White List vs Black List: What’s New in the Defense Procurement of the Ministry of Defense?
Anastasia Shuba, representative of the Independent Anti-Corruption Commission (NAKO), member of the Public Anti-Corruption Council at the Ministry of Defense of Ukraine
Last week, the Defense Procurement Agency (DPA) launched a “single window” system for those who want to supply arms to the state. Any manufacturer or supplier of defense products that meets basic qualification criteria can become a verified supplier by filling out a questionnaire on the DPA website. This questionnaire includes a list of products, their estimated costs, supply capabilities, logistics, legal documents, and more.
In this way, the DPA forms a “whitelist” of suppliers – a list of verified, reliable companies capable of fulfilling orders. These companies will be the ones to receive requests for commercial offers in response to official needs formulated by the General Staff.
Why is this important?
Now, the formation of this whitelist will be more transparent and understandable. Previously, the DPA’s supplier list was managed through something as basic as an Excel sheet, making it difficult to track who was responsible for what. Some supplier inquiries got stuck in email threads or were simply lost. This tool aims to help the agency receive up-to-date information from manufacturers and suppliers. Finally, the process of processing commercial proposals will become more streamlined for all participants.
The “single window” offers several advantages:
- It registers all market participants, providing a clearer picture of their production capabilities.
- There’s no need to search for companies – they will come forward themselves using a fairly transparent and understandable mechanism.
- The DPA will gain better insight into the work of suppliers and manufacturers, including quality control.
At the same time, it is equally important to introduce a similar approach for non-lethal procurement at the Department of Logistics (DOT). In the past, the Ministry of Defense attempted to create not a whitelist but a blacklist, where companies that failed to fulfill their obligations were barred from tenders. How did suppliers respond? They simply registered a new company or went to court to cancel the qualification criteria (such as the absence of breaches in previous contracts) that had formed the basis for their inclusion in the “blacklists.”
The “single window” will not become flawless overnight – no reform proceeds without resistance, both within the Ministry and among suppliers. However, to ensure that this tool becomes mandatory and eliminates the risk of reverting to “manual mode,” it must be enshrined in regulatory acts.
How to Formalize the “Single Window” Legislatively?
Cabinet of Ministers Resolution
The fastest and simplest approach is to adopt a corresponding resolution by the Cabinet of Ministers, which:
- Officially introduces a pre-qualification system for suppliers in the form of a “single window.”
- Delegates administration powers to the DPA and DOT.
- Sets criteria for integrity, production capacity, product compliance, etc.
- Establishes the obligation to use the “single window” for procurement during martial law.
Amendments to the Law of Ukraine “On Defense Procurement”
In the long term, the “single window” must be anchored in the relevant law. To do this, amendments should be made to:
- Article 13 (on specific admission procedures for defense procurement suppliers);
- Article 21 or 24 (on the procedures for selecting contractors/suppliers);
- Add a separate article on an electronic pre-verification system (similar to the authorized supplier register in NATO countries or certified traders in the EU).
It is also advisable to include a provision that being on the “whitelist” does not guarantee a contract award but is a necessary condition for participating in procurement processes, thus removing accidental, fake, or affiliated entities from the process.
Of the two paths – approval by the Cabinet of Ministers or the Parliament – the government route is the simplest and relatively short. Such a resolution may take 2 to 10 months to finalize.