Alarm as KEMSA attract a barrage of tender litigations, blamed for Sh452million loss
The embattled Kenya Medical Supplies Authority, the national drugs agency is on the limelight over a barrage of tender litigations it has attracted arising from alleged procurement malpractices and contested changes of currency used during the bidding process once again parachuted the agency into the limelight and its management.
A review by The Informer Media Group has revealed that complaints regarding tendering processes, awards and currency variations of at least six contracts worth hundreds of millions by KEMSA have been filed before the Public Procurement Regulatory Authority (PPRA) in a span of less than one year.
In one instance, PPRA Director General Patrick Wanjuki apportioned direct blame to KEMSA Chief Executive Officer (CEO) Terry Ramadhani Kiunge’s office for failing to observe 452millionprovisions of the contract with respect to applicable currency payment which occasioned a Sh452million losses in four contracts awarded to Sai Pharmaceuticals Kenya Limited.
“We note that your procuring entity has incurred huge losses amount to Sh452,148,971.44 due to foreign exchange fluctuations during 2019/2020, 2020/2021 and 2021/2022 financial years. …Your procuring entity therefore needs to respect the provisions of the contract with respect to applicable currency payment. Taking cognisance on the need to advise the complainant, kindly inform the authority how you intend to address/resolve the matter to enable us revert/advice the complainant by December 7, 2022.” PPRA Director General told Ramadhani through a correspondence dated November 30, 2022 referenced, PPRA/COMP/105 VOL.VII (23).
Sai Pharmaceuticals Limited registered the compliant with PPRA over KEMSA’s decision to settle the payments in Kenya Shillings despite having quoted in US Dollars.
According to our investigations, KEMSA awarded Sai Pharmaceuticals Limited a total of four contracts; KEMSA/ SSD.OITI/2020-2022- Supply of pharmaceuticals, KEMSA/ONTO4/2021-2023- Supply of Health Technologies (Gumboots, Daipers, Surgical Dressings, Disposable Bags and Stationery, KEMSA/GOK-MOH/OITO3/2021-2023-Supply of Health Products (ARV Machine) and KEMSA/GOK-MOH/OITO1/2021-2022-Supply of Health Products (TB Machine Pack).
In the tender documents, KEMSA advised the tenderers that: “…the tenderer may express the tender price in any currency. If the tenderer wishes to be paid in a combination of amounts of different currencies; it may quote its price accordingly but shall use no more than two foreign currencies in addition to the currency of Kenya.” The tender documents under Section 1. No.15 of the tender documents in question reads in part.
Additionally, the tendering processes and consequent award of all the four contracts running into hundreds of millions to one firm, Sai Pharmaceuticals Limited, according to internal sources is questionable.
On October 12, 2022, Revital Healthcare (EPZ) Limited based in Kilifi filed a tender complaint with PPRA citing procedural flaws in the award of tender for the supply of Health Technologies awarded to one of the firms in September 2022.
The tender in question has been quoted as Tender No. KEMSA/ONT26/2021-2023-Supply of Health Technologies (Feeding Tubes, Intercostal Drainange Tubes, Airway Guedel and Solusets for Blood).
Revital Healthcare (EPZ) Limited September 26, 2022 and was received at Ramadhani’s office on September 28, 2022 expressing their dissatisfaction over the tendering process and consequent award of the tender but never received feedback from the CEO’s.
And in a sixth matter in a row, the Public Procurement Administrative Review Board (PPARB) has annulled the award of Sh72million tender for the provision of medical insurance cover to First Assurance Company to KEMSA staff members.
The board ruled that a flagged requirement at the preliminary examination should not have been applied because it was ambiguous.
The PPARB directed KEMSA to admit Jubilee Health Insurance and other bidders at the technical evaluation stage, for fresh bids.
“The letter of notification of the award of the tender for the provision of medical insurance cover for Kemsa staff dated November 15, 2022, issued for the first respondent and addressed to the interested party be and is hereby nullified and set aside,” the board said in a recent ruling.
Jubilee Health Insurance had argued that it was knocked out at the preliminary stage unfairly.
Kemsa invited bids for the provision of a two-year medical insurance cover for its staff in September 2022.
The tender attracted a total of ten bidders including GA Insurance Limited, Zamara Risk Insurance Brokers, CIC General Insurance Limited, AAR Insurance Kenya Limited and Madison General Insurance Limited.
Others were Liaison Group (Insurance Brokers) Limited, Heritage Insurance Company Limited, APA Insurance Limited, First Assurance Company Limited and Jubilee Health Insurance Limited.
Only four firms including First Assurance Company Limited’s tender were allowed to move to the technical evaluation stage.
After technical and financial evaluations, the tender committee in November 2022 recommended that the contract be awarded to First Assurance Company Limited to the tune of Sh72 million inclusive of all taxes.
Ramadhani’s tenure at the helm of KEMSA leadership has been rocky since her controversial appointment as the CEO in May 2019 by former Health Cabinet Secretary Mutahi Kagwe.
According to impeccable sources at Afya Haouse, Health Cabinet Secretary Susan Nakhumicha has already initiated a road map to streamline the national drugs authority at both board and senior management level.
