Ethiopia: Bid Too Small for Oracle, Girma Wake Says
The American IT firm, Oracle, has been left out from a multimillion dollar IT bid with Ethiopian Airlines, because the company felt the value of the contract would be too small for it to get involved directly, Girma Wake, CEO of Ethiopian Airliners, said on Friday, August 7, 2009.
Oracle was one of the two companies short listed out of six by the airline to provide a technology solution for the Enterprise Resource Planning (ERP), one of the two IT components ET issued public tenders for in late 2008. These bids are part of the airline's plan to invest over 300 million Br for the installation of a grand IT project known in the industry as Master Systems Integration (MSI).
A controversy over the role of local partners in the bid process led Ethiopian Airline's management to review its contemplation to select the German SAP, which was represented by a local company, Fairfax Global Investment. Oracle has entered into the bid with Trans Computer Technology (TCT), a company largely owned by Wondwossen Mesfin. The airline had informed both companies to re-enter their bids directly without intermediaries.
Oracle felt the bid, which is not worth more than 10 million dollars, was not big enough to warrant their direct participation, and would not continue without their local agent here, Girma disclosed. "They have told us clearly that we were too small," Girma said.
Oracle was buying time to enter into another bid offered by the Ethiopian Telecommunications Corporations (ETC) which has similar projects alleged Girma. It was then that Oracle came back asking for an extension of the deadline for document submission, while SAP came with its own bid proposal. "We gave them the 10 day extension they had asked for," Girma responded to questions at a press conference held at the Hilton.
What brought the disparity with Oracle was when they wanted another extension to the deadline, according to Girma. "This was a joke," he said. Left with a lone bidder, the airline now pursued its negotiations with SAP which has offered a price of US$8.9 million to do the jobs. This is approximately US$90,000 lower than Oracle's offer during the first bid. Girma disclosed ET will sign the deal with SAP when the negotiations come to an end. The airline has hired a Mauritanian national as its Chief Information Officer (CIO) to supervise the implementation of its technology projects.