Andriy Zagorodnyuk: The Ministry of Defence Reform Office’s main projects

Author: Yurii Butusov

41-year-old Andriy Zagorodnyuk took the reins of the Ministry of Defence Reforms Project Office (RPO) three years ago. Since then, RPO has become a unique example of cooperation between civil society and the defence ministry. We present a long read on the Reform Office’s key projects.

- What is the MOD Reforms Project Office?

- The Reforms Project Office (RPO) is an advisory body of the Ministry of Defence of Ukraine (MOD) working on specific projects and areas of reform of the Armed Forces of Ukraine (AFU). We are not structurally part of the MOD or General Staff (GS).

This gives us a number of advantages - for example, greater freedom. If we were a department, we would be "constrained" by the department’s standard provisions and couldn’t, if necessary, communicate freely vertically and horizontally with the MOD, GS, and other state authorities.

That’s why departments often turn to us when they see that a problem goes beyond their scope of functionality, and we help them establish horizontal links.

The ideas for many of our projects didn’t come from us, but from other structural divisions of the Armed Forces or ministry. For example, we are actively supporting the development of the sergeant corps. This program existed before us. In certain areas we bring in experts and go where we can help.

We currently have a team of 18 permanent civilian specialists. That doesn’t include experts and volunteers we work with often, who even in a formal sense aren’t employees.

Many of the experts are brought in for a short term. For example, the housing reform project (Glen Grant’s project) had 7  specialists that were hired by a partner organization for a year.

We do most of the work together with foreign advisors seconded to the MOD. At some point RPO became, and in many ways remains, a kind of bridge between them and certain departments of the ministry, because it was easier for foreigners to explain many nuances first to us, and then we would try to implement them in the MOD.

We work with advisors of various levels, including high-level (DRAB – Defence Reforms Advisory Board) and mid-level. And that was always the case - from the beginning (mid-2015) when there were only 3 advisors, to today, when there are almost 70.

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-Tell us about your projects. Let’s start with food.

The food project started in March 2015. That autumn we experimented at two military units: Western Naval Base in Odesa and National Ground Forces Academy in Lviv.

The experiments were very successful. Satisfaction with food at these units exceeded 90%. But in the first half of 2016 it was "frozen": we had to fight to have it "unfrozen", make changes to resolutions of the Cabinet of Ministers, and carry on.

In the second half of 2016 we received permission from the defence ministry to develop a concept of systemic food reform in the Armed Forces. It was signed off on in early 2017 and the decision was made to move forward with implementation.

In 2017, 23 military units switched to the new system, and this year we are planning to add another 53 units (60-70 thousand people are affected by the reform, which accounts for 50% of all personnel the MOD feeds).

- At this rate, how long will it take to switch the whole army to the new system? When will all combat units switch over?

- Almost all combat units will switch to the new food system by the end of this year.

But it’s not a question of replacing one principle with another (internal cooks vs. outsourced). We’re talking about the complete transformation of the food system. First, nutrition standards are changing (a so-called food "Catalogue" was created, replacing standards dating back to the 1960s). Second, the philosophy of the process is changing. In addition to caloric value, we’re introducing principles of balanced and diverse meals.

From now on, each military unit is responsible for the technical condition of equipment and food quality. Roughly speaking, there is always a person responsible.

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How was it before? In previous years, the Public Procurement Department centrally announced a tender, and if there were any issues with the food, you had to practically go to the defence minister.

- How has the format of the contract changed? Is the brigade a party to the contract?

- In some cases, yes. But in any case, the brigade commander can, for example, suggest that a supplier of a product be replaced if he isn’t doing his job. In the past that was nearly impossible.

- So, all the old companies are no longer working with the MOD?

- They are, just under the new system. In the past, food supply was fully outsourced. The units did nothing; they just rented their infrastructure and had nothing to do with food. Now military units independently order food using the catalogue and control the quality of products delivered.

 The contract has also changed. Units can now have it terminated and demand fines. In the past they couldn’t do this. We did a lot of work to bring these documents in line with commercial relations.

- I understand an unprecedented amount has been invested in infrastructure and equipment?

- That is correct. In 2017, approximately UAH 100 million was spent on renovations and approximately 70 on equipment.

- What is the cost of feeding a soldier at a military base?

- The expenditure part hasn’t changed – the Ministry of Finance wouldn’t have allowed us to increase the budget significantly. We traded 7 lots on the Prozorro e-procurement system, with prices ranging from UAH 67.68 to 81.30 (average – UAH 76).

The cost hasn’t changed, but the cost structure has: it used to include high overhead expenses (rent, etc.), and now it’s only the cost of the food and logistics to deliver the food to the unit.

- Before, 40% of the cost of feeding a soldier was overhead. What is it now?

- That’s right. "Before" (and where the new system isn’t yet in place) a tender was held that was won by the cheapest offer. And like in any commercial situation, "the cheapest offer" meets only the minimum requirements as defined by law - so you just had to meet the norm. If you’re better than the norm, and more expensive, you’re guaranteed to lose the tender.

As a result, the system motivated market players to be worse. Prices drop during trading, but profits are still factored in one way or another, and the soldiers get what remains. The old system guaranteed bad food. The new concept has changed the situation substantially.

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- You introduced a mechanism of responsibility, you created an infrastructure and food standards (Catalogue), which earlier had 30 products and now the soldier has a catalogue of 398 food products. Is there someone responsible for what products the soldier gets?

- Exactly. And requirements for food quality are much more detailed.

Quality control is still an issue. Due to strong public interest at the moment, quality control is performed manually at those units using the new food system. But once the reform covers dozens of military units, or even hundreds, nothing will work without a quality control system.  

The system is in the process of being developed by Yuriy Moroz, a wonderful specialist with international experience working for TÜV – the German product certification service. Most important is the philosophy: only a robust quality control system will bring results. At the same time, a rapid response system is also important. The MOD already received a minibus so that the service can immediately respond if there is a problem. The job of this group is to take samples and deliver them to the laboratory within 24-hours (expired samples provide no legal evidence of poor food quality).

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- Can the unit command go to a local laboratory?

- Yes, it can have the MOD service take the samples and give them to an accredited laboratory. The ministry has a laboratory, and last year we got permission to use local civilian laboratories.

Let me say something about the electronic accounting system. The program was developed in 2015 and our wonderful programmer, Pavlo Melnyk, is still working on improving it. The electronic system is installed at every unit that switches to the new food system.

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It allows the unit food manager to make the menu, order food, and keep a record of all the food in his warehouse.

The system allows them to check the balance at any time, which reduces the risk of theft. One of the main risks to the system is theft when there are "internal" cooks.

Military units in the ATO zone have their own cooks on staff. They’re now going through specialized courses, because it’s important for us that not just anyone cooks for our soldiers.

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- What were the results of the military infrastructure project? After the interview with Glen Gran when his contract ended, it seems that everything stopped.

- The military housing project financed by the British Embassy and managed by Glen Grant had a team of 7 people and lasted for a year.

The project developed recommendations on how to reform the system of housing, introduce project management in construction, change the housing management structure in the MOD, introduce automated processes for managing housing queues as well as construction contracts. As far as I know, the contract with the Embassy ended, and I don’t know when the project will be restarted.

By the way, I’ve known Glen since 2015 and he played a leading role in me coming to RPO. He was first an advisor to an American program, then after working in Riga we brought him back to work on the housing project.

Glen’s project began in summer 2016. For several months they studied the process on the ground: it’s not a simple issue.

The number one problem is that the construction management and decision-making systems are 90% manually run. The concept of modern project management is completely absent. The construction of a building is a project, but there is no "project management". There is no one person responsible for a specific building, not the process. Any project is guaranteed to fail with that kind of management.

- So, the system of military construction was based on the same system as food. There was no single centre of responsibility?

- Of course there was – the Main Housing Department, with more than 10,000 employees, most of them military.

When we did the initial research, we were surprised to discover what Soviet military construction meant. This used to be a whole branch of the national economy. There was a vast number of quarries, cement plants, construction associations, reinforced concrete plants, and an enormous staff of builders and handymen.

In the late ‘90s the system collapsed. Military land and assets became a source of wealth for a certain group of people.

By early 2014, much of this "national economy" had sunk into oblivion, and responsibility for what remained belonged to two departments: the Capital Construction Department, which did construction, and the Main Housing Department, which specialized in operation and maintenance (it was like a big ZhEK – housing office - for the ministry).

The general opinion was that the first department functioned so poorly, that in 2015 it was liquidated, and everyone was moved to the Main Housing Department. That resulted in a body that, on the one hand, handles apartment records, owns land on behalf of the MOD, plans and prioritizes housing provision, but, on the other hand, operates existing infrastructure and manages the budget for the purchase and construction of new construction, while also controlling quality.

As a result, the Main Housing Department is now responsible for accounting, planning, financing, as well as construction, operations, and repairs.

But the organization doesn’t have managers with the proper expertise that are responsible for specific construction projects.

- What needs to be done and what isn’t working out?

- Reforming infrastructure management is complex and difficult. It’s a bit simpler to build housing, because by and large you just have to introduce the successful experience of civilian construction. First, one person – the project manager – has to be given full responsibility for making decisions within the limits of approved funding. Right now we don’t have that. Everything is done the old-fashioned way: if something’s not right, go "complain to the top". There is practically no delegation of responsibility or horizontal coordination.  

There are also none of the basic methods of management and decision-making that are used by successful commercial construction companies in Ukraine. Another big problem is the lack of qualified staff who understand both construction and project management and are focused on obtaining a concrete result within a certain time frame and budget. That doesn’t require military people! That was another major issue: nothing military in the Main Housing Department. Building housing is anything but military construction. We are wasting taxpayer money and time training military personnel – officers - at military academies who will go back and build housing instead of defending the country.

Corruption schemes were also "built into" the contracts. We looked at those documents: for example, 30 days prior to the transfer of the object, the customer was allowed to change the terms of the contract or the terms of transfer. Or the ministry could pay the contractor an advance without exhaustive grounds for the payment or refusal of such.

What does that mean? On the one hand, it seems to protect the interest of the MOD, but in reality, it’s a road to abuse by officials and corruption.

No serious constructor would take a contract realizing they had no rights. And, those that did, probably knew they could cut a deal and be paid everything. As a result, housing was built not by those who were better builders, but by those who were better at "cutting a deal". The contractor’s job came down to building normal relations with supervisors.

Glen’s team developed an entirely new system of contracts and new procedures for managing capital construction and contracts for construction of AFU facilities that were based on standard international principles used by commercial structures and adapted to Ukrainian legislation. We gave these documents to the Main Housing Department.

- What about the housing queue?

- All military housing falls into two categories: service housing (which does not become the ownership of the service member: hostels, barracks, etc.) and permanent housing (a housing queue of 42,000 people). Something also had to be done about the latter. Naturally, this causes a lot of corruption and social tension. Apartments were handed out, but people had to pay bribes that reached almost 80% of the value of the apartment.

The team came up with two solutions. The first option is a deposit scheme, where every month a service member accrues a certain amount - a percentage of his salary. After leaving the military, he gets this money from the state and uses it to buy an apartment or for any other purpose.

The second option is a credit scheme very similar to the American system. There is a guaranteed state loan program where after a certain number of years of service, a serviceman goes to the state bank and gets a targeted loan at a low interest rate.

The serviceman pays the loan from his salary, and later part of it is written off. What’s the point? First, nothing is free. We have to learn to be responsible for our own person interests, and not expect that someone will do something for us or give us something. Second, a serviceman can plan where he wants to live after he leaves the military. Third, he can get an apartment where he plans to live, rent it out and pay off the loan before he is released from the Armed Forces. That way, he is the owner of a fully paid off apartment prior to leaving the military.

A whole set of documents were prepared on necessary legislative changes and given to the defence ministry.

- Which of these changes were adopted?

- Let’s say that we’d like there to be more, but the system has begun to absorb the terminology and some of the principles of project management. It’s very important that the pace of introduction of new approaches and practices now slow down. The system of reforming the housing queue is currently under consideration by the MOD.  

- Is there a project to create a single database of MOD real estate and land to solve the problems we discussed?

- SAP software was purchased 12 years ago for record-keeping. In 2015 they launched the "Mayno-Zhytlo" system using that application to keep track of the ministry’s assets. I don’t know how thoroughly it’s being maintained, but the program as such exists.  

- I ask because I see a lot of liquid land belonging to the MOD that is not even being used (for example, the abandoned former missile brigade military town in Bucha, Kyiv oblast). A commercial state partnership to use that resource would have very quickly solved the problem of reducing the queue and given apartments to those most in need – those who the army should hold on to at any price.

- Yes, resources are not being used efficiency. But there are two nuances. First, as far as we know, there is progress in certain regions and projects are being implemented using this exact principle.

If a private investor begins building housing on unused territory belonging to the MOD, he is required to allocate a certain number of apartments to the military.

Before the war this was a common scheme to launder assets. That’s why we have to approach these kinds of projects very carefully. But we have to do them.

There is another way to reduce the waiting list. The state spends hundreds of millions of hryvnias on targeted compensation to those who agree to leave the queue. So the queue is actually moving. You can’t force people to do this because it’s guaranteed by law, which for political reasons, in my opinion, nobody is going to try to change. There will be a storm of populism in response to any attempt to do so in the Verkhovna Rada, especially on the eve of the elections. But compensation is a completely legal and effective way to partially solve this problem.

Another important issue is the automatization of the queue – entering all the information into a single database. All the information is in paper format and scattered throughout the department. There was also a proposal to integrate the "Mayno-Zhytlo" queue system with relevant state registers. That would bring things in order very quickly, because administration of the queue is fraught with a lack of transparency. You can move someone up, stick someone in higher or lower, and nobody would ever be the wiser.

There were even proposals to make the list open and allow those in the queue to receive expanded information using their electronic signature. That could all be done if the project is continued.

It’s important to note that the project had the support of the ministry. Whether it will be continued is more a question to the embassy.


- Tell us about the medical projects.

- The December merger of the two medical bodies of the GS (Central Military Medical Administration) and MOD (Military Medical Department) was a real revolution

Honestly, even many of my colleagues didn’t think it would be possible, because these were two fairly strong structures. Each had its own sphere of responsibility and, in general, independent management.

Nevertheless, why was it important to merge them? Besides the duplication of certain functions, there was a systemic gap between them. Many functions were not clearly defined, and some things nobody wanted to do. It was the same problem with food. Everybody was responsible for their part, but nobody was responsible for the end result. In 2015 and 2016 you would go to someone with a problem and they’d say they’re not responsible. The newly created structure - the Main Medical Military Directorate – is responsible for all military medicine. It is the single centre of responsibility.

Second, under the Cabinet of Ministers there is now a coordinating centre for the medical services of the defence forces and civilian health care system. Why? Because each defence force – border service, national guard, etc. – has its own medical service and they all follow different rules and standards. A coordinating body was created that will synchronize actions and set uniform rules for military and civilians, thus increasing access to quality medicine.

Third, the 205th Tactical Medicine Training Centre was opened in May 2017. The Centre works according to all international rules. This is the first time in our country’s history that our military is being trained using the standards of the American and Canadian armies. Before that they were taught using Soviet standards, or by private volunteer initiatives that weren’t consistent with one another.

All those standards have been introduced into normative documents of the AFU. What’s important here is that foreign instructors first teach our instructors, and they in turn teach all the others.

Representatives of NATO armies are always in the Centre, helping Ukrainians build a new system of training and at the same time learning from our experience. All the graduates of the centre officially become military medics and serve in the combat zone.


- How is sergeant reform moving along?

- The MOD Reforms Office is part of the National Joint Committee on Reform and Technical Assistance – a platform where all our foreign advisors meet and decide where to direct assistance.

The National Joint Committee has a subcommittee on sergeants. Many countries are helping us in this area: the US, UK, Poland, Canada, Lithuania. The functions are split among the countries. In the committee, Lithuania is responsible for sergeants. Advisors are constantly working in Ukraine, because development of the sergeant corps is a key part of the reorganization of the army.

A group of qualified foreign advisors is working with the General Staff, and we also cooperate with this group on all key issues.

Introduction of sergeant reform shows that the General Staff is moving in the right direction. Nobody has ever done a reorganization with the participation of representatives of civil society. This is a major change in mentality.

With the help of foreign partners, the General Staff established the Sergeant Training Centre in Desna, and according to our Lithuanian colleagues, the Centre is a model for NATO countries.

Foreign advisors have noted Ukraine’s progress in developing the sergeant corps and reforming military medicine.

In addition, the procedural part provides for subsequent changes in the power and duties of sergeants in the Ukrainian Armed Forces.

Next, comes our main challenge: sergeants’ salaries.

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Salaries for sergeants didn’t correspond to the sergeant vertical, and there was no compensation for sergeants renting housing. Together with foreign advisors and military personnel, the work of the past year was focused on developing and adopting legislative acts to regulate these issues.

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- Sergeants do not have special status, and this is a key issue.

- This problem was the reason many professional sergeants left the AFU, including ATO veterans.

With great efforts bill 5027 was passed, which will allow servicemen serving under contract to receive compensation for rent. Before, it only applied to officers.

In addition, last year the pay scale was shifted. From now on, the salaries of sergeants and officers overlap, like in NATO countries. The salary changes were to kick in at the start of 2019, but then it was decided that the Cabinet Resolution on military salaries would go into effect on 1 March 2018.

Both of these changes – salaries and rent compensation – were big victories for the AFU.

- What have been the results of procurement reform?

- The agreement made last year with the NATO Support and Procurement Agency was a serious breakthrough in terms of international integration of procurement. This document will allow Ukraine to be unlocked from its current status as an "island" when it comes to procurement.

It’s a large electronic exchange (announcement board) where each country can participate, offer its services, and buy from others. This is how the single space for procurement of goods and services functions in NATO. Being outside the NATO zone we did not have access to these advantages and functioned liked an island - we could only buy domestically.

Now our producers can sell abroad through this system and it’s supporting the Ukrainian producer. And most importantly, we have access to those goods and services and can compare if our costs are adequate or not.

Before, the MOD could not participate in international trade. Now it can thanks to the NATO system. The first systemic purchases are expected to be made this year.


- Are there any results in education reform?

- Yes. A Defence Management School is being established at the National Defence University. It was included in the NATO-Ukraine program for this year.

Provisionally, the main partners will be the UK and NATO Professional Development Programme (PDP).

The concept and course subjects have been developed. The School will teach specializations that don’t currently exist in Ukraine. The program includes project management, strategic subjects and many others.

The program is intended for civilians and military. It is an analogue to similar courses at the UK Defence Academy designed for military and civil servants in the defence sector. It will be taught as an autonomous program at the Chernyakhovsky National Defence University.

- Who will be teaching?

- This is an international initiative and instructors will come from abroad to create joint programs and teach certain courses. In the future, we plan to have well trained Ukrainian instructors.

According to the NATO-Ukraine Programme, the training system is to launch this year. It’ll be interesting to see how that will go.

- That is deep reform of a strategic level! Project management is the Achilles heel of our army.

- And project management is only one of a dozen courses planned for this program.

- You’re rewiring brains! You will end up with a lot of people with a progressive way of thinking.

- Yes. For example, they will understand the most important new modern concepts of military management used in NATO countries, without which it’s very difficult to build a new model army, and which many (most!) officers don’t know, such as: defence capabilities, capability based planning, C4ISR, network-centric military operations, hybrid warfare, lessons learned, mission command, NATO standards of logistics support, principles of democratic civilian control.

Democratic civilian control is a separate story. Unfortunately, our system of military education did not teach a number of necessary concepts and thus people are often not competent in these issues. One of our tasks is to teach the army new and progressive topics on the conceptual level.

Democratic civilian control is one of them. I was invited to give a guest lecture by the NATO Professional Development Programme. I spoke to an audience of about 150 people. I started talking about democratic civilian control and noticed they were looking at me funny. Afterwards, I asked them to raise their hands if they understood the essence of democratic civilian control. One two people did. People don’t know what it means. And that’s a problem, because much of what they complain about is a consequence of the lack of such control.

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Round table discussion in Mariupol of the Concept for Democratic Civilian Control of the AFU

- For the military, the words democratic civilian control is nothing but political chatter and in reality has nothing to do with their work.

- That’s the approach we need to change. That’s why we developed a basic Concept for Strengthening Democratic Control.

Public sentiment about the progress of reforms is negative and there is no understanding of the principles and values of democratic civilian control.

An effective system of civilian control will ensure that the army develops in the direction given by civil society. It includes a civilian ministry, parliamentary and public control. The latter is much more developed in Ukraine than in many countries of the world, while the first two are only starting to develop.

As you know, the public is actively interested in the situation and it is civilians who often expose many problems in military management. Much of the work of our office was initiated by information received from volunteers. We hear a lot of criticism of processes in the army, but the problem is that if there’s no reaction to criticism, then the negative sentiments will only grow. There is still no comprehensive system of bilateral communication between civil society and government. But we do have options how to change the situation, or at least improve it significantly.

The Concept has several mechanisms for strengthening democratic control. First is a platform of "live meetings" between the MOD and GS with civilian activists, journalists and volunteers. At the moment, there is no such unified platform for regular communication.

Separate meetings and interviews don’t give society an opportunity to discuss problems simultaneously and comprehensively and get answers to questions of interest. When representatives of all the interested segments of society meet regularly to get clarification on a situation that has developed, this increases the level of public awareness and allows the problem to be considered from all points of view.

Second, we proposed a new format of access to public information to increase openness and transparency of the AFU.

Third, we propose creating a single centre for complaints and appeals to increase the level of trust and guarantee the protection of personal information of people making complaints, allow for analysis of all complaints to solutions to systemic problems.

Fourth, the Concept for Strengthening Democratic Control changes the way the MOD Public Council would be elected. To ensure transparency, we suggested borrowing the open online voting format used by several other government bodies, where full details on the organization’s representative, reports on the organization’s activities, and motivation letter are given.  

The open voting format will change the way civil society organizations work with the MOD and GS.

And finally, fifth, we proposed introducing the civilian position of "army lawyer" to defend the rights and freedoms of military personnel in the transition period before there is a separate Parliament Commissioner for the Rights and Freedoms of Military Personnel.

Reviewing and responding to complaints, protecting the rights and freedoms of service members are a reaction to the regular negative things, while access to information and communication platforms are a way of communicating public opinion to the ministry in a concentrated format and receiving a response.

We hope that the implementation of the Concept will make the AFU not only more open to society, but also promote further systemic reforms in line with the standards and principles of the world’s leading democracies.

- It’s been a very productive year. The inertia is changing and thanks to the civilian experts and western advisors working with the AFU a system has been built that yields results. You already have programmatic and systemic solutions to show for your efforts.

Yurii Butusov, Censor.NET

Photos and video: MOD Reforms Office 

Источник: https://censor.net.ua/en/r3060442