We must change our way of dealing with grand procurement contracts

What you need to know:

  • I keep wondering how a company with such a small balance sheet managed to pass all those tender evaluation stages.
  • We have not forgotten how the Independent Electoral and Boundaries Commission bungled the procurement of the Biometric Voter Register in 2013.

I have just read the full ruling of the Procurement Appeals Board on the laptop project and my conclusions are the following:

First, it is evident that the reasoning by the board is exemplary in its conciseness and lucidity. The ruling displays rare capacity to go for the jugular of every contentious issue surrounding the saga.

It is written to enable even the most ICT-illiterate person to understand the issues.

The laptop saga is a monumental scandal. I hope that some of the top dogs at the Ministry of Education Science and Technology are going to be made to answer for this mess.

The writing of tender documents went on in a very transparent manner. But everything went haywire at the evaluation stages.

The biggest scandal in the whole business is the huge variation between the price that was announced at opening of the tender and the price at which the tender was awarded.

Documents indicate that at the tender opening stage, it was publicly announced that Olive of India had won with an offer price of Sh23.2 billion. Yet when it came to awarding the contract, the price was adjusted upwards by a massive Sh1.4 billion.

During the hearings, an attempt was made to explain away this huge difference on the grounds that the changes reflected the cost of additional services, which the company would supply to the government along with the laptops.

COLLUSUVE BEHAVIOUR

But when the review board interrogated the matter during the proceedings, that explanation was found to hold no water.

Until investigations are concluded and the motive behind this massive price variation is established, it would be premature to accuse anyone of corruption.

But the point must be made that when you allow huge variations — especially after prices have been opened publicly and the winner declared in front of other bidders, you open loopholes which well-connected individuals plotting to pack it in are only too willing to exploit.

In its ruling, the appeals board came to the conclusion that this was a case of manipulation and collusive behaviour.

Incompetence is also a factor. Is it not amazing that the ministerial tender board was not able or willing to determine something as basic as confirming whether or not Olive Technologies of India had the financial capacity to deliver on the multi-billion shilling laptop project?

I keep wondering how a company with such a small balance sheet managed to pass all those tender evaluation stages.

Yet when you read the tender documents, there is no ambiguity at all over the thresholds that were set on the ability to perform.

For instance, you had to provide your balance sheet for three years to demonstrate profitability trends.

Secondly, you had to prove financial capacity and the volume of business you had done in the last three years.

ARBITRARILY CHANGED

Third, you had to show that you had enough cash in the bank and liquid assets.

Where is the ambiguity? Clearly, the Ministry of Education is guilty of gross incompetence.

Did they conduct a thorough due diligence process on the bidders or shall we assume that the teams evaluating the tenderers were compromised?

What do you say of a procurement process where rules and methods are arbitrarily changed in the middle of proceedings?

Clearly, the capacity to procure large and complex projects — especially deals involving procurement of ICT systems — is still lacking within government.

We have developed a trend where every major ICT procurement ends up in a scandal. We have not forgotten how the Independent Electoral and Boundaries Commission bungled the procurement of the Biometric Voter Register in 2013.

What are the policy issues? Our procurement systems need a complete overhaul.

It is not enough to have a procurement oversight and appeals review board. The main problem with our procurement system is that it puts too much emphasis on complying with procedures rather than delivering value for money.

As long as the procedures are followed strictly, government officials will not care whether they are purchasing goods at prices higher than what is offered in the open market.