Fresh controversy hits teachers medical insurance

A Sh15 billion Teachers Service Commission (TSC) medical and group life insurance cover for over 260,000 people has been hit by fresh controversy that could derail the ongoing procurement process.

There are fears the dispute over the lucrative deal could end up in court after TSC awarded the tender to AoN Kenya Insurance Brokers last week despite claims of irregularities the other bidders wanted addressed.

The intrigues surrounding the tender have also sucked in the Public Procurement Oversight Authority (PPOA) who wrote to TSC asking for an explanation.

A senior procurement official at the commission is also said to have been sacked last month after he called for a review of the process.

The procurement officer, a Mr Muiruri, had raised the alarm and demanded a review claiming that AoN Kenya Insurance Brokers had offered two different bid securities.

“The evaluation report was forwarded to the head of procurement function who prepared a professional opinion recommending that the bids be re-evaluated,” reads a letter from Mr J.O. Juma, the PPOA Director-General.

The PPOA boss further wrote: “One of the reasons the head of procurement function recommended re-evaluation of bids was because AoN Kenya Insurance Brokers Ltd provided two tender securities, one for Sh100 million issued by Gemina Insurance Company LDT, and another for Sh180 million issued by M/S CBA (Commercial Bank of Africa) instead of one hybrid model.”

Mr Juma’s letter further stated: “You availed a copy of clarification on the tender dated 16th July, 2016. One of the issues clarified under item 6 was that bidders must bid for both models.

"The tender security required is 1 per cent of the hybrid model quote. This tender security will accommodate both models. The tender security issuer must be from one organisation.”

But in her letter to PPOA, TSC Chief Executive Officer Nancy Macharia argued that the issue of two bid securities could not have been used to disqualify AoN Kenya Insurance Brokers because one of the bonds was already over the one per cent required.

Three insurance brokers had placed bids for the three-year tender whose total budget is Sh15 billion.

They include AoN Kenya Insurance Brokers whose total bid amounted to Sh15.7 billion, Liaison Group (Sh17.4 billion) and Clarkson Insurance Brokers (Sh14.7 billion).

Despite being the lowest bidder, Clarkson was kicked out at the preliminary evaluation stage by the committee for failing to properly fill tender forms while Liaison lost because of quoting a higher price.

This week, Clarkson said it will seek legal redress over the matter, a move that could halt the signing of contracts between the vendor and the commission.

“We have instructed our lawyers to seek legal redress on this matter so that issues previously raised that undermined the process can be dealt with,” said Clarkson MD Chris Mugwanga.

The initial award to AoN Kenya Insurance Brokers was extended to give TSC room to process the new procurement which was expected to be in place by October 1.

Parliament’s Education Committee is said to be alarmed by the ongoing tender controversy and could step in to investigate.