2026-08-27
- In 45 percent of the assessed cases involving the procurement of armaments and military equipment, decisions were actually taken by advisory bodies reporting to the Minister of National Defence, whose members are not legally required to declare any private interests as participants in the procurement process.
- When assessing procurements carried out under exceptions (worth EUR 3.4 billion), in 53 percent of cases the staff involved in the procurements did not indicate their participation in a specific procurement in any form in their declarations.
- The aim is for all final decisions to be taken only by authorised bodies, for consultation periods to be reduced to 35 working days, and for 100 percent of those influencing procurement to properly declare their private interests.
With Lithuanian defence funding reaching record highs and contracts worth EUR 8.7 billion having been signed for the procurement of armaments for the period 2023–2025, the National Audit Office emphasises that, as the budget grows, so too must the standards for transparency in procurement. The audit "Acquisitions of Armaments and Military Equipment’ has shown that, in the acquisitions of armaments and military equipment, it is essential to strengthen the prevention of conflicts of interest and to clearly define who makes the final decisions on contracts worth billions.
“In the procurement of armaments and military equipment, the pace of processes must go hand in hand with transparency. When those who actually determine the course of procurement fail to declare their private interests, there is a direct risk of bias. This weakens the system itself. The recommendations we have made are important for ensuring citizens’ trust in the state: it is essential to draw a clear line between advisory and decision-making functions and to introduce a 100-percent declaration of private interests in procurement,” says Auditor General Irena Segalovičienė.
Members of decision-making bodies do not declare any private interests in procurement
According to the audit findings, 45 percent (14 out of 31) of the defence procurement decisions analysed involved advisory bodies reporting to the Minister of National Defence – the Defence Resources Council, the Armaments and Military Equipment Group and the Defence Resources Group. It was found that the Defence Resources Agency (GRA), when carrying out procurements, follows the protocol decisions of the aforementioned bodies in the absence of a legal act adopted by the Minister or his authorised representative.
These advisory bodies have no legal decision-making powers – their sole purpose is to make recommendations and draw conclusions. The practice of basing final procurement decisions solely on their protocol decisions is inconsistent with the principles of public administration: they are actually being granted a decision-making function which they do not possess, while the additional round of consultations significantly prolongs the already critical timeframe for the acquisition of armaments and military equipment.
Furthermore, although members of these advisory bodies have a direct influence on the outcomes of procurement, they do not declare any private interests as participants in the procurement process, as no such obligation is provided for in the legislation applicable to them. This creates risks of bias and a lack of transparency.
Challenges also arise due to the timeframes for coordinating decisions: in as many as 42 percent of the procurement cases analysed, coordination with ministry departments, advisory groups and other institutions took between 30 and 374 days. The incomplete regulation of the functions of entities involved in the procurement process in internal legislation, the actual granting of decision-making powers to advisory groups, and the fragmentation of responsibilities significantly determine the duration of strategically important procurement processes and delay the procurements themselves.
It is essential to strengthen the efficiency of internal control
Gaps in transparency were also identified within the contracting authorities themselves. Between 2023 and 2025, the GRA’s armaments procurement under exemptions accounted for 40 percent of the total value of contracts and amounted to EUR 3.4 billion. Although all GRA staff are required to declare any private interests, an audit of these procurements revealed that in 53 percent of cases, individuals involved in the procedures did not disclose their actual involvement in a specific procurement in any form, while as many as 74 percent of them directly drafted the applications to initiate the procurement. There were also instances where confidentiality undertakings were signed belatedly – after the procedures had already commenced. A similar situation, where staff failed to disclose their involvement, was also recorded in 14 out of the 21 standard public procurement contracts assessed.
When carrying out strategically important, high-value defence procurements and in order to avoid delays in the process, it is essential to ensure efficient control of the contracting authority’s existing internal procedures. All persons influencing the process must declare any potential conflicts of interest – not only those directly carrying out the procurement, but also those preparing, coordinating requirements or taking decisions.
Strengthening internal control is essential when documenting key procurement decisions. Although no significant breaches were identified, 38 percent (8 out of 21) of procurements were found to contain high and medium significance non-conformities. During the preparatory stage, market research is often not carried out or documented (surveys are frequently conducted verbally), which raises doubts as to whether market alternatives were properly assessed, funds were rationally planned and the impartiality of decisions was ensured.
During the contract award and performance stages, there were instances where contracts were performed for some time without the mandatory bank guarantees or letters of guarantee, thereby exposing the contracting authority to unjustified financial risk and failing to ensure the state’s financial protection.
Recommendations: shorter deadlines and 100 percent declaration of private interests
To ensure that the highest standards of transparency are maintained within the national defence system and that procurement is organised more operatively, the National Audit Office has made the following specific recommendations:
- It has been recommended that the Ministry of National Defence clearly distinguish between the competences and responsibilities of advisory bodies and those authorised to take decisions and establish the procedure and timeframes for coordinating decisions. The aim is for all final decisions to be taken solely by the bodies authorised to do so, while shortening the coordination process so that it lasts no longer than 35 working days.
- To increase transparency, avoid conflicts of interest and the risk of bias in decisions taken, the Ministry has also been recommended to define the group of other persons involved in the procurement process or who may influence its outcome, and to establish measures for the prevention and control of conflicts of interest applicable to them in armaments procurement (including procurements carried out under exceptions). It is anticipated that, once these recommendations have been implemented, 100 percent of those involved in procurement and related decision-making will have duly declared their private interests.
- The Defence Resources Agency has been recommended to strengthen procurement controls and ensure that the process complies with the principles and requirements of public procurement. For every procurement of armaments and military equipment, a commitment has been made to carry out and document a market analysis or market consultation, ensuring an assessment of developments in the specific sector or technologies, as well as other alternatives available on the market, potential suppliers and prices. At the same time, priority is given to written supplier enquiries to ensure the traceability and soundness of decision-making.
Part of this audit report is classified in accordance with the Republic of Lithuania Law on State and Official Secrets. The full audit report has been submitted to decision-makers authorised to access this information.