[kictanet] HP says laptop bid price changed to favour rival Olive

Tue Feb 18 17:36:38 EAT 2014

If this line is true,

"*...The technology firm further says it was invited through a letter dated
December 6, but which was delivered on the morning of negotiations,
allowing them no time to prepare...*."

Then you know HP is being played for sucker, and I think they are....

The only option on the table, prepare themselves for a Judicial Review
(Takes about a year to conclude), PPARB decisions IMO are not based on
substance, and if they are, its of a different kind!

Waithaka Ngigi

On Tue, Feb 18, 2014 at 5:21 PM, S.M. Muraya <murigi.muraya at gmail.com>wrote:

> What did Olive Telcom offer in terms of local assembly/support,
> maintenance and connectivity?
>
>
> http://www.businessdailyafrica.com/HP-says-tender-team-rigged-pricing-of-laptops-for-rival/-/539546/2210772/-/view/printVersion/-/4t0eatz/-/index.html
>
> HP says laptop bid price changed to favour rival Olive
>
> IN SUMMARY
>
>   * HP says Olive Telecommunications had on December 13 quoted a price of
> Sh23.1 billion as its final offer.
>
>   * Computer maker also claims Olive and Haier are associates that should
> not have been allowed to place separate bids.
>
>   * The allegations add to the controversy that has stalked procurement of
> laptops for primary schools.
>
> Senior government officials colluded with executives of an Indian company
> to inflate prices for the controversial laptops tender by as much as Sh1.4
> billion after the final bids were made, it has emerged.
>
> American computer maker Hewlett Packard (HP) says Olive Telecommunications
> -- the Indian company that won the tender to supply the laptops -- had on
> December 13 quoted a price of Sh23.1 billion ($268,899, 669) as its final
> offer.
>
> But Education secretary Jacob Kaimenyi later announced that Olive
> Telecommunications had won the tender to supply the laptops at a price of
> 24.5 billion ($284,814,957) without reference to the alterations.
>
> "It is clear from the foregoing that the procuring entity amended the
> total price quoted by the successful bidder and which was read out at the
> opening of BAFO (Best and Final Offer) and awarded it (Olive) the sum of
> $15,914,288 (Sh1.4 billion) more than it had actually quoted," says HP in
> documents filed Thursday before the Public Procurement Administrative
> Review Board (PPARB).
>
> HP also alleges that Olive and rival bidder Haier, which was among the
> three shortlisted bidders for the supply of 1.3 million laptops, are
> related companies that should never have been allowed to submit competing
> bids meant to lock out rivals.
>
> According to HP, the tender committee should have disqualified Olive and
> Haier Group's applications on grounds that the two companies are related
> and could not place separate bids.
>
> "To the procuring entity's knowledge the said two companies had previously
> entered into a joint venture to form Haier Telkom (India), a company that
> is still active," says HP.
>
> The allegations add to the controversy that has stalked procurement of
> laptops for primary schools.
>
> HP accuses the tender committee of colluding with Olive Communications to
> undermine rival bidders.
>
> The American firm claims that Ministry of Education officials allowed
> Olive to submit an incomplete price list that left room for price
> manipulation and enabled the Indian firm to overtake it [HP] as the lowest
> bidder.
>
> In an application filed through Nairobi law firm Iseme Kamau and Maema
> Advocates, HP says procurement of the laptops has been shrouded in secrecy
> that has irredeemably compromised the award.
>
> HP accuses the tender evaluation committee of disclosing the price quoted
> by the bidders and in effect allowing price comparison and undercutting -- a
> claim that if proved will cast doubt on the entire process.
>
> The American company says it was the lowest bidder when the financial
> offers were opened on December 6, having offered to supply the 1.28 million
> laptops for Sh25 billion compared to Haier Electrical's Sh27.2 billion and
> Olive Communications' Sh27.2 billion.
>
> All prices were subject to further negotiations.
>
> HP claims that the tender committee used every opportunity to release
> confidential information in the bid documents to competing firms it says
> were sister companies used to undercut its offer.
>
> "Release of the said information created the very mischief sought to be
> prevented by Section 44 of the (Public Procurement and disposal) Act," HP
> says, adding that rival bidders used the unit prices to undercut the
> applicant.
>
> Meyrin Branch, who oversees HP's corporate accounts, says in an affidavit
> that only his company's application should have been subjected to further
> evaluation, including price negotiations, and that the tender committee
> should only have engaged rival bidders in the event that the talks
> collapsed.
>
> Instead, the tender committee invited all bidders to price negotiations on
> December 10 at Windsor Golf Club against HP's expectation.
>
> The technology firm further says it was invited through a letter dated
> December 6, but which was delivered on the morning of negotiations,
> allowing them no time to prepare.
>
> Each firm held separate negotiations with the tender committee during
> which they were asked to reveal their BAFO.
>
> "The mode of negotiation adopted made it very possible for information of
> a particular bidder to be disclosed to others with the aim of sabotaging
> certain bidders," says HP.
>
> Ministry of Education officials are alleged to have failed to define the
> scope of negotiations to participating bidders and instead confronted them
> with questions at the meeting.
>
> The tender committee is also accused of refusing to supply HP with the
> minutes of the negotiations or even a summary of what transpired.
>
> The information was needed for purposes of filing the appeal.
>
> HP later learnt on December 13 that following the price negotiations,
> Olive had dislodged it from top position with an offer of Sh23.1 billion, a
> reduction of Sh4.1 billion from its initial offer of Sh27.2 billion.
>
> The American computer maker was then left in the second lowest bidder's
> position with a price of Sh24.8 billion while Haier was last with a final
> offer of Sh25 billion.
>
> "It was therefore surprising when on February 7, 2014... Prof Jacob
> Kaimenyi announced that Olive Telecommunication had been awarded the tender
> at Sh24.6 billion," says HP.
>
> HP also claims that the committee declined to consider its offer to
> provide value-added services to the tune of Sh4.4 billion free of charge.
>
> It says the tender committee should have disqualified Olive and Haier
> Group's application on grounds that the two companies are related and
> should not have placed separate bids.
>
> The details emerged even as the parliamentary committee investigating the
> laptops for schools tender called on the government to suspend signing of
> the contract.
>
> The MPs argued that Olive is a small company that partnered with another
> firm called CMC to tender for the laptop and that it is not an original
> equipment manufacturer (OEM).
>
> The MPs' claims give credence to HP's argument that the committee breached
> one of the requirements that limited bidding to OEMs.
>
> The parliamentary committee has accused Prof Kaimenyi of awarding the
> tender even before the due diligence report on the winning company is
> scrutinised.
>
> MPs are expected to independently investigate the matter and produce a
> report.
>
> Ministry of Education officials are also accused of rejecting HP's bid for
> the supply of projectors on grounds that it is not an OEM for projectors
> even as it accepted Olive's bid for laptops.
>
> "Since the requirement that bidders must be OEMs was specifically set out
> in the tender documents, HP accepted the decision (to reject its bid for
> projectors) and reasonably expected that similar criteria would be used in
> respect of other bidders," HP says.
>
> The government in October re-advertised for the supply of laptops,
> printers and projectors to public schools in fulfilment of Jubilee
> alliance's campaign manifesto.
>
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-- 
*Regards,*

*Wait**haka Ngigi*
Chief Executive Officer | Alliance Technologies | MCK Nairobi Synod Building
T + 254 (0) 20 2333 471 |Office Mobile: +254 786 28 28 28 | M + 254 737 811
000
www.at.co.ke
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