Hacktivists of Ukrainian Cyber Alliance (FalconsFlame , Trinity  and Ruh8  groups) completed another successful operation by hacking into the systems of one of the Russian Ministry of Defense departments. As a result, Ukrainian Cyber Alliance retrieved an array of classified information on the defense procurement of the Russian Federation, including documents containing data on defense contracts signed in 2015-2016. The data obtained during this operation was handed over to InformNapalm volunteer intelligence community for analysis.
This is the second hacking of the computers that belong to the Russian Ministry of Defense (read about the first hack here ). According to the hacktivists, the second hacking attempt became successful thanks to negligence of the same rear-admiral who was reckless in the first case – namely, Rear Admiral Vernigora, Head of the Department.
It is worth reminding that the budget of the Russian Federation provided 2.501 trillion rubles for military funding in 2014. In 2015 the sum went up to 3.078 trillion rubles. In 2016, the planned defense was estimated at 3.145 trillion rubles. In 2015 the Russian Ministry of Defense planned to spend  over a half of the total budget, i.e. about 1.74 trillion rubles, on the purchase of new weapons. Putin voiced the plans to upgrade the Russian army and its aging equipment way back in 2011, when he was the Prime Minister. At that point It was planned to spend 23 trillion rubles by 2020 on the major upgrade.
Obviously, the documents handed over for analysis reveal only a portion of the defense budget in terms of rearmament.
The retrieved data, no doubt, will be of interest to intelligence agencies of foreign countries, including the U.S., NATO member-states, China and Japan, for they reveal the details of Russia’s armamaent strategy. To give you some background, on November 22, Russia announced that it would place coastal missile BAL and Bastion systems on Iturup and Kunashir, the two disputed Kuril islands. Predictably, it raised concern of official Tokyo. It should be noted that this step was deliberately taken by the Russian side on the eve of Putin’s visit to Japan dedicated to peace treaty talks. By the end of the year, Russia is also planning to hold military exercises in the Sea of Japan. Besides that in 2015 Russia started to build a uniform system of coastal defense in its Far East, stretching from the south coast of Primorye near Vladivostok to the Arctic. This shows that maritime power is a top priority for Russian military. Apparently in this case Russia is aiming to ensure control of strait zones of the Kuril Islands and the Bering Strait.
Now in the documents of the Russian Ministry of Defense obtained by Ukrainian hacktivists, we find modernization and repair of war ships among the top ten orders worth billions of rubles.
Russian defense order contracts of 2015-2016 contain very curious expense tems, such as development of a new naval anti-aircraft missile system for destroyer, frigate and corvette class ships, production and supply of Irtysh-Amphora-B-055 sonar systems for Borey-class submarines, partial construction of two 20385-class corvettes and production of Sigma-20385 combat information and control systems for them, construction of minesweeper Georgy Kurbatov (Alexandrit-class, project 12700). It is noteworthy that on June 7, 2016 the newly built ship caught fire causing damage to the inner lining. Possibly we can suspect an arson purported to conceal large-scale embezzlement of budget funds.
Judging by military contracts the issue of supplying Air Force is also one of the top priorities for the Russian military procurement. The documents list expense items related to supply of air-to-air missiles (AAM) and air-to-surface missiles (ASM), the modernization of optical homing for H-29 cruise ASMs, maintenance of Su-24 and Su-34 tactical aircraft, production of an airborne electronic countermeasures (ECM) system widely used by the Russian Air Force in Syria on Su-34 and Su-30SM aircraft (the details of the contract are classified as secret), and other items.
The EU, the U.S. and UK will be interested to learn the details of the contract for the purchase of VRFA0026-BD X-Band low noise amplifiers through Mashpriborintorg state holding. It is known that VRFA0026-BD microcircuits (http://datasheet.viper-rf.com/VRFA0026-BD_API.pdf ) are produced by the British company VIPER RF (http://www.viper-rf.com/about-us ). This contract of the Russian MoD suggests there is a shady procurement scheme that bypasses sanctions imposed on Russia through the ‘buffer’ company which buys dual-use goods, later utilized by Russia for military purposes. Perhaps, this aspect to be taken into consideration during the discussion of tougher sanctions against the Russian Federation.
Another project that may be of interest to the international community is remodeling of railcars, making them capable to carry nuclear and radioactive materials with the aid of SBE60M system. The Russian Strategic Missile Forces generally use B-60M railcars to transport ballistic missile warheads and multiple reentry vehicles. Additionally, a few days ago it became known from open sources that in 2017 the Russian Armed Forces intend to significantly increase railroad transportation turnover to Belarus. Overall in 2017 Russia is planning to send 4162 wagons with military cargo to Belarus – 83 times more than in 2016. Such aggressive militarization of the territory of Belarus by the Russian Federation may posse a threat not only to the northern borders of Ukraine, but also to the Baltic countries.
Based on the documents on the defense procurement InformNapalm has compiled a list of companies that obtained the largest shares of funding from the federal budget during the given period. Analysis of the list clearly demonstrates us the priorities of the Russian Ministry of Defense.
Major industries of the top ten contractors are: aircraft construction, including maintenance and repair of the Russian Air Force aircraft; construction and installation works (in our previous reports we already mentioned  Bamstroyput company); research and development works; modernization and repair of war ships.
Top 100 contractors of Russian Defense Ministry – state defense orders placed in 2015-2016 with the due date in 2015-2020
Top contractors include the suppliers of the missile forces, naval aviation, and electronic warfare forces. However, it should not slip your attention that JSC Uralvagonzavod – the main supplier of main battle tanks (MBTs) to the Russian Army – is missing among the top 100 contractors. We are aware of only one contract  placed in 2015 for overhaul and upgrade of T-72B to T-72B3. Russian media have already been reporting about the crisis and shortage of funding for the tank building. There will be no massive MBT production in the next 1-2 years. “Instead of planned deliveries of 2300 pieces of T-14 Armata tanks until the end of 2019, the Ministry of Defense will be able to purchase only 70 of these combat machines at best “ – said Sergey Ishchenko. 
Among the state contracts with a relatively small cost there are also some interesting items. For instance, a contract on arctic adaptation kits for combat vehicles with the Instrument Design Bureau  that costs about 348 million rubles. This design bureau is known for developing of the Arctic version of surface-to-air missile and gun system (SAMG) Pantsir-S1. The Arctic has long been in the focus of the Russian leadership that sees the region not only as a major source of hydrocarbons, but also as an important power projection base.
Selected Russian state defense orders placed in 2015-2016. Short contract description is given below the table (Note: for specific source entries refer to the line numbers in the table)
1) JSC United Aircraft Corporation will supply the Russian Ministry of Defense with 39 strategic airlifters Il-76MD-90A before 2020. The aircraft is designed to deliver heavy machinery and personnel over distances of up to 5000 km to remote and poorly served areas. Interestingly, the publicly announced amount is twice higher than it is stated in the contract.
2) Khibiny (L-175V) – Soviet / Russian airborne electronic countermeasures (ECM) system. The system is widely used by the Russian Air Force group in Syria on Su-34 and Su-30SM. Contract details are classified.
3) The contract for tactical aircraft maintenance worth 7,742,111,926.47 rubles. The listed aircraft types are Su-24 and Su-34, the ones actively used for airstrikes in Syria.
5) Presumably, this contract item worth more than 1.7 billion rubles is the development of Redut-70M, the new naval surface-to-air missile system designed for the destroyer, frigate and corvette class ships.
6) The contract for the supply of air-to-air / air-to-surface missiles, worth over 1.6 billion rubles.
7) Irtysh-Amphora-B-055 is an integrated automated digital sonar system for project 955 Borey-class submarines (955 project). Russian sources claim that it is superior to the sonar equipment of the American Virginia class submarines. Also, it was planned to equip the sonar surveillance and reconnaissance submarines with this system. According to the contract, the production of such systems will cost 1.6 billion rubles to Russian taxpayers.
8) This contract worth over 1.3 billion rubles is to produce instruments, components and spare parts for OM 14F145. The code 14F145 refers to Lotus-C1, Russian signals intelligence (SIGINT) satellite, a component of the new-generation Liana satellite SIGINT network.
9) This contract is placed to complete AFAR-E project which, in its turn, is a part of a larger research and development project. This code refers to the design of an active phased array antenna for the E-band radar (71-76 GHz and 81-86 GHz), over 736 million rubles.
10) Partial payment for the construction of two 20385–class corvettes (upgrade of Steregushchiy-class corvette) with serial numbers 1005 Gremyashchiy and 1006 Provorniy, 600 million rubles.
12) Correction of the design documentation for 20380-class corvette, serial number 1007 Retiviy, will cost the taxpayers over 569 million rubles.
13) Serial installation of Arbalet-DM automated remote-controlled machine-gun stations (RCWS) on the Tigr-M infantry fighting vehicles (IFV), worth over 568 million rubles. These IFVs were heavily used during the invasion of Crimea and were also spotted in Donbas.
16) Sigma-20385 is the combat information and control system for Steregushchiy corvettes (project 20385-class), the project costs almost 448 million rubles.
17) This contract is to perform research and development work on Trassa-11711 project. The code refers to the second large landing platform/dock (LPD) of 11711 Petr Morgunov project. The reason for this R&D spending of 400 million rubles is unclear, taking into account the decision to design larger landing platforms of new generation. Earlier it was planned to put afloat about six such ships. On the photo below is Ivan Gren LPD (project 17111). Ships of this class were massively used to deliver military cargo to Syria.
19) Automated airborne jammer control station coded 1L266 for Moscow-1 EW system. The contract is placed for the supply of 9 control stations. The contract is worth 381.5 million rubles.
22) Large catadioptric lens Sova-O-75 for opto-electronic tracking systems will cost Russian taxpayers 328 million rubles.
23) Construction of Georgy Kurbatov minesweeper (project 12700 Alexandrite), worth 289 million rubles.
27) FUR-137L is a photodetecor for PKhRDD-2 remote chemical reconnaissance devices that are designed to detect toxic chemical vapors and their mixtures in the ground air in the field environment; identify the concentration and composition of the substances, locate and record the time of detection; transmit the results through the data link. Russia is either expecting to be attacked with chemical weapons or is intending to use them. Otherwise, spending of over 225 million rubles does not look justified at the time of budget crisis.
28) BTR-MDM Rakushka-M is an upgraded version of APC based on airborne infantry fighting vehicles BMD-4M, worth 205 million rubles.
29) Almost 200 million rubles have been paid by the taxpayer for another stage of research and development of the fifth-generation stealth fighter PAK FA T-50 project.
30) The project of fitting rail cars with SBE60M system to transport nuclear and radioactive materials. The Russian Strategic Missile Forces use B-60M rail cars for discreet transportation of ballistic missile warheads and reentry vehicles. The project is worth 180 million rubles.
34) This contract indicates the supply of Granite 7T-M2 item (as it turns out, it is a modern objective lens for Kh-29 air-to-ground cruise missile target seekers). This is a cutting-edge missile guidance system with no open source reference. Internet sources mention only its predecessor, Granit 7T-M1 electro-optical seeker. The project is worth 161 million rubles.
50) Production of wheeled recovery vehicle REM-KL on Ural-532362-1042 chassis, estimated at 47 million rubles.
51) Production of safety and arming mechanisms for the anti-tank guided missiles (ATGM) for infantry machines, MBT’s, self-propelled artillery and aircraft armament, over 45 m rubles.
56) Production of S-135M1 antenna rotators for 9S18M1 target acquisition radar station, part of Buk-M1 SAM system. A launcher of this family was used to shoot down MH-17.
62) UVI-73 pulsed traveling wave tubes.
65) Refitting of the Navy Commander-in-chief cabin (flagship cabin #19) on Aurora 1st rank cruiser of the Baltic Fleet. The refitting of the cabin on this museum relic costs mere 10 million rubles.
67) Contract for the purchase of microcircuits for VRFA0026-BD X-Band low noise amplifiers from the British Viper RF company through Mashpiborintorg state holding, 8.3 million rubles.
72) Infrared pyrotechnic cartridge decoys PPI-26-2-1M are designed to protect airplanes and helicopters from infrared guided missiles. Used in airborne chaff/flare dispensers such as ASO-2I, ASO-2V, UV-26, UV-3.
74) Contract for the supply of 14TS822 (Grot-M) military GLONASS / GPS navigators.
Сontracts for experimental development as well as research and development classified as top secret which were signed in 2016. The table lists executives in charge and their passport data
In connection with the military aggression in Eastern Ukraine and Russian occupation of Crimea, a number of countries imposed sanctions on selected Russian individuals and companies. Russian military industrial companies were also included into the sanctions lists of Ukraine, USA and Canada. Among the sanctioned companies  there are some that also appear on our list of contractors who obtained multi-billion government funding: United Engine Corporation; Rostec Corporation subsidiaries – JSC KRET (Concern Radio-Electronic Technologies), Instrument Design Bureau, Russian Helicopters; JSC MIC Mashinostroyenia; PJSC United Aircraft Corporation.
The analysis of received information leads to the following conclusions:
– Current procurement pattern of the Russian Ministry of Defense demonstrates Russia’s urge for more aggressive presence at sea and in the air, the priority is given to navy, air force and electronic warfare and intelligence.
– Significant funds are allocated to the means of increasing military and political pressure on neighboring countries and blocks (mobility of strategic nuclear weapons, sea component of the nuclear triad).
– Special attention is paid to improving the efficiency and adaptability of conventional weapons through the use of battle management systems and support for ground troops. In all likelihood there are not enough funds for a large-scale rearmament of ground forces, so the priority is given to improving the efficiency of existing combat platforms with utilization of more advanced associated technology (command and control and electronic warfare systems, more up-to-date and accurate tactical and guided missiles, weapon stations).
The Russian Federation has challenged the international law, violated international agreements on security and good neighborly relations. Putin’s Russia has unleashed aggressive wars, annexed Ukrainian Crimea, and engaged in export of terrorism on an unprecedented scale. Therefore, response measures in order to defend national interests are needed to be developed not only by Ukraine, but also by other countries – from Japan to the Baltic states. The analysis of these materials on Russian military contracts should complement the sanctions list with a number of Russian military industrial companies.
P.S. In conclusion we would like to show our readers an insightful presentation “Unified combat command and control system at the tactical level” made by Russian JSC Concern Sozvezdie. You can download the full presentation here . Below you can find selected screenshots from this presentation. Data that we obtained from Ukrainian Cyber Alliance contains a lot of similar materials.
The data was exclusively given to InformNapalm by the hacktivists of the Ukrainian Cyber Alliance for analysis and processing. InformNapalm Community bears no responsibility for the sources and origin of the data.
The information above must be of considerable interest to intelligence agencies of different countries around the world. When we were working on this publication colleagues from China expressed their special interest, to obtain this information, so we are planning to translate this publication and other documents retrieved by the hacktivists into English, Chinese, Japanese and other languages. We call on the readers of InformNapalm to consider joining our team and help with the translation of this and other information into different languages.
This publication was prepared by Victory Krm  and Mikhail Kuznetsov  specially for InformNapalm  website. An active link to the authors and our project is obligatory for any reprint or further use of the material.
Translated by Artem Velichko
Edited by Christina Dobrovolska