Sh24bn school laptops price mystery deepens

The mystery of how the cost of President Uhuru Kenyatta’s laptops for schools programme was inflated by Sh1.4 billion has deepened after it emerged that the tender committee included in the final price the cost of services that the bidders had agreed to offer free of charge.

Documents show that Olive Telecommunication had on December 13 last year quoted Sh23.03 billion ($268,899,669) as its best and final offer, but the amount was later increased to Sh24.69 billion ($284,814,957) at the award stage.

The Ministry of Education’s tender committee had presented the documents to the procurement appeals board during the hearing of the appeal against the award to the Indian marketing firm.

Arun Khanna, the chairman of Olive, said in a recent interview that the price inflation was to cover transportation of the laptops out of Nairobi to the districts. But the Public Procurement Administrative Review Board (PPARB) found that the price alteration was illegal and nullified the award of the tender to Olive. (READ: Olive to ‘fight to the end’ for tender)

REVIEW BOARD DECISION

Olive has since challenged the review board’s decision in the High Court and obtained orders stopping the ministry from continuing with the procurement as directed by the board until the case that the Indian firm has filed is heard and determined.

Ministerial Tender Committee (MTC) documents seen by the Business Daily show that the bidders had been expressly asked to indicate how far they would distribute the devices without increasing the cost.

Olive and rival Hewlett Packard (HP) promised to take the devices to the district headquarters countrywide while the third bidder Haier Electricals Appliances Corporation had agreed to transport the laptops to the 47 county headquarters free of charge.

When the bids were opened, Olive’s Sh23.03 billion final offer was the cheapest followed by HP’s Sh25.02 billion. The Chinese firm Haier was third with a Sh25.12 billion quotation.

WARRANTY PERIOD

Mr Khanna last week attributed the $15.9 million (Sh1.4 billion) price variance to additional transport costs charged at one dollar per laptop, but the math does not add up given the firm was to supply a total of 1.28 million laptops.

“We had initially agreed to supply Nairobi and Mombasa but the government offered an additional dollar for each laptop to supply to the districts,” Mr Khanna told the Daily Nation last week.

The procurement review board had in its ruling found that the extra charges for logistics were in breach of the tender rules which required suppliers not to charge for value-added services such as transport, spare parts and replacements during the warranty period.

“They were reminded that value-added services were to be free of charge i.e. they were to be offered at no extra cost to the procuring entity,” reads one of the MTC’s documents.

DISTRIBUTE LAPTOPS

The mystery surrounding Olive’s bid is further deepened by the fact that tender documents that the MTC submitted to the PPARB show that the Indian firm had partnered with Orange Telkom Kenya and indicated that it would use the telecom operator’s vast network to distribute the laptops to sub-county headquarters but Orange has since said that it was not in the Olive consortium for the second round of bidding.

“The bidder (Olive Telecommunication Pvt Ltd) offered to transport the computing devices to all district headquarters and have storage facilities at 126 Telkom Orange exchange centres countrywide,” said the tender team in a report marked ‘confidential.’

For the full report go to www.businessdailyafrica.com