validation is a crucial first step that can turn a trial into a priority acquisition.
Step 2: Achieve Official Codification
Once there is military interest in your product, it must be formally registered within Ukraine's procurement system. A critical step in this process is codification. To be officially procured, any piece of equipment must have a NATO Stock Number (NSN) or an equivalent national code. This is a non-negotiable bureaucratic requirement that allows the item to be referenced in contracts and tracked through the logistics chain. Companies are strongly advised to begin the codification process as early as possible to avoid delays.
Step 3: Become a Verified DPA Supplier
Before any contract for lethal equipment can be awarded, a company must be formally vetted and approved by the Defence Procurement Agency. The DPA operates a single-window application process that requires a full suite of legal and corporate documents. This is a rigorous due diligence exercise. The DPA will scrutinise your company's product range, production capacity, pricing, and ownership structure. Full transparency is mandatory, and strict geopolitical red lines are enforced: any direct or indirect ties to Russia, Belarus, or Iran will lead to immediate disqualification.
Step 4: Understand the Direct Contracting Process
The procurement process for lethal and non-lethal equipment differs significantly. While non-lethal goods are often purchased via the ProZorro electronic auction system, armaments, ammunition, and related military services are procured differently. For these sensitive items, the DPA uses a direct contracting model. Once a company is on the DPA's list of verified suppliers, it will receive direct Requests for Proposals (RFPs). Contracts are then awarded based on the commercial offers submitted, rather than through an open public tender.
Step 5: Plan for Localisation
For companies seeking a sustainable, long-term partnership, establishing a local presence in Ukraine is becoming strategically vital. The Ukrainian government is focused on building a resilient domestic defence industry to secure its supply chains and foster technology transfer. Foreign manufacturers should explore options such as producing components locally, entering into licensing agreements with Ukrainian factories, or establishing maintenance and training facilities in-country. Taking these steps demonstrates a serious commitment that can strengthen ties with Kyiv and may lead to preferential treatment and future opportunities.
Common Pitfalls and How to Avoid Them
While Ukraine's reformed procurement system offers significant opportunities, navigating it requires an understanding of its unique characteristics. Foreign companies can encounter several common pitfalls that may delay or derail their entry into the market. Awareness of these challenges is the first step to avoiding them.
Mistake 1: Assuming a Traditional "Top-Down" Sales Process
A frequent error is to approach Ukraine with a conventional, top-down sales strategy focused exclusively on engaging with ministry officials. This ignores the powerful "bottom-up" validation process that has become a defining feature of the new system. Waiting for a formal tender or requirement to be issued without first proving a product's value on the battlefield is a flawed approach. The most successful entrants are those who actively generate demand from the front lines. Ignoring the opportunity to gain a commander's endorsement through field trials means overlooking the most influential voice in the procurement process.
Mistake 2: Submitting Incomplete or Inconsistent Documentation
The Defence Procurement Agency's verification process is not a mere formality; it is a thorough due diligence exercise designed to ensure that all suppliers are credible and reliable partners. Submitting an application with incomplete, inconsistent, or inaccurate corporate and financial paperwork is a guaranteed way to cause significant delays. Any discrepancies will be flagged, and the application will be stalled pending clarification. Companies must be meticulous in preparing their documentation, ensuring full transparency regarding ownership, financial health, and legal history to facilitate a smooth and timely approval.
Mistake 3: Ignoring the Importance of Localisation
Treating Ukraine as a simple "export and forget" market is a short-sighted strategy that is likely to fail in the long term. The Ukrainian government has made it clear that it prioritises partners who are committed to helping build its domestic defence industry. Companies that demonstrate a willingness to invest in the local ecosystem, whether through component production, licensing agreements, or establishing maintenance facilities, are viewed as strategic allies. Those who neglect this aspect risk being overtaken by competitors who show a genuine commitment to a deeper, more sustainable partnership.
How Defence Ukraine Can Help: Your Partner in Navigation
Successfully navigating the Ukrainian defence market requires expert guidance and a trusted local partner. Defence Ukraine was established to bridge the gap between global innovators and Ukraine's urgent defence needs, providing the specialised support necessary to overcome the challenges outlined in this guide. Our programmes are designed to de-risk market entry and accelerate the deployment of critical capabilities.
Tech Pilot Programme
Directly addressing the challenge of generating demand from the front lines (Step 1), our Tech Pilot programme facilitates battlefield trials for new technologies. We work with the General Staff and specific military units to place promising equipment into the hands of end-users for rigorous operational evaluation. The programme manages the logistics of the trial and, crucially, collects the structured feedback and commander endorsements that are vital for a product's inclusion in the official procurement catalogue.
Market Access Programme
For companies ready to formalise their presence, our Market Access programme provides comprehensive support for the critical administrative and strategic steps. We offer expert guidance on achieving NATO Stock Number (NSN) codification (Step 2) and provide hands-on assistance in preparing the complete, meticulous documentation package required for the DPA's verification process (Step 3). Furthermore, for those committed to a long-term partnership, we help identify and vet potential local industrial partners, facilitating the localisation strategy that is key to sustainable success (Step 5).
Funding Access Programme
For companies that have proven their product's value and are looking to scale up their operations to meet Ukrainian demand, capital can be a significant hurdle. Our Funding Access programme connects high-potential defence technology companies with a network of venture capital firms, private equity funds, and strategic investors who have a specific interest in the sector. We help innovators secure the necessary financing to expand production, establish a local presence, and meet the evolving needs of the Armed Forces of Ukraine.
Conclusion
The transformation of Ukraine's defence procurement system represents a pivotal shift towards transparency, professionalism, and alignment with NATO standards. The market is now more open to global innovators than ever before, creating unprecedented opportunities for partnership and collaboration. The path to entry is clear, but it demands diligence, strategic engagement, and a genuine commitment to supporting Ukraine's long-term security goals.
While the steps outlined in this guide provide a clear roadmap, success requires expert navigation. The process is rigorous, and understanding the unique, battlefield-driven dynamics of the ecosystem is critical. Defence Ukraine is committed to serving as your trusted partner in this journey. We exist to help innovators engage effectively, de-risk the entry process, and ensure that the most impactful technologies can contribute directly to the defence of Ukraine and the security of Europe.
