The tendering process that culminated to the award of the multi-billion two years’ comprehensive group life insurance cover contract for police and prison officers in favour of Pioneer Assurance Company Limited in 2014 and was later extended in 2015 has been challenged as fraudulent.
A whistleblowing petition to the National Assembly shows that Pioneer Assurance was awarded the contract at a cost of Sh1.8billion against the lowest evaluated bidder, British American Insurance Company (K) Ltd that quoted Sh629million by altering the evaluation criteria.
According to a petition that was received by the Clerk of the National Assembly on February 2, 2023, the petitioner, Nyasani Amos claims that Pioneer Assurance’s bid was upheld and considered responsive despite not having met the two per cent bank guarantee mandatory requirement of the quoted tender sum that translated to Sh34.9million.
Instead, Nyasani says, the availed bank guarantee submitted during the tender opening amounted to Sh32.9million and was dated May 26, 2014.
Another unsigned bank guarantee amounting to Sh3million dated May 28, 2014 was allegedly submitted two days after the tender opening the Public Procurement and Disposal Act, 2005.
When contacted by The Informer Media Group for comment, Group Managing Director and Chief Executive Officer of Pioneer Assurance Company Limited David K. Ronoh did not respond to phone calls or questions sent via mail and short text messages.
Similarly, Vigilance House, the National Police Service headquarters and Magereza House, the Kenya Prisons Service headquarters were not available for comment.
“The lowest bidder was purportedly found not to be responsive. However, the basis upon which the lowest bidder was disqualified is not among mandatory requirements in the preliminary evaluation contrary to Section (66) 2 of the Public Procurement and Disposal Act, 2005. The section prohibits introduction of a new criterion during evaluation and comparison of tenders.
The petitioner adds that: “It was mandatory that two per cent of tender security on the quoted tender amount be guaranteed. However, this requirement was waived in respect of the awarded firm as a guarantee of Sh32,940,252.00 issued by a bank on 26 May 2014 was accepted instead of Sh34,944,194.00. In an effort to defeat the audit trail, an unsigned bank guarantee amounting to Sh3,000,000.00 was issued by another bank on May 28, 2014 to cover the shortfall amount but no reason has been given for the omission.” The whistleblowing petition reads in part.
The controversial two years’ contract was hurriedly signed on July 1, 2014, a day after the notification of award Ref: No. NPS/IG/C/C/GEN/41 Vol.1 (48) dated June 30, 2014 was issued without observing the requisite 14 days’ period for any possible contestation after the notice of award before signing.
At the time of the signing, David Kimaiyo was serving as the Inspector General of Police while Mutea Iringo and Kajiado governor Joseph Ole Lenku were serving as the Interior Principal Secretary and Cabinet Secretary respectively.
After the contract was extended in 2015, the contract was taken over by the National Hospital Insurance Fund (NHIF) and ended in July 2021 but was expected to December 30, 2022.
Consequently, a consortium of companies with CIC General Insurance Ltd as the lead insurer won the Sh8.7billion tender to provide the National Police Service (NPS) and the Kenya Prison Services (KPS) members medical cover.
The consortium also includes Britam General Insurance Company (K) Ltd and Old Mutual General Insurance Kenya Limited.
NHIF, which also made a bid, was disqualified for quoting way above the consortia with a Sh9.4billion.
In a statement, NHIF said that the comprehensive medical cover to member of NPS and KPS expired on December 31, 2022.
NHIF CEO Peter Kamunyo directed Regional and Branch Managers to communicate with healthcare provider of the transition as well as policyholders.
“We should all liase and consult as necessary to ensure beneficiaries on ongoing treatment are not inconvenienced,” CEO Kamunyo in an internal memo to Head of Departments said.
“In that regard all notifications to healthcare providers and other service providers should be done by close of business today, 30th December 2022,” the CEO added.