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Olive Telecommunications goes to court over revoked Kenyan laptop tender

Bid involves 1.3 million laptops for school project

India's Olive Telecommunications has gone to court to appeal the revocation of the laptop supply award by the Kenyan government for a nationwide school project.

The company is challenging the decision of the country's Public Procurement Administrative Review Board (PPARB), which revoked the bid award.

PPARB ruled after a review of the tendering process that the winning bid was wrongly awarded to Olive because the Indian company is not an original equipment manufacturer, as required by the Kenyan tender law.

The PPARB further said Olive does not have the capacity to supply the required 1.3 million laptops for $261 million, which the Kenyan government said was the lowest bid for the three companies that were shortlisted for the tender.

But Olive has contends, among other things, that it has the ability and financial capacity to execute the project.

The Kenyan government has warned about firing members of the committee that awarded the tender to Olive.

Olive uses Chinese subcontractors to manufacture Olive-branded devices, and allegedly added computers to its list of products after it was shortlisted by the Kenyan government, according to reports.

PPARB also alleges that Ministry of Education officials had inflated the price by 1.4 billion Kenyan shillings (about US$17 million), effectively flawing the whole process.

Olive had offered to supply the laptops for 23.1 billion shillings while submitting its final offer in December 2013, only for it to be awarded the tender by the Ministry of Education at 24.5 billion shillings

Hewlett-Packard and Haier Electrical Appliances of China were knocked out of the bid by Olive, but they criticized the process as having been flawed and appealed the bid award decision.

In its ruling this month, the PPARB also ordered the Ministry of Education's tender committee to award the tender to one of the remaining two bidders -- HP and Haier.

The ruling automatically makes HP the lowest bidder, at 25 billion shillings, compared to Haier's 27 billion shilling bid. According to the Kenyan tender laws, the lowest bidder gets the tender.

Olive Telecommunications Chairman Arun Khanna said, "the ruling has painted the company as box movers. We are therefore openly challenging the decision of the review board in court."

Olive claims it has a presence in 23 countries and has sold a total of 20 million devices around the world since it was founded in 2006.

Kenyan Secretary for Education Jacob Kaimenyi is also under increasing pressure to resign following the scandal. Kaimenyi had announced that the company had the capacity to do exactly what was expected of it by the Kenyan government. But he now claims he was misled by the tender committee and that those responsible will be axed.

The controversy surrounding the awarding of the laptop project has cast a shadow on the country's rollout of the laptop project in schools across the country as the supply of the first batch of the laptops (400,000 units) was supposed to have been made at the end of this month.

The Kenyan government cancelled the first bidding process last year after rejecting a 32 billion-shilling price quoted by suppliers.

The tender controversy in Kenya adds to a number of African countries including Zambia and Uganda that have revoked tenders because of corruption by senior government officials.

In Zimbabwe, a controversy about how the bidding for the supply of communication equipment was awarded to Huawei is still in court after a local company accused officials from the procurement authority of corruption in the manner in which they awarded the tender.


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