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

Tue Feb 18 18:45:25 EAT 2014

This has been debated before.

We all know the best way to go is setting a local manufacturing plant. And
this is what KICTANET and the taxpayers should be advocating for. Each
year, the taxpayer will be forking $268,899, 669 for standard 1 pupils.
That is not sustainable. In 10 years, $2.7 trillion will have been spent on
cheap plastics that we can develop locally and empower our youth, and keep
local dollar local.

The government should get more sensible on this.

______________________
Mwendwa Kivuva, Nairobi, Kenya.
twitter.com/lordmwesh
google ID | Skype ID: lordmwesh

On 18 February 2014 07:00, Adam Nelson <adam at varud.com> wrote:

> We're ignoring the elephant in the room.  Both vendor's laptops are going
> to be garbage.
>
> With that kind of budget, tablets are the only way to go.   Anyway,
> tablets are so much more sensible from a pedagogical point of view as well
> as a battery life (10 hours vs 1) and durability standpoint (you can drop a
> tablet on a cement floor from 2 feet and the screen might crack but it can
> be taped up and works fine).
>
> Even Apple iPads are only $300 retail nowadays and surely the government
> could get them for $200 or even $150 since Apple's CSR team would be all
> over themselves to make the sale.  No ICT support would be required and
> everything would 'just work' as long as the theft and breakage rate is kept
> reasonable.
>
> If anybody in the government could do anything innovative with this thing,
> it would catapult their career to the national and international stage.
>
> --
> Kili - Cloud for Africa: kili.io
> Musings: twitter.com/varud <https://twitter.com/varud>
> More Musings: varud.com
> About Adam: www.linkedin.com/in/adamcnelson
>
>
> On Tue, Feb 18, 2014 at 5:36 PM, Ngigi Waithaka <ngigi at at.co.ke> wrote:
>
>> 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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>>
>>
>> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
>> for people and institutions interested and involved in ICT policy and
>> regulation. The network aims to act as a catalyst for reform in the ICT
>> sector in support of the national aim of ICT enabled growth and development.
>>
>> KICTANetiquette : Adhere to the same standards of acceptable behaviors
>> online that you follow in real life: respect people's times and bandwidth,
>> share knowledge, don't flame or abuse or personalize, respect privacy, do
>> not spam, do not market your wares or qualifications.
>>
>
>
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> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
> for people and institutions interested and involved in ICT policy and
> regulation. The network aims to act as a catalyst for reform in the ICT
> sector in support of the national aim of ICT enabled growth and development.
>
> KICTANetiquette : Adhere to the same standards of acceptable behaviors
> online that you follow in real life: respect people's times and bandwidth,
> share knowledge, don't flame or abuse or personalize, respect privacy, do
> not spam, do not market your wares or qualifications.
>
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