BLUF: Defense manufacturers are stuck with hidden costs from state contracts that don’t provide for repairs and maintenance. Military units, likewise, sometimes have to resort to fundraising to cover spare parts for repairs. The issue has the attention of the MoD, and a working group will be established.
Export control reform has run into resistance from the Economy Ministry.
Besomar has updated its interceptor drone with a 12-gauge shotgun.
Farsight Vision and other software developers have created a working group to develop regulations for codification in the MoD. And Dropla Vision has secured €2.4 million in investments.
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THE BIG STORY: Maintenance headaches for defense producers
Ukraine's defense procurement system has transformed throughout the war, and while it has become more decentralized, substantial equipment is still centrally purchased through the MoD and agencies.
But there is a problem with state contracts: They don’t provide for equipment repair or maintenance.
A typical state contract contains regulations that list figures for repair and maintenance, but these fall on the manufacturers or military units, or they don't include long-term servicing.
Ratel M ground drone. Photo by Ratel
This means military units find themselves needing to fundraise for repair costs or wait for work in state-owned workshops, which takes significantly longer due to bureaucratic hurdles, said one serviceman from the 47th Separate Mechanized Brigade who spoke on the condition of anonymity.
What a typical Defense Ministry contract looks like
Procurement is regulated by two Cabinet of Ministers resolutions, №1275 and №452. The first one regulates defense procurement during wartime. The second one concerns the procedure for conducting work on state quality assurance of goods and services for defense purposes.
Neither one of these resolutions mandates repair and maintenance clauses for every contract, creating conditions where contracts don't provide for servicing.
"We essentially have to spend funds that could go to R&D or developing new products. But instead, we're forced to spend $20-30 thousand [per month] on repairs," Taras Ostapchuk, founder of ground drone maker Ratel, told Counteroffensive.Pro.
Resolution 1275 also doesn't establish precise criteria for purchasing spare parts and components. So when a military unit gets an FPV drone, they have to buy additional boards, batteries, and other parts themselves.
In practice, that means that for each drone to fly, you need to spend an additional $50-100, according to Colonel Kyrylo Veres, commander of the 20th Separate Regiment of Unmanned Systems K-2.
Why don't contracts provide for servicing?
The Defense Procurement Agency (DPA), which is in charge of supplying lethal equipment for Ukraine’s Armed Forces, only includes a warranty in its contracts, the agency’s press office said.
This means that a tender for the purchase of 30 DJI Matrice 350 drone platforms, for example, provides for three batteries and one pair of propellers. Although these are consumables on the battlefield, they are among the most widely used in the army, so they won’t last long.
At the same time, the contract provides for warranty service that covers the equipment for one year, provided that repairs are not related to the improper use of the equipment. The state contractor must resolve issues within 30 calendar days. Contracts for repair are drawn up separately by Logistics Command, a separate branch of the Armed Forces, according to the DPA.
Repair of the armored personnel carrier M113. Photo by ArmyInform
This is where two major problems arise from typical contracts:
Servicing equipment after the warranty period expires;
Handling damage to equipment caused by the improper use or failed missions on the battlefield.
Who is responsible for repair costs in these situations – the state, the military, or the manufacturer?
Training service members to properly operate equipment is one important part of this issue. Manufacturers are tackling this by organizing trips for military personnel to receive training, Ostapchuk said.
But this is another cost that falls on manufacturers, as the training can’t be included in the price of the product, making it an additional expense. The state can issue equipment, but this also doesn't include training.
Without training, UAVs or drones are typically lost faster because crews might not have the skills necessary to protect them.
Possible solutions
For contracts between a manufacturer and a military unit, details about equipment maintenance and repairs may be included, Roman Shemechko, founder of Besomar, a drone maker, told Counteroffensive.Pro.
The manufacturer can specify the cost of repairs or replacement of spare parts. But this may then lead to questions about the specific cost of components. Soldiers, for instance, can find similar spare parts on online marketplaces, which will be cheaper. But this does not include the costs of the actual repair process, said Shemechko.
Nebokrai mobile workshop. Photo by the MoD
For armored vehicle manufacturers, equipment repair can take place both in field conditions and at specialized workshops. Technical personnel from the Ukrainian Armory, an armored vehicle producer, work in rear areas, travelling around or on special bases to repair equipment.
The Ministry of Defense is also working on the following changes:
At the end of May, the Nebokrai mobile workshop was approved to carry out drone repair and maintenance. There are two kinds of Nebokrai: 00 provides repairs using the simplest tools, and 01 handles more complex tasks requiring things like a 3D printer and specialized instruments like a soldering station, etc;
The Ministry of Defense also held a meeting with UAV manufacturers to discuss the idea of including training and technical support in drone purchases;
These measures are not enough to fully resolve the problem, and it’s unclear when, or if, the Defense Ministry will wake up to just how many headaches the maintenance issue is causing.
According to Ostapchuk, the MoD plans to create a working group on the matter, but the process and timeline remain unknown. Until then, soldiers and manufacturers are stuck repairing and maintaining weapons on their own.
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BUSINESS LUNCH TOPICS: What our reporting shows!
The State Service for Export Control is butting heads with the Economy Ministry on export reform
The draft law on reforming export control (№549-IV) has become an issue of contention between the State Service for Export Control (SSEC) and the Economy Ministry.
A couple of people at the departmental level in the ministry are resistant to regulations based on European practices, Oleg Tsilvik, interim head of the SSEC, told Counteroffensive.Pro.
The draft law aims to align the SSEC’s work with the EU and provide for the SSEC to receive a special status to develop its own bylaws, instructions, and forms.
The SSEC recently had a meeting with Western partners to agree upon potential changes to export controls. Approval from partners is essential because the EU will screen all Ukrainian regulations to ensure they meet European standards, upon entering the EU, said Tsilvik.
“Now, we need to decide conceptually whether we are moving forward and integrating into line with European requirements, or floating a bill based solely on our national legislation,” Tsilvik said.
The SSEC plans to ask the leadership of the Economy Ministry to join the process. The deadline for the law’s passage is the end of the year, and the draft law hasn't even been sent to the Verkhovna Rada yet.
The Economy Ministry did not immediately respond to a request for comment.
Software developers take on the software codification issue
Several software manufacturers and associations, including Farsight Vision and Techosystem, have formed a working group to establish clear regulations for the approval of software to be used in the military.
They recently developed a proposal on legislation for the codification of software.
The main issues are the slow pace of regulatory reforms and unclear legislation. There is Resolution 1275, which regulates procurement during wartime, but this doesn't include direct guidelines for software procurement.
The working group is communicating with a number of industry lawyers and consultants connected to the Ministry of Digital Transformation to create regulations. The first results are expected in early September-October, Viktoriia Yaremchuk, co-founder of Farsight Vision, told Counteroffensive.Pro.
Read our detailed coverage of the software codification issue here.
Ukrainian drone interceptor gets an upgrade with a shotgun
Besomar, a Ukrainian drone company, has updated its 3210 interceptor drone to include a 12-gauge shotgun. Now it has four barrels to strike Russian reconnaissance and dummy drones like the Orlan-10, Gerbera, or Zala.
The interceptor drone has an AI system that helps to aim at the target. To strike down the enemy’s drone, the 3210 should be at a distance of between six and 10 meters, Roman Shemechko, co-owner and founder of Besomar, told Counteroffensive.Pro.
Interceptor drone by Besomar. Photo provided by the company
The onboard weapon system is designed to be recoil-free, which is achieved by firing another round in the opposite direction.
Besomar has also equipped its drone with an air brake system, enabling the operator to respond more quickly to changing situations. The drone can decelerate from 160 km/h to 80 km/h in two seconds, Shemechko said.
This is accomplished by using a special engine mode controlled by software. The developers also aim to maximize drone automation so that the operator's role is ultimately minimized in future updates. Currently, the software can automatically adjust flight paths based on weather conditions and guide itself to the target during the final approach.
Dropla Vision has secured €2.4 million from Maj Invest
Dropla Vision, a Danish-Ukrainian startup that specializes in AI demining technologies, has secured a pre-seed investment from Maj Invest, a Denmark-based investment firm, EIFO, and Final Frontier.
The investment will be used to scale up production, improve the AI system, and integrate into the NATO military management framework C4ISR, V’yacheslav Shvaydak, founder of Dropla Vision, told Counteroffensive.Pro.
Of the company’s flagship product, Shvaydak said, “The Blue Eyes [software program] is a standalone computer for detecting explosive products and drones in ambushes, which connects to a video stream and operates autonomously. It does not connect to cloud computing servers and has a battery that lasts for four hours of operation.”
Ukrainian orders/legislation we’re tracking:
By: Oksana Zabolotna
Financial compensation for military personnel assigned to the Innovation Development Fund
Resolution of the Cabinet of Ministers of Ukraine dated August 1, 2025 № 933
Why it’s important:
This decision gives servicemen assigned to the Innovation Development Fund the same status and benefits as those on combat missions. Soldiers who both fight and work on technologies like drones, electronic warfare systems, and communications know the army’s real needs. Their combat experience makes these innovations more practical. Proper financial support helps create more effective solutions.
Proposals:
During martial law, service members assigned to the Innovation Development Fund under the Armed Forces of Ukraine receive up to $2,452 per month in extra pay (based on time and location of service) and a one-time frontline payment of $1,700;
In the event of death or fatal injury, a lump sum ($364,000) is provided at the expense of the Fund.
Stage:
Entered into force on August 5, 2025.
Initiator:
Cabinet of Ministers of Ukraine.
What’s next:
Implementation of the resolution.
ON THE MOVE: Professional movement, promotions and industry news.
Know someone in the defense tech space who has made a professional move? Drop us a line at [email protected]!
Liubomyr Diak became a testing manager at Snake Island Institute, an NGO that aims to bolster Ukraine-U.S. strategic ties in defense and security.
Rasmus Basilier has started a new position as development manager at Millog Oy, a Finnish company that specializes in maintenance, logistics, and support of defense equipment.
Oleksii Solntsev has joined MaXon Systems, an air defense developer, as CEO. He also works as a tech industry speaker at YEP Accelerator.
Sergiy Koshman became the head of partnerships and strategic engagement at Helsing, a drone maker. Previously, he worked as managing director at Frankenburg Technologies in Ukraine.
30 SECOND ELEVATOR PITCH:
Tank Bureau is a manufacturer of UGVs for logistics, combat modules, medical evacuation, and engineering applications - including both mine-laying and demining systems.
Developers plan to launch several new products, but the main task is to improve service. A key shortcoming of UGV manufacturers is that, after selling their solutions, they provide only remote support. The company plans to create a service model that would allow deployment directly to the line of contact, with a team of engineers responding promptly to breakdowns and issues.
“We are planning to attract investments starting from $1 million,” explained Nazar Pryimak, director of Tank Bureau.
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