Parliamentary draft resolution #10071 of September 19, 2023
Decision-maker: the Parliament
Who is affected: the Cabinet of Ministers of Ukraine, Ministry of Defense, and suppliers participating in defense procurements
Summary of the resolution:
- the Parliament wants to order the Cabinet to pay compensation for justified expenses and allow the contractors of the Ministry of Defense to make a profit at rates defined by the Cabinet Resolution #363-2021: 1% of costs for foreign components, 30% — for domestic goods and services. Agent’s fee cannot exceed 3% (25% for UAV manufacturers) for defense procurements.
What is wrong:
- the Parliament directly interferes in the operational activities of the Cabinet because the latter fails to ensure profit for suppliers participating in defense procurements
- the resolution facilitates the false impression that the report by the State Audit Service regarding the verification of defense contracts and overpricing was annulled.
Background information:
- at the end of June, the State Audit Service checked the contracts of the Ministry of Defense and reported violations that amount to 2.5 billion UAH. According to the interpretation of the Service, Ukrainian manufacturers working with the Ministry of Defense should not profit from contracts with the state. The Ministry of Economy stated that this interpretation is wrong. Currently, the report is being challenged in court.