Intrigues behind Sh24bn laptop deal as Indian firm promises to deliver

Boardroom intrigues, suspicions and multiple business interests nearly marred the laptops-for-schools project, a major campaign promise of the Jubilee Alliance.

But the Sh25 billion project that attracted 17 local and international companies could still face challenges after some vendors raised legal issues in the procurement process, following the government’s decision to award the tender to India’s Olive Telecoms Pvt.

And to ensure security guarantees for the project, the government has asked the Indian firm to deposit Sh2.3 billion as specified in the tender document before the contract is signed within the next seven days.

The company is also expected to stick to the delivery timelines and specifications before it receives payment for the laptops.

So intense was the lobbying that some top managers of global IT firms went out of their way to hunt for influential individuals in Kenya to push their case before the tender was advertised.

Late last year during a presidential trip to China, a top manager of one of the interested firms tried in vain to hand over a laptop to government officials, believed to have been designed to fit the projected specifications of those intended for Kenyan primary pupils.

“When we were in China, one businessman from one of the companies that later participated in the tender made his way through to the Presidential pavilion.

He gave a laptop sample which he wanted the President to see.

Unfortunately the President did not show interest in the gadget, but a governor in the delegation took it,” said an MP who witnessed the incident.

Later in Rwanda, top officials of another business organisation tried to use Rwandan authorities to gain access to the Kenyan presidential delegation to market their laptops.

Unlike other tenders, the ministry introduced a new level of price evaluation known as Best and Final Offer, which gave the government the opportunity to further bargain with the vendors after the first tender announced in August last year collapsed, after all companies quoted billions more than the ministry’s budget.

Some of the losing vendors are now questioning the introduction of open price negotiations claiming it may have given undue advantage to their competitors.

But Education secretary Belio Kipsang has defended the process, saying the ministry did everything to ensure a fair process for all the participants and set safeguards to ensure value for money.

Technocrats from the ICT board were also involved in the process, including in the eight-member team that visited Olive Telecom and New Century Optronics in India and China respectively.

Olive Telecom and New Century Optronics had combined forces to put a successful bid for the Kenyan project.

“This was a big process. We told our people that this is the President’s project and therefore it should be thorough and well done,” Dr Kipsang said.

He said his team had dug deep into every complaint and claim raised to ensure nothing hindered the delivery of the 1.2 million laptops expected in schools from next month for Standard One pupils.

Olive’s final offer was Sh24.6 billion, beating opponents Hewlett Packard (HP) at Sh25 billion and Chinese giant refrigerator manufacturers Haier which quoted Sh26 billion.

Previously Haier had written to the ministry raising queries about the pricing. Early last month, HP also wrote to government demanding to be supplied with minutes of the earlier processes.

Agents of the US firm applying for the tender through its European base have enlisted lawyers in what appears to be ground preparation for an appeal, after losing the tender that could have raised their profile and opened up the eastern Africa market.
“Kindly supply us with copies of the specially permitted procurement prices referred to in Article 29 of the tender data sheet and minutes of the proceedings that took place on December 20,” read a letter written by HP seen by the Sunday Nation.

But in a response, the Education Ministry through Mr Kenneth Mwangi, wrote: “Since we have not completed the evaluation of the above tender we are not in a position to respond to the issues you have raised.

This is in accordance with Section 44 of the Public Procurement and Oversight Authority Act.”

Earlier Haier wrote: “During the negotiation held on December 10 it was made clear to all bidders that all free or value additions were to be compiled in an annex and given values.

These values were then to be considered in the total cost of ownership,” read part of letter. “

But Saturday Olive expressed confidence that they are capable of delivering to the standards specified by the government.

The company’s chairman, Mr Arun Khanna, said both Olive Telecom and New Century Optronics are internationally recognised manufacturers.

“The devices we provide to the students and teachers in emerging markets are not only plain hardware but have our integrated technology platform for education,” Mr Khanna said.