Illegal revision of tender document casts shadow over Sh7bn NHIF deal
The National Health Insurance Fund building in Nairobi. The integrity of a Sh6.9 billion tender issued by the NHIF for the provision of insurance cover for civil servants and National Youth Service (NYS) staff has been called into question after it emerged that a bid document was illegally altered.
The integrity of a Sh6.9 billion tender issued by the National Health Insurance Fund (NHIF) for the provision of insurance cover for civil servants and National Youth Service (NYS) staff has been called into question after it emerged that a bid document was illegally altered.
Firms were asked to bid for the provision of co-insurance and facultative insurance services (consortium) for Group Personal Accident (GPA) and Work Injury Benefits Act (WIBA) for 120,047 civil servants and NYS staff from July 1, 2023, to June 30, 2024.
NHIF issued the tender on May 30, with prospective bidders having until June 14, 2023, to submit their bids. Documents tabled before the National Assembly, and which Nation has seen, show that a tender document posted on the NHIF portal inviting bidders to download it on payment of Sh1,000 by banker's cheque was pulled down and altered before it was re-uploaded.
The alteration of the tender document contravenes the Public Procurement and Asset Disposal Act (PPDA) of 2015, which makes it illegal to make changes to a tender document without attaching an addendum. The amended section is Part 4 of the tender document on technical evaluation, a very important stage in the tendering process that determines whether a bidder has the technical capability to deliver.
The document had set out parameters for the evaluation of the lead co-insurer in a consortium.
The law sets out a standard procurement procedure on how changes should be made to an open and ongoing tender document, without raising suspicion or tailoring it to specific bidders.
“A procuring entity may, at any time before the closing date for the submission of tenders, amend the tender documents by issuing an addendum without materially altering the substance of the original tender,” says Section 75 (1) of the Public Procurement and Asset Disposal Act, 2015. “The addendum shall be deemed to form part of the tender documents,” the law adds.
The law goes on to say that an addendum may be made on the procuring entity’s own initiative, or in response to a request from a candidate or bidder.
No clarification
To date, the NHIF has not clarified whether or not the amendment was requested by bidders.
The Act adds that a procuring entity shall promptly provide a copy of the amendment to any person to whom the procuring entity has provided copies of the tender documents.
If the tender documents are amended when the time remaining before the deadline for the submission of tenders is less than one-third of the time allowed for the preparation of tenders, the accounting officer of the procuring entity shall extend the deadline.
NHIF acting CEO Dr Samson Kuhora did not respond to our queries while NHIF board chairman Michael Kamau referred us back to Dr Kuhora, saying, “Procurement is the domain of the management”. On his part, Medical Services Principal Secretary Harry Kimutai, under whose portfolio NHIF falls, promised to look into the matter.
Curiously, the tender document for tender number NHIF/035/2022-2023, which was tampered with, was not uploaded on the Public Procurement Information Portal (PPIP) as required by law.
However, the three other tender documents have been uploaded on the PPIP. The uploaded tender documents are Tender No. NHIF/033/2022-23 for the provision of insurance brokerage services and Tender No. NHIF/036/2022-23 for the provision of co-insurance and facultative insurance services for group life and final expense insurance services (consortium) for public servants and NYS employees.
There is also Tender No. NHIF/037/2022/2022-2023 for the provision of emergency medical evacuation services for NHIF members. Part 6 of the technical evaluation document that was uploaded, downloaded and re-uploaded on the NHIF portal is also not the same as the one currently on the website.
The paid-up capital on the document is also different from the previously uploaded document as it has been increased.
In Part 4 of the amended tender document, the lead co-insurers cumulative gross underwritten premium in group life and final expenditure for the past three years (2020, 2021 and 2022) attracted a maximum of 12.5 marks, a premium of Sh5 billion and above five marks.
There is also a premium above Sh2.5 billion to Sh5 billion of three marks, a premium above Sh2.5 billion to Sh1 billion of two marks, premium below Sh1 billion of one mark.
There was also a requirement for co-insurers to have combined cumulative gross underwritten premiums in the last three years for group life and final expenses only.
However, in the amended tender document, the lead co-insurers cumulative gross underwritten premium in general insurance (excluding medical) for the past three years is a maximum of five marks, premium above Sh15 billion five marks and premium between Sh10 billion and Sh14 billion three marks.
The premium between Sh5 billion and Sh9 billion was two marks while a premium below Sh5 billion was one mark.
