2026-06-17
The National Audit Office conducted an audit assigned by the Seimas titled “Funds Allocated to the National Defence System for the Procurement of Goods, Services, and Works for 2021–2025”. The results show that the national defence procurement system operates effectively, but growing needs highlight its weaknesses - fragmentation, lack of expertise, and limited monitoring of processes and results. As defence funding increases, it is essential to strengthen procurement planning, performance evaluation, internal control, the capacity of specialists, and risk monitoring.
Between 2021 and 2025, goods and services worth EUR 7.2 billion were purchased for the national defence system. For a detailed assessment, the auditors selected and evaluated 36 higher-risk procurement contracts (out of 111,000 procurement contracts carried out by national defence system contracting authorities between 2021 and 2025) and the activities of 12 national defence system contracting authorities. It is important to note that the procurement of arms and military equipment was not assessed during this audit—the National Audit Office is conducting a separate audit on “Procurement of Arms and Military Equipment,” which will be completed shortly.
“The national defence procurement system currently operates in an extremely dynamic environment, where it is important to balance the operational responsiveness required to meet national security needs with the efficient use of public funds. The audit revealed that growing investments in defence require stronger planning, data-driven monitoring, and more consistent controls. The biggest challenge today is to strike the right balance between the flexibility and efficiency of financial and procurement management control systems through clear priorities, data, and accountability,” emphasises Auditor General Irena Segalovičienė.
The procurement model used by the national defence system must ensure expediency and efficiency
The simplified procedures and decentralised procurement model provided for in legislation within the national defence system offer greater flexibility and allow for a more rapid response to changing needs. By the end of 2025, 73 contracting authorities were conducting procurement within the national defence system, and an average of approximately 22,000 decentralised procurements were carried out each year. This model provides greater flexibility and speed in supplying the armed forces and other institutions within the system with the necessary goods, services, and works.
However, the audit results show that there is insufficient data or basis to conclude that the current model is optimal for the entire national defence system. Its cost-effectiveness has not been assessed, procurement monitoring is fragmented, and there are insufficient control safeguards in cases where exceptions to procurement rules are applied. The shortage of procurement specialists poses an additional risk. At the end of the year, the organisations assessed were short one-fifth (19 percent) of these specialists. This may affect the quality of procurement planning, organisation, and control, as well as the timely execution of procurements.
Therefore, the National Audit Office recommended assessing the efficiency of the current procurement model, strengthening procurement monitoring, ensuring sufficient capacity among procurement specialists, and establishing clearer control safeguards for procurements subject to exceptions.
An assessment of the highest-risk procurements revealed a need to strengthen internal control
The audit assessed how contracting authorities within the national defence system conduct public procurement. To this end, 36 procurement contracts and 12 of the 73 contracting authorities were selected. The procurement contracts with the highest risk were selected for the assessment; therefore, the audit results do not reflect the entirety of public procurement within the national defence system and cannot be directly applied to all procurement contracts.
Under special exemptions, where the requirements of the Law on Public Procurement do not apply, 14 procurements were carried out within the national defence system, with a total value of EUR 950 million. Internal regulations did not establish minimum mandatory procedural requirements for these procurements. Unit heads decide for themselves which procurement procedures to apply, which increases the risk of a lack of transparency and the irrational use of funds.
Procurers conducting procurements through negotiated procedure without prior publication are not required to contact direct service providers, manufacturers of goods, or their official representatives (there is a risk that the procuring entity will fail to evaluate the potentially lowest bids and will purchase the goods or services at a higher price). We recommended establishing an obligation to also contact manufacturers of goods or their official representatives directly when conducting procurements through negotiated procedure.
47 percent (17 out of 36) of the highest-risk procurements assessed during the audit revealed moderate or significant non-compliance, highlighting the areas of highest risk where controls need to be strengthened. Most of the shortcomings were identified during the initial stage of preparation and initiation of procurement (risks related to restrictions on competition and inaccurate technical specifications).
It was found that the list of centralised procurements for the national defence system is compiled and amended without clear criteria, i.e., the rationale for compiling and amending the list is not ensured. 83 percent (10 out of 12) of the contracting authorities selected for assessment during the audit saw their procurement plans increase by more than 15 percent in terms of both number and value over the course of the year, and the plans are amended on average as many as 14 times per year. The fact that significant procurement groups, in terms of the number and value of procurements, were not planned at the beginning of the year indicates insufficient identification of procurement needs, hinders targeted procurement management, and increases the risk of procurement delays and insufficient competition in procurements. The National Audit Office notes that it is necessary to introduce a unified procurement data management system and strengthen controls over changes to the procurement plan.
The identified discrepancies indicate that it is necessary to strengthen procurement planning, the internal control system, risk management, and procurement oversight so that growing investments in national defence are used as efficiently as possible.
Rising procurement volumes highlight the importance of preventive controls
The audit showed that the functions and responsibilities of the institutions responsible for the supervision and control of procurement in the national defence system have been defined and provide a basis for carrying out procurement oversight. However, as the volume and complexity of procurement increase, it is necessary to strengthen preventive controls and make better use of available data to identify potential risks.
The assessments and inspections conducted by the Public Procurement Service within the national defence system accounted for only about 2 percent of all assessments and inspections it carried out. Most of the inspections and assessments conducted by the Public Procurement Service revealed non-compliance with legislation (97 percent of inspections and 61 percent of assessments), which indicates risks in the organisation and implementation of procurement within the national defence system, as well as insufficient preventive measures. Given the significant increase in funding for the national defence system, it is important to strengthen the oversight of procurement within the national defence system and provide methodological support at the national level.
The National Audit Office recommended strengthening the oversight of high-risk procurements, making better use of available data, and ensuring a more consistent application of control measures throughout the national defence system.
The procurement system must remain balanced - prompt, transparent, and efficient
The national defence procurement system should be developed in such a way that it can quickly adapt to a changing security environment, ensure prompt decision-making, and provide reliable control over processes.
To ensure that growing investments in defence are managed not only promptly but also as efficiently as possible, the National Audit Office recommended that the Ministry of National Defence define the procurement organisation model more clearly, evaluate its efficiency based on data, strengthen the capacity of procurement specialists, improve procurement planning, and ensure more consistent preventive control.