Kemsa in eye of a fresh storm in Sh3.7bn mosquito nets deal
Kemsa offices in Industrial Area, Nairobi. Kemsa has bungled a Sh3.7 billion tender for the supply of treated mosquito nets intended to help millions of low-income households prevent malaria, in a move that has also cost the State corporation at least Sh370 million in revenue.
The Kenya Medical Supplies Agency (Kemsa) has bungled a Sh3.7 billion tender for the supply of treated mosquito nets intended to help millions of low-income households prevent malaria, in a move that has also cost the State corporation at least Sh370 million in revenue.
Internal documents seen by Nation indicate that the Global Fund has now cancelled Kemsa’s procurement process which seemed flawed in favour of a bidder who did not meet mandatory requirements, at the expense of an actual mosquito nets manufacturer.
The documents further indicate that the only firm that met all requirements under both Kenyan and Global Fund procurement laws and guidelines, China’s Tianjin Yorkool, was unfairly knocked out of the tender evaluation.
The fresh intrigues have drawn controversy back to the State agency that is yet to fully recover from the effects of the Covid-19 procurement mess that saw several politically-connected individuals bag billions in deals whose value for money is yet to be ascertained.
The tender financed by Global Fund was to see the winning bidder supply 10.2 million treated mosquito nets but blunders by Kemsa have now seen the Geneva-based organisation demand action against officials who bungled its implementation.
Exposed to malaria
Millions of households across the country have been exposed to malaria on account of Kemsa’s expensive mistake in the Sh3.7 billion deal.
Counties that were set to benefit from the Global Fund programme include Baringo, Kirinyaga, Marsabit, Turkana, Kilifi, Kwale, Mombasa, Lamu, Tana River, Siaya, Kisumu, Migori, Busia, Nyamira, Kisii, Uasin Gishu and West Pokot.
Others are Narok, Trans Nzoia, Nandi, Taita Taveta, Elgeyo Marakwet and Homa Bay. By the time of going to press, Kemsa had not responded to our queries on the tender and whether it is carrying out an internal investigation on the issues raised by the Global Fund's scathing review.
The tender was to see the supply of both polyethylene and polyester nets, treated with chemicals to ensure they were able to ward off mosquitoes for an extended period of time.
The Global Fund intended to have the treated mosquito nets distributed to families by November this year.
Following the series of blunders and selective application of tender rules during evaluation, the Global Fund has moved procurement to its online portal, Wambo.org, in an attempt to have the treated nets supplied on time.
Read: Kemsa graft may kill UHC
The Global Fund, however, warns in its evaluation of the bungled procurement process that it may be a tall order to get the nets procured and distributed on time.
Documents seen by Nation indicate that Kemsa CEO Terry Ramadhani had appointed four individuals — Martin Wamwea, Lenson Kariuki, Anthony Chege and Cosmas Rotich — to sit on the tender evaluation committee.
Miss out on Sh370m
In addition to placing several lives at risk, Kemsa will now miss out on the Sh370 million revenue it would have made.
The State agency would have made Sh74 million, or two per cent of the contract value, in procurement fees.
Kemsa would also have made Sh111 million, or three per cent of the contract sum, for the use of its warehouses to store the treated nets pending distribution to 23 counties.
An additional Sh185 million, or five per cent of the contract sum, would have streamed into Kemsa’s accounts for distributing the nets to various counties.
Kemsa was initially to tender for 12 million mosquito nets for low-income families in 23 counties, and the process was initiated in November 2022 when the National Treasury started communicating with the State agency.
When the Global Fund realised that funds for the project were insufficient, it asked Kemsa to re-design tender documents and have them call for 10.2 million.
Following delays in the re-design, Kemsa advertised the tender on January 31, 2023. The application deadline was February 23, 2023.
But Kemsa extended the deadline to March 10, 2023, following communication from State Department for Public Health and Professional Standards Principal Secretary Josephine Mburu indicating that there were inconsistencies with the bid documents.
After the bids were opened, Kemsa’s tender evaluation committee only approved five companies. The other 11 bidders were dismissed for various reasons, including the provision of incomplete document sets.
Global Fund’s review of the tendering process has differed significantly from Kemsa’s, pointing to possible tilting of rules in favour of a few bidders.
The Geneva-based organisation has found that three of the firms that made Kemsa’s shortlist — Polymers Pvt, Shobikaa Impex and Partec East Africa — should also have been dropped at the preliminary evaluation stage as they submitted incomplete document sets.
As per the Global Fund review, only Tianjin Yorkool and Premium Movers met the requirements at Kemsa’s preliminary evaluation stage.
Kemsa knocked Tianjin Yorkool out for failing to provide a manufacturer’s authorisation. The document is usually given by manufacturers to ascertain that the products quoted by specific bidders will be supplied.
But Tianjin Yorkool is a manufacturer, which made the provision of the authorisation redundant. Kemsa’s tender documents also mentioned that the authorisation was only mandatory for bidders who are not manufacturers.
“…The TEC (tender evaluation committee) incorrectly assessed Tianjin Yorkool's bid as non-responsive for not including a manufacturer’s authorisation. However, Tianjin Yorkool is an LLIN (treated mosquito nets) manufacturer, and the tender document had explicitly specified that this requirement was only applicable to bidders who are not manufacturers…” the Global Fund’s evaluation reads in part.
Partec East Africa, the firm Kemsa’s evaluation committee picked as the winning bidder, submitted a manufacturer’s authorisation from PPP Holandi DMCC Dubai. Somehow, the document was addressed to a different firm — Pak Poly Products Pvt. The anomaly did not raise any red flags with Kemsa’s tender evaluation committee.
