Recently, I saw in one of the daily newspapers a floated tender for the supply and installation of the much awaited laptops in primary schools...

In the same advert, it stated that the bid bond for the laptops is kshs 228 million...In normal tenders the bid bond is normally equivalent to 2% of the tender sum which is usually determined by the tenderer. However going by the above figure, the envisaged tender price is expected to be in the region of ksh 11.4 billion...so far so good..

the interesting thing is that the contract will most likely ask for a surety or performance bond which is the clients cover in case the awarded tenderer fails to deliver...This bond is pegged at 10% of the tender sum...This means that the envisaged value of the surety bond will be in the region of kshs 1.2 billion...

Since the two bonds are supposed to be in the form of a bank guranteed cheque obtained upon depositing of cash, then it means that the bidding company will have to have a staggering kshs 1.4 billion (US$ 16 million) in its account for the bonds alone!!!!

Unless the local banks enters into special arrangements with the bidders for the bonds, I wonder how many local companies would be having the capacity to raise this kind of cash in their accounts...

If I were the government whose main intention was to have the local suppliers/companies benefit from this project, I would have subdivided it into 47 different contracts each of approximate value of kshs 250 million...An initial amount of kshs 2.5 million bid bond and kshs 25 million surety bonds would be easily managed locally...Just my thoughts.