Companies

HP claims Olive double-charged for laptops

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Justice George Odunga will hear the multi-billion- shilling tender case alongside Justices Kanyi Kimondo and Mumbi Ngugi. Photo/FILE

American IT company Hewlett Packard (HP) has claimed that its Indian rival, Olive Telecommunications, double-charged the government for some services in the Sh24.6 billion tender it won for supply of laptops to school children.

The multinational says in papers filed in court that the Indian firm inflated value of the tender when it separately charged the one-year warranty and transportation of the laptops as additional services, yet these were supposed to have been included in the primary contract.

Olive is contesting in court a decision by the Public Procurement Administrative Review Board (PPARB) to revoke the award of the laptops tender.

READ: India’s Olive thrown out of laptops for schools tender

The board directed the tender committee to complete the procurement process with only Hewlett Packard (HP) or China’s Haier Group, Olive’s two main rivals in the hotly contested bid.

“The applicant charged the procuring entity (government) twice for some items. For instance the applicant (Olive) sought to charge for the one-year warranty as an additional service,” says HP in documents filed in court by Iseme, Kamau and Maema Advocates.

HP argues that this was in breach of the tender documents, which required all bidders to provide warranty of at least one year.

The bidders were also required to include in the total price of laptops the cost of delivering the devices to Nairobi and Mombasa.

“Those items could not be priced separately from the total price of laptops,” says HP.

READ: Sh24bn laptops price mystery deepens

The procurement review board found that officials at the Ministry of Education inflated the tender sum by as much as Sh1.4 billion after the final bids were made, against a requirement that value addition on the items would not be charged.

Olive moved to court accusing the PPARB of disqualifying it on grounds that were not raised in the requests for review filed by its two competitors, Hewlett Packard and Haier.

READ: Olive appeals loss of laptops job

PPARB said Olive did not have the financial and technical capacity to supply the devices and was not an original equipment manufacturer as specified in the tender documents.

It found that officials at the Education ministry inflated the tender sum by as much as Sh1.4 billion after the final bids were made, against a requirement that value addition on the items would not be charged.

The Indian company had on December 13 quoted a price of Sh23.1 billion ($268,899,669) as its final offer, but was awarded the tender at a price of Sh24.6 billion.

Chief Justice Willy Mutunga has constituted a three-judge Bench to hear the multi-billion- shilling tender case, which is one of the Jubilee Coalition’s key election campaign pledges.

The case is set to be mentioned on April 30 for direction before Justices Kanyi Kimondo, Mumbi Ngugi and George Odunga.

The Ministry of Education through its senior deputy director, Kenneth Mwangi, has supported a High Court suit filed by Olive, accusing PPARB of overstepping its mandate.

In a sworn affidavit, Mr Mwangi justifies, among other things, the controversial Sh1.4 billion addition to the final price quoted by Olive while disputing findings of the PPARB that the Indian firm had not presented its bid as a joint venture.

He says the instructions in the tender documents allowed the bidders to apply using the joint venture if legally constituted or if not legally constituted with the names of intended partners.

“In view of the fact that the joint venture had not been registered, it was not possible for the applicant (Olive) to submit the tender in the name of the consortium,” says Mr Kenneth, adding that it was not necessary for the applicant and its joint venture partner to have been registered at the time of tendering.

He adds that is the reason why the letter of notification of the award of the tender was issued in the name of Olive, adding that from evidence supplied they were satisfied the company was in a joint venture with New Century Optronics Company Limited.

HP in its response says that Olive’s intention was to get a laptop manufacturer to do the work, comparing the firm to a ‘middleman’.

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