US$9K Per Laptop Tender: "In A Normal Economy, USD4,590.46 Should've Been The Final Price"

Members of the public criticised Parliament for awarding the tender saying this was grand corruption.

In response, Mr Kennedy Chokuda, the Clerk of Parliament, issued a statement claiming that he had cancelled the tender on Friday 9th August 2022. 

Yet, in a different letter dated 29 August 2022, Chokuda notified other companies that had applied for tender that Blinart Investments and Mid-End Computers and Hardware had won the tenders.

Pindula News presents below some of the comments on the tender.

Elias Mambo (Zimbabwean journalist and the founder of Zim Morning Post):

So the lowest bidder had charged close to $500 000 for 173 laptops, based on the specifics which parliament wants. I hear there is a presser tomorrow (Monday 19 September 2022) GGuvamatanga (Finance Secretary) let Parly come clean..what really happened?

The lowest bidder said based on the specs wanted.. the cost of the laptop is around $1200 and then add 20% profit and shipping.. total cost of a laptop is estimated to be $2700… The lowest bidder raised a red flag on the $9000 laptop cost.. the rest is history… As I promised we will get to the bottom of it…

Hopewell Chin’ono (award-winning journalist):

Magnificent Honda, one owner, lady driven, full service history! US$9,400 or swap with a laptop!

Paul Mazonde @isheGutu:

Usually, govt specifications on laptops include the cost of the laptop, cost of Microsoft office with licence, cost of Windows with licence, Antivirus.

Daddy B @DaddyB71584593:

I still don’t agree… Why buy a 20 000 rand laptop for what… A normal 5000 rand laptop is enough… I terabyte hard drive 8 gig ram… For heaven’s sake they are not buying servers it’s a laptop why loot money like that? And where are they going to buy them from? Why not SA?

Tawanda Donal Hatugari @DonalTawanda:

My humble opinion is that there was serious colluding among the bidders and obviously with someone inside the Parliament’s procurement unit. A serious affront to procurement ethics. And where is PRAZ when all this is happening?

Pindula News presents a Twitter thread by Michael Rushizha @mrushizha who believes that Blinart Investments’ price was justified:

It is important to understand that this is not just any laptop. This is a high-end laptop with a touch-screen, some fancy software and accessories. These laptops don’t come cheap. We need to breakdown the requirement into smaller components for everyone’s comprehension.

According to pages 16 and 17 of the tender document, Parliament of Zimbabwe ordered 173x 13.3 or 14-inch laptop consisting of the following: 1x Microsoft Office 2019 Professional 1x Sophos Antivirus 1x HP Wireless Mouses 1x HP Laptop Stands 1x HP Laptop Carry Cases.

Now we need to cost to each item. For the 13.3 or 14-inch laptop, I’m going to use a ‘cheaper’ HP EliteBook 840 G8 for this example. This baby costs a cool USD 2,259.00 with a storage of 512 GB. We need the storage to be 1.0 TB, so we add USD 80.00 to get USD 2,339.00.

Next, we need to factor in the cost of Microsoft Office Professional. The current version is 2021 and it goes for USD 439.99 bringing our running total to USD 2,778.99.

We also need a Sophos Antivirus license, which is actually an annual subscription. This license costs USD 28.00 per user, or per laptop. This brings our running total to USD 2,806.99.

Next is the Wireless Mouses going for USD 16.99 each. This brings our running total to USD 2,823.98

The HP laptop stands are next for USD 49.95 each. This brings our running total to USD 2,869.93.

Last but not least, are the HP laptop carry cases going for USD 36.99 each. This brings our running total to USD 2,906.92

Now the business dynamics. These computers are not manufactured in Zimbabwe or Africa. The prices are from HP, so I’m going to use a 3% shipping fee to one of the South Africa distributors which suppliers in Zimbabwe deal with, bringing our running cost per laptop to USD 2,994.13.

Next we need to add another 3% shipping fees from South Africa to Harare, Zimbabwe. This brings our running cost per laptop to USD 3,083.95.

Our laptops are now in Zimbabwe, and fortunately, laptops don’t pay custom duties, but they pay VAT of 14.5% and this adds a further USD 447.17 to our laptop bringing the running cost per laptop to USD 3,531.12

After the taxman’s lion share, the retailer adds a mark-up for their trouble ranging between 20% – 30% depending on the risk. For this example, we will go high-end and apply a 30% mark-up to come to USD 4,590.46.

In a normal economy, USD 4,590.46 should have been the final price for each of these laptops. Sadly, Zimbabwe’s economy is anything but normal. This is where it all start to become interesting.

You see, @ReserveBankZIM and local banks haven’t been issuing foreign currency to non-priority sectors for some time now. This led to people using alternative means to acquire this resource. At the time this tender close, parallel market rates were at a record USD 1: ZWL 800.

Page 10 of the tender states that, bids should be priced in ZW$ and foreign currency equivalent at the prevailing market rate. And that payment will be done in ZW$ converted at the ruling rate on the agreed delivery timelines as stated in the contract.

To cater for loses presented by the disparity between the ZW$ parallel market rate and US$ interbank rate, for which payment was going to be made at the date of payment, one needs to multiply the final US$ value of the laptops with the parallel rate of 800 to get the ZW$ value and divide by the interbank rate of July 15th 2022, which was 396.8940 In the end, the final ZW$ value of each laptop will be ZWL 3,672,368.00 and the US$ value will be USD 9,252.77 which is very close to the much disputed USD 9,264.48 you see today.

Whether we like it or not, Blinart may NOT be the villain here. I would like to think that @ParliamentZim did their adjudication processes and found everything above board. It’s possible that they may have been bidders with lower prices, but got disqualified for non-compliancy.

Tenders of such value usually go through the Special Oversight Committee (SPOC) to which every bidder MUST pay a SPOC Administration Fee of typically ZWL 15,000.00, in which in this case, no such payment was asked of the bidders, and I don’t think it went through SPOC.

In conclusion, the noise made since yesterday was caused by government officials that are not actually in touch with the realities of the country that claim to serve.

@ParliamentZim made a mistake of reacting by cancelling the tender which it professed had gone through internal processes and SPOC. They should have defended their internal adjudication processes and shed light on how the decision was reached with the backing of the SPOC.

Pindula News