NSPA: buy-and-sell the NATO way

Written by Anton Khimiak, Analyst HWAG/UCMC

This series of materials is dedicated to the complex and vital relationship between NATO and Ukraine. This series is designed to cover all the challenges, opportunities and features of the interaction between the alliance and Ukraine as fully as possible. Considering the Russian threat, achieving the most detailed understanding of potential hybrid threats and the possibilities of countering them is worthwhile.

The integration of Ukraine into the NATO system is one of the strategic goals of the Ukrainian government. Cooperation with the alliance increases Ukraine’s security level and opens up vast opportunities for partnership with the West.

To effectively work in the direction of defense procurement and supply, the Ministry of Defense of Ukraine created two agencies: the Agency for Defense Procurement and the Agency for Resource Provision of the Armed Forces. According to the former Minister of Defense Oleksiy Reznikov, they were launched according to NATO standards in supply and logistics.

A key player in NATO’s functioning system is the NATO Support and Procurement Agency (NSPA). Among the main tasks and functions of the NSPA are supplement, logistics, technical support and ensuring the operational efficiency of NATO. In a high-intensity war, Ukraine must have effective resource replenishment procedures and the logistical capacity to deliver these resources.

What is NSPA?

The Agency is the executive body responsible for supplying NATO’s armies. At first glance, the Agency duplicates the role of national defense ministries. However, this is not correct because NATO’s supply structure is much more complex and complex.

The graphic shows the role of the Agency inside the NATO Support and Procurement Organization (NSPO)

The NSPA’s first and most important task is to provide the alliance with the necessary resources by coordinating and managing the procurement of various goods and services for NATO members. This covers military equipment and multiple materials, fuel, medical supplies, etc. The NSPA ensures that all necessary resources are available and ready for use in military operations.

Logistics is another crucial area of activity of NSPA. The Agency provides logistical support for NATO operations, including transporting, storing, and distributing materials. Timely and reliable delivery of resources to the area of military operations is a crucial aspect of the successful functioning of the alliance.

The Agency also provides technical expertise and consultations on military equipment, maintenance, and modernization. It helps maintain and improve the functionality of military equipment critical to operational readiness. Ensuring technological readiness is essential not only to ensure NATO’s security, but also to ensure readiness to respond to global challenges and threats.

However, regarding maintenance and modernization, questions arise about NATO’s ability to interact with national defense ministries. With the beginning of the full-scale war of the Russian Federation against Ukraine, several times there were statements about the limited working equipment stocks in key NATO countries’ warehouses.

“Bundeswehr revelations: 30% Working PzH 2000, three days’ supply and why Berlin blocked the Marder for the AFU”
“Problems with the Puma IFV were known,” – Lambrecht

An important aspect of NSPA’s role is to ensure NATO’s responsiveness. The Agency performs various tasks to ensure the readiness and successful execution of military operations. Such operations may include preparing and providing resources for military maneuvers, international missions, and other activities that require coordination and joint efforts.

For example, the NSPA evacuated foreign nationals from Kabul after withdrawing US and NATO forces from Afghanistan. The Agency was also involved in the supply of equipment to Ukraine on the eve of the war.

Strategic airlift capability C-17 delivers supplies to Ukraine on behalf of Lithuania

Why is it Important for Ukraine?

NSPA is an essential partner of Ukraine in matters of ensuring defense capability. It is worth noting that this cooperation is not without problems, but it existed before the full-scale war and continues today.

Procurement specialists of the Ministry of Defense will undergo training at the NATO Agency for Support and Procurement

As of 2022, NSPA had a permanent representative of the Ministry of Defense of Ukraine, as stated by the then Deputy Minister of Defense Oleksandr Nosov. In April 2023, Oleksiy Reznikov declared that Ukraine and the alliance had agreed on the closest formats of cooperation in the field of procurement and “reached an unprecedented level of interoperability with NATO”.

Anti-corruption is critically important for Ukraine on its way to NATO integration. Corruption undermines the effectiveness of defense efforts and the trust of allies and partners. Most of the practices adopted by the Agency were aimed at forming an effective and transparent defense procurement system.

“Corruption in Ukraine slows down the supply of arms” – President of Lithuania Gitanas Nauseda

However, the Ukrainian Agency immediately faced criticism regarding personnel appointments. Volodymyr was appointed head of the Agency Pikuzo, and his deputy Oleksandr Kovalenko both have a negative reputation trail and corruption experience. Questions also arose regarding the management of the department’s funds.

The head of the Agency also stated that despite the willingness of the former leadership of the Ministry of Defense to transfer all purchases to the department of the newly created institution, this has not happened so far. Part of the purchases still occurs through the mediation of Ukrspecexport (a state-owned enterprise with the right to import and export military and dual-purpose goods) and the ministry itself.

Thus, Ukraine received a new body that duplicates responsibilities and cannot do all necessary activities. However, it seems that only this body will interact with NSPA in the field of procurement in NATO countries in the future.

A Russian Trace

Since the discrediting of the Ukrainian authorities and the influence on the supply of weapons to Ukraine is one of the main directions of the Kremlin’s methodology, their intervention was inevitable. The Oleksandr Nosov mentioned above claimed that due to the anti-Ukrainian position of some NSPA members, part of the contracts concluded between the Ministry of Defense of Ukraine and the NATO Agency were disrupted or postponed.

The newly established Defense Procurement Agency imports goods in the “special operations” format. Therefore, we can assume that some weapons that pass through this body are supplied by countries that do not want to advertise their ties with Ukraine despite Russia’s influence.

“We are conducting a number of special operations for the supply of weapons to Ukraine”, – Volodymyr Pikuzo

Procurement transparency is a double-edged sword. Ukrainian agencies understand that the Russians are closely monitoring the supply of weapons to Ukraine and are trying to counter it, at least in the information field. However, the closure of large contracts can lead to significant corruption risks, which, as a result, strongly affects the reputation and desire of partners to cooperate.

What next?

NATO’s experience in defense procurement is significant for creating an effective system of providing the Ukrainian army with everything it needs. However, simply copying alliance structures and standards in this area will not magically solve all the chronic problems of the procurement process.

In summary, Ukraine’s integration into NATO is a complex and multifaceted process that requires coordination of efforts from many directions. The role of the NATO Support and Supply Agency (NSPA) in this process is invaluable as it contributes to NATO’s operational security and readiness. Ukrainian cooperation with NSPA is a qualitative driver of improvements, but efficiency cannot be achieved without fully working out the problems with the responsibility of departments and corruption risks.

It is necessary to consider in detail the processes directly related to the defense capability of Ukraine to achieve greater efficiency. It is also essential to remember that the state is in an intense war, so minimizing the emerging threats in their infancy is necessary. This especially applies to the corruption component, which, as a result, is actively used as a propaganda narrative of the Russian Federation to discredit the Ukrainian authorities.