Drone manufacturers will receive advance payments of up to 70%: The Ministry of Defense is launching new DOT-Chain Defense rules
The Ukrainian Ministry of Defense is introducing an advance payment mechanism for drone manufacturers as part of the DOT-Chain Defense system to accelerate the production and delivery of drones to the front lines.
This was reported by the Ministry of Defense’s press service.
From now on, companies that consistently and quickly fulfill orders will be able to receive a portion of the funds in advance. Previously, the model provided for payment only after the actual delivery of products.
The new approach is intended to provide manufacturers with working capital, which will allow them to scale up production, especially given the growing demand from combat units.
As explained by Arsen Zhumadilov, Director of the Defense Procurement Agency (DPA), the amount of the advance payment will depend on the speed of contract fulfillment: the faster the delivery, the larger the advance payment. According to him, some manufacturers are constrained not by technology but by finances, so the new mechanism is intended to encourage faster order fulfillment.
Companies that have been operating within the system for at least three months and have no outstanding debts to the agency will be eligible for advance payments.
The amount of the advance payment will be determined based on the results of the previous three months:
— up to 70% of the order amount—if the average fulfillment time is up to 30 days;
— up to 30%—if the fulfillment time is longer.
Advances are provided for a term of up to 60 days. In case of failure to meet the conditions, funds must be returned, and a fee will be charged for their use in the event of a delay.
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