Bid for computers tender moves to court this week

By AUGUSTINE ODUOR

Kenya: The battle for the Sh24.6 billion laptops tender moves to court this week, as Olive Telecommunications Pvt Limited vowed to appeal the verdict of the Public Procurement Administrative Review Board.

The Standard On Sunday has established that Olive was awarded the tender by the Ministry of Education to supply 1.2 million laptops and has lined up top city lawyers – Ahmednasir Abdulahi and Mohammed Nyaoga – to challenge the cancellation of the award.

This move will further complicate implementation of the Jubilee government’s pet project that seeks to integrate Information and Communication Technology in over 20,000 primary schools across the country.

The laptops project has already faced major obstacles of two tender cancelations that have delayed the implementation of the programme that was projected to be rolled out by start of school term this year.

At the centre of the complaint by Olive will be why the review board decision was read by an interim chair yet reports indicated the government had appointed a Paul Gicheru, the substantive chair two days earlier.

Also being contested is the claim that the firm does not have the required financial capability to deliver the machines and also that it did not tender as a consortium. Further in the list of queries being raised by Olive is why they were locked out of the process yet senior ministry officials and technocrats conducted the procurement exercise.

“We are openly challenging the decision of the review board. How can efforts of a competent team that worked for three months be rubbished by a few people sitting for two days,” said Arun Khanna, Olive chairman, adding that the ruling has painted them as ‘box movers.’

The review board Tuesday locked out the Indian firm from further participating in the tendering process, only clearing Chines firm, Haier Electricals Appliances Corporation Limited and Hewlett-Packard Limited from Europe (HP).

It has also emerged that the verdict by the review board may have effectively awarded HP the lucrative deal as the law only requires the procurement entity to conduct due diligence on one firm.

The review board instructed the Ministry of Education to start the process afresh from the best and final offer and noted that the entire exercise should last 45 days.

Documents seen by The Standard on Sunday show that the two firms – HP and Haier-underwent a competitive negotiation.

Haier quoted Sh25.1 billion as HP quoted Sh25 billion. The two firms, however, outdid each other in their ‘value addition’ offers.

Education Cabinet Secretary Jacob Kaimenyi said the ministry would abide by the verdict of the board.

“We shall start all over again from the Bafo stage and go ahead to conduct due diligence,” he said.

The review board ruled Tuesday last week that Olive did not have the financial capability to supply the 1.2-milion laptops. The board said the annual turn over of the firm between 2010 and 2012 was between Sh6 million and 768 million, adding that this translated to an annual turnover of Sh1.1 billion, way below the required Sh8 billion.

Khanna yesterday said Olive was ready to deliver the first batch of 400,000 computers by April. “We have also been working on plans to set up a local assembly plant for smart phones, laptops and tablets,” he said.

The board ruled that the Indian firm did not bid as a consortium as they claimed. In addition to this, the review board also said that the firm was not an Original Equipment Manufacturer (OEM) and noted that it was not qualified to bid, as that was only pen to OEMs. In a paid-up full page advertisement in the local dailies, Olive explained last week that their combined financial strength was ‘way above the threshold’ stipulated in the tender document.

The firm goes on to say that the tender required proof of financial resources with a minimum of Sh3 billion.

The firm also clarified that it was the ‘lead bidder’ in the consortium as the tender provided that they could bid individually or as a consortium.

“It is absurd for the review board to create new terms of reference outside of what was clearly stipulated in the tender in the pretext of administrative review,” said Olive in a statement.