Why Jubilee schools laptop project may take time to kick off

Lawyers Mohammed Nyaoga (left) and Ahmednasir Abdullahi representing Olive Telecommunications leave the Milimani Law Courts, Wednesday. Olive is challenging cancellation of the laptops tender contract. [PHOTO: FIDELIS KABUNYI/STANDARD]

By LUCIANNE LIMO

Kenya: A fresh twist in the controversy surrounding the tendering of Standard One laptops has emerged after the High Court temporarily barred the Government from re-opening the procurement.

Justice Weldon Korir issued the orders after the winner of the controversial tender, Olive Telecommunications Pvt Limited, moved to court to challenge last week’s decision by Public Procurement Administrative Review Board to cancel the award of the contract.

“If a stay is not granted, the matter will be overtaken by events and because the dispute involves international companies, it is in the interest of justice to protect investors’ interest,” said Korir.

The judge directed Olive to serve the board with suit papers and appear before him on April 10 for hearing of the matter.

Unfair hearing

The Indian firm wants the court to stop the board from procuring afresh the tender for laptops until their case is heard and determined.

Olive claimed it was aggrieved by the actions of the board to annul their tender without giving them a fair hearing. The firm stated that the board made a ruling on whether it had met the financial criteria to qualify for tender and whether it submitted its bid alone or with another entity, yet the matter was not properly before the board for it to consider.

“If such allegations had been properly pleaded and Olive given a proper opportunity to respond to it, it would have demonstrated that it did indeed meet the financial criteria regarding the turnover, hence its bid had passed the preliminary stage,” said Ajay Jain, Olive’s sales director.

The board found that the combined average turnover of Olive and its consortium partner was below the Sh8 billion required under the tender.

But Olive said the combined average annual turnover and its consortium partner New Century Optronics Company Limited was Sh17.85 billion.

“In finding that the applicant lacked the necessary financial turnover, the board made a gross error of law and fact,”added Jain.

Olive further said the board made an error in law and fact by finding that the firm was not in a joint venture with another company.

The board cancelled the tender on grounds that the Indian firm lacked experience.

Board’s errors

Olive however said the board erred in calculating the length of experience of the firm using the date of the ISO certificate.

“If the board had considered the information regarding the experience of the consortium, it would have found that the applicant met and surpassed the experience criteria,” Jain added.

The applicant and its consortium partner have allegedly been in business since 2008 and 2007 respectively. Olive claimed it had shipped over 20 million devices to over 40 countries over the past 10 years.

It also claimed that its partner, New Century Optronics Co Ltd, has shipped over 4.5 million high value ICT and electronic products to customers like Walmart, Best Buy, Sansui and others.

Last week, the appeals board found the award to an Indian firm questionable. The Standard reported that the jolt to the programme the Jubilee administration wanted rolled out in the first year could be considered unsettling to President Kenyatta’s team, because it was supposed to have been rolled out in the first year of office by the team that took over last year April 9.

Financial capability

The board ruled that Olive Telecommunications Pvt Limited did not win the tender fairly as the probe unearthed irregular dealings and found the Indian firm was favoured. Olive, that was awarded the tender by the Ministry of Education, Science and Technology, was found by the board to lack the financial capability to supply the 1.2 million gadgets.

The board said the annual turnover of the firm between 2010 and 2012 was between Sh6 million and Sh768 million, which was below the Sh8 billion minimum required for supply of the gadgets.

The board also found that Olive received preferential treatment.

Information on feedback on the progress of tendering was not the same to all bidders as Olive obtained more detailed information.

It was also determined that the committee that awarded the tender to Olive did not consider the fact that the last quotations had been altered from the initial asking price, contrary to the Procurement Act. The board also found out that Olive was not in a joint venture with another Chinese firm, as they submitted to the review board.

“There was no joint venture document supplied to the board,” said the procurement watchdog. In their surprise verdict affecting a tender at the heart of the President and Jubilee manifesto, the board asked the Ministry of Education to undertake fresh retendering and complete the entire process within a period of 45 days.

That has now been put on hold by the High Court order.