The government has controversially cancelled a Sh4.9 billion contract for the provision of a Healthcare Information Technology (HCIT) system under the Managed Equipment Service (MES) in a move that could plunge the healthcare sector into a crisis.
The contract had been awarded on October 2, 2017 to Seven Seas Technologies Limited, an indigenous firm specialising in ICT.
The implementation of the project would have put Kenya in the top tier of countries that have managed to transform their health sector through technology but, as matters stand, it remains unclear whether the Ministry of Health will re-advertise the project.
The project entails establishment of a hospital information system and supporting the ICT infrastructure to benefit public hospitals nationwide towards accelerating the achievement of the e-Health Strategy.
The cancellation will either ground or inexplicably delay the roll-out of the Universal Health Coverage (UHC), making it more expensive.
UHC is one of the segments of President Uhuru Kenyatta’s Big Four plans for the country, alongside manufacturing, food security and infrastructure.
In the recent supplementary budget passed by the National Assembly, Sh18 billion was allocated to the Universal Health Coverage.
The company was summoned to appear before the Senate ad hoc committee investigating the MES project on November 18, 2019, to provide explanations as to why the project had not been delivered.
But in a surprise move, the company received a termination letter from the Ministry of Health dated November 18, 2019, alleging that the contract contains several clauses that were not in the original tender documents.
The letter was addressed to SevenSeas Technology Limited founder and group chief executive Michael Macharia and signed by Health Principal Secretary Susan Mochache.
In the letter, Ms Mochache states that the clauses impose obligations that do not conform with the tender documents.
“The requirement for an original copy of the GoK Support Letter to be given to your firm does not feature anywhere in the tender documents. It is overtly clear to the ministry that your firm lacks the requisite financial capacity to execute the HCIT contract and has been unable to mobilise any funding without a GoK Support Letter,” Ms Mochache says in the letter.
“In the circumstances, the Ministry of Health wishes to now inform you that the contract for provision of HCIT solutions has and is hereby terminated forthwith, on account of its illegality, which you as the contractor knew or ought to have known,” she adds.
The government gives the firm 40 days to vacate the site.
“The company is taken aback at the turn of events that instead of securing the Support Letter, which MoH has on previous occasions promised in writing to issue to the company, they instead decided to illegally and unlawfully terminate the contract,” Mr Macharia says.
Curiously, the termination letter is not copied to Attorney General Kihara Kariuki, who is the custodian of the government’s legal contracts.
Both Health Cabinet Secretary Sicily Kariuki and Ms Mochache could not be reached on phone. They did not also respond to text messages sent to them to comment on the matter.
The purpose of the original support letter duly executed by the National Treasury was to ring-fence the money budgeted for the programme by the government and insulate the contractor and its lenders from risk.
Mr Macharia on his part maintained that the requirement of the support letter was indeed part of the tender documents duly signed by his company and government.
“We are utterly surprised that the Ministry of Health has terminated the contract. We are equally surprised that it has taken over 24 months for the ministry to allege that the contract contains several clauses that were not founded on the tender documents,” Mr Macharia says in response to the PS’ letter dated November 25.
The letter is copied to Ms Kariuki, AG Kihara Kariuki, Head of Public Service Joseph Kinyua and KEPSA chief executive Carole Kariuki.
Among other things, the letter urges the government to review the tender documents and reconsider its decision and within 14 days, failing which it may seek legal redress.
“Your decision will have far-reaching consequences, including exposing Kenyans to a substantial claim for compensation,” says Mr Macharia even as he expresses desire to have the matter solved amicably.
“The obligation of the Ministry of Health to deliver the support letter was a major determinant of our decision to bid. The belated attempt to walk away from your own documents is unfortunate and without any justifiable legal basis. We see it as abuse of public authority,” Mr Macharia says.
The HCIT project was meant to deliver the technology pillar of the UHC agenda.
The automation of the national healthcare system was intended to empower the Ministry of Health to have real-time data on the clinical impact of the MES infrastructure and real-time visibility on MES equipment uptime in order to better manage vendor Service Level Agreements (SLA).
The national and county governments were also to be enabled to have full visibility on the Kenya Healthcare Services statistics and connection of medical experts online across Kenya to provide digital tele-diagnostic services nationally.
There was also the need to provide nationwide healthcare data for national research, national innovations and healthcare development.
The project roll-out was in line with the national government’s commitment to provide affordable healthcare for all under the Big Four agenda.
The project entails deployment of a Hospital Information System and supporting ICT Infrastructure across 98 county and sub-county referral health facilities including 47 level 4, 5 and 6 hospitals and four referral hospitals.
It also includes training and capacity building of various users and addressing the challenge of scarce medical expertise nationally and in the counties.
For the country to achieve and benefit from the universal health coverage goals, it is required to ensure equitable access to healthcare services for all.