Israel’s Defense Ministry spending NIS 30b on local procurement

Since the start of the war in October, the Israeli Ministry of Defense has spent NIS 30 billion, including value-added tax, on domestic purchases, according to information from the Defense Ministry’s Production and Procurement Department, seen by Globes. More than half of this amount was spent on defense equipment, ammunition and weapons. This large-scale spending was made on the instructions of the Director General of the Ministry of Defense, General (Res.) Eyal Zamir, to focus as much of the purchases as possible on Israeli-made items. This amount represents a full year’s normal purchases by DOPP.

The data reflects the significant consequences of the recruitment of approximately 300,000 reserve soldiers, and as a result, 28.7% of Israeli purchases during the war (8.61 billion shekels) were allocated to “miscellaneous” items. A wide range of products including for example clothing, tents, accommodation equipment, chemicals and other services are on the market.

This was the second largest category after purchases of defense equipment, ammunition and weapons, which amounted to NIS 16.4 billion. The lion’s share of this amount went to Elbit Systems, Israel Aerospace Industries and Rafael. However, it is very likely that subcontractors of the Big Three also benefited from the procurement.

One of the important issues that the Department of Defense was asked to address was the restoration of capabilities that had not been acquired for many years. As part of the rapid conclusions reached, it was realized that there was an urgent need for a large quantity and independence in the field of land weapons – four times the volume of domestic production before the outbreak of war. Investments were made, modernization, automation and expansion of production lines were implemented.

Interesting purchases made by the IDF include NIS 100 million for drones and NIS 920 million for computer equipment. During the same period, the US procurement delegation spent more than $6 billion. The value of the annual US military aid package amounts to $3.3 billion, in addition to $500 million annually for joint developments in the field of air defense and various aid packages that were approved during the war.

Published by Globes, Israel Business News – en.globes.co.il – on June 26, 2024.

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