Darya Kuzmina, analyst at StateWatch
The third year of the great war. The billion-dollar military footwear market finds itself dominated by a single player – the Talan combat boots manufacturer. How did this happen? StateWatch has analysed the requirements and technical specifications used by the Ministry of Defence of Ukraine to hold tenders for the boots procurement. The conclusions are disappointing: the technical specifications, which are supposed to be a guarantee of reliable supplies, actually block the participation of other footwear manufacturers in MoD procurement.
According to the information available in the public domain, only one manufacturer supplies summer, winter high ankle boots and special boots to the army. The technical specifications for these shoes are developed by the Central Department of Development and Support of Material Supply of the Armed Forces of Ukraine (CDDS MS AFU) and for some reason include drawings of boots with the Talan logo.
The technical specification is an important document in the tender procedure, as it defines the criteria by which the customer assesses whether the potential supplier’s products meet their needs. Therefore, such a small detail as a logo can ultimately stop other manufacturers from participating in public procurement of army footwear.
What kind of company is this?
Since at least 2015, the Talan group of companies has been supplying boots to the Ministry of Defence. The most famous companies of the group are Talanlegprom LLC and Talanprom LLC. The Talan Group is owned by the family of Mykola Lavryk, a former governor of Sumy region and MP of the 8th convocation from the Petro Poroshenko Bloc. The beneficiaries of the group’s companies are also the ex-official’s ex-wife Valentyna Lavryk, son Andrii Lavryk, daughter Oksana Lavryk and current wife Iryna Pokas.
From 2011 to 2017 Talanlegprom has been systematically accused of violating delivery deadlines set by the Ministry of Defence and the Ministry of Internal Affairs of Ukraine. In 2017, the Odesa Regional Territorial Office of the Anti-monopoly Committee found that Talanlegprom LLC and TH Ukrlegsyrovyna LLC had committed anticompetitive concerted actions, as both companies belong to the family of Mykola Lavryk. In other words, Talanlegprom LLC was granted the right to enter into contracts with state-owned enterprises in the absence of competition. Since 2017, Talanlegprom has been included in the blacklist of companies banned from participating in tenders, but the company continued to receive millions of dollars in contracts. As reported by “Nashi Hroshi”, from 2017 to August 2021, Talanlegprom received orders from the Ministry of Defence worth UAH 1.21 billion, and its subsidiary Talanprom received orders worth UAH 1.32 billion. In response to StateWatch’s request, Talanlegprom LLC reported that from 2017 to 2021, it participated in tender purchases only during periods before the AMCU’s decision was issued, which was later invalidated and cancelled, and after the restrictive measures expiration. The company also paid the required fine and was barred from participating in tender procurement until June 29, 2020.
According to publicly available data, in 2023, the MoD’s Resource Support Department signed contracts and additional agreements with Talanlegprom LLC totalling over UAH 307 million, and another UAH 1.3 billion in 2024. It should be clarified here that some of the MoD’s tenders are currently closed due to martial law, so only information available on online trading platforms is used.
Technical requirements for Talan
The lack of competition for Talan was ensured by the 2015 technical specification for the purchase of boots, according to which the moulding of the soles of the boots is identical to the pattern on the soles of Talan boots. In 2016, Lviv businessman Oleksandr Bozhahora filed a complaint with the AMCU against the MoD’s discriminatory requirements. Apparently, the officials ignored this appeal, because, as of today, the MoD specifications still contain drawings depicting boots with the Talan logo (Figure).
Figure. Figures depicting the Talan logo on the sole, in particular Figure 2 – ‘Approximate appearance of the running layer of the sole of the object’ (‘High ankle winter boots TC A01HJ.14755-362 :2022 (01)’ and summer boots TC A01XJ.45279-267:2020 (01)), Figure 6.1 – ‘Indicative image of ‘honeycomb’ placement” (‘Summer boots TC A01XJ.45279-267:2020 (01)’), Figure D.1.1 “Appearance of boots” (‘Special boots TC A01XJ.01090-286:2020 (01)’).
Does the presence of a particular company’s logo on technical specification drawings discriminate against other participants? This is how it is explained by a lawyer in the field of international arbitration, Oleksandr Volkov, a defence procurement specialist and the former director of the State Procurement and Material Supply Department of the Ministry of Defence of Ukraine, who approved the technical specification for the boots in 2015, Nelly Stelmakh, and the former head of the MOD’s Center for Defence Procurement, Tetyana Koba.
‘In this case, the term ‘indicative’ may have a different interpretation, which includes a subjective evaluation factor. In such circumstances, the application of this requirement in practice may have signs of discrimination. Therefore, the inclusion of such a criterion may not be considered discrimination in itself, but everything will depend on the specific interpretation of this criterion during the admission of participants to procurement and the execution of procurement,’ Volkov said.
Nelly Stelmakh notes: ‘It would be right for the developers of the specifications to provide additional indicative drawings of the sole. I personally wear Talan in the Armed Forces. I have no issues with the quality, but as a procurer, I don’t like the lack of competition.’
‘The technical specification is an integral part of the tender package of documents. According to the Law of Ukraine ‘On Public Procurement’, technical specifications should not contain references to a specific brand or manufacturer. If such a reference is necessary, it must be justified and contain the expression ‘or equivalent’. However, on July 17, 2020, the Law of Ukraine ‘On Defence Procurement’ was adopted. In fact, since that time, the State operator of the rear (the agency that provides the rear needs of the Armed Forces – note) is a hostage of circumstances, because now the DOT cannot specify ‘or equivalent’ in the requirements. There is already an approved MOD technical documentation that SOR should use in procurement. What to do with it? Ukraine plans to join NATO. So there is only one way out: bringing the technical specifications to NATO standards,’ comments Tatyana Koba.
In its response, Talanlegprom LLC noted that their sole pattern was specifically developed by an Italian company to meet the needs of the Armed Forces of Ukraine. The quality and effectiveness of the sole are confirmed by both European and Ukrainian laboratories, which is why these designs were included in the Ministry of Defence’s technical specifications. The company has granted other manufacturers the necessary permissions to use this design in producing footwear for the Defence Forces of Ukraine. Indeed in September 2023, Talanlegprom LLC sent an information letter to the Ministry of Defence stating that it ‘has no objection to the replication, manufacture and copying of the sole tread pattern by other manufacturers as part of the supply of footwear for the Defence Forces of Ukraine’.
Oleksandr Volkov notes that such a letter cannot be interpreted unambiguously. The response does not specify who exactly has the right to produce footwear with a copied sole tread pattern.
StateWatch sent a request to the CDDS MS AFU asking why the technical specifications for the purchase of boots contained the logo of a particular company. In response, the department said that there were no references to Talan logos. However, they also added that if the upper part of the shoe matches the reference shoe but has a different sole, the shoe must undergo pilot testing. Positive feedback on the test results will allow the sample to be added to the existing standard. Such tests should be conducted in accordance with the requirements of the military standard BCT 01.301.002-2009 (01) ‘Organisation and Conduct of Military (Research) Tests of Items of Military Property. Basic Provisions’ (as amended). When asked what prevents the aforementioned technical specifications from being brought into line with other MoD specifications that do not contain logos of specific companies, the Central Department again replied that there are no references to logos in the drawings of the reference samples.
StateWatch also sent a request to the Anti-monopoly Committee of Ukraine asking whether they consider the presence of a specific company’s logo in the technical specifications to be a requirement that causes anti-competitive actions. However, the AMCU sent only a response without answering the specific question (provide a copy of the response for it to be published).
Criminal proceedings and trade with Russia
Talan Group companies have been involved in a number of criminal proceedings. For example, according to the Police Department of the Main Department of the National Police in Kyiv, officials of the Central Base of the State Border Guard Service and the State Procurement Department of the Ministry of Defence abused their authority and helped Talanprom win the procurement of low-quality goods at an inflated cost from 2018 to 2021, with contracts worth more than UAH 60 million.
The text of the ruling also shows that between 01.01.2022 and 28.11.2022, Talanprom carried out 242 customs clearances of imports of goods totalling 145 tonnes with an invoice value of UAH 16.5 million, in which the trading country was identified as the russian federation.
According to the Russian import data, from 2014 to 2022, Talanlegprom LLC and Talanprom LLC supplied products to Russia for a total of USD 36.6 million. The main Russian importer is Spetsobuvtrade LLC, a footwear manufacturing company owned by Andrii Lavryk that has been in liquidation since January 2024. At the same time, Andrii Lavryk was the founder of another company in Russia that sold footwear, A Hill LLC, which has been in liquidation since December 2023. Talan still has an official representative, Spetsobuvtorg, in Kazakhstan, which continues to operate.
When one company dominates the market, the quality of products may decline due to lack of competition. Therefore, relying on a single supplier of footwear for the military is particularly dangerous during a full-scale war. The military needs reliable footwear that can withstand extreme conditions, and any decline in quality can have serious consequences for their safety and effectiveness. A potential monopoly allows the manufacturer to impose inflated prices, which leads to overpayments by the state and creates conditions for corruption schemes. In addition, if the market is dominated by a single supplier, any production, logistical or financial problems with that company could lead to delays or termination of the supply of footwear to the military.
