The National Health Insurance Fund (NHIF) has defended its decision to extend the Sh6.9 billion insurance cover for 120,047 civil servants and National Youth Service (NYS) workers.
In documents tabled in Parliament and seen by the Nation, NHIF acting CEO Samson Kuhora notes that the cancellation of the tender was in line with advice from the Public Procurement and Regulatory Authority (PPRA).
The cancelled tender, number NHIF/035/2022-2023, was for the provision of co-insurance and facultative insurance services for Group Personal Accident (GPA) and Work Injury Benefits Act (WIBA).
Following the termination due to irregularities in the tender documents, which Dr Kuhora admitted were an inside job, NHIF did not have time to go through the normal tendering procedures. This left room for the expiry of contract, which was renewed to avoid exposing civil servants and NYS officers.
“We have received advice from the Director-General PPRA directing us to go for direct procurement as provided for in the Act,” Dr Kuhora said in a status report dated August 17 on the cover to Public Service Principal Secretary Amos Gathecha.
A similar status update was sent to Mr Godfrey Kiptum, Commissioner of Insurance and CEO of the Insurance Regulatory Authority (IRA). This means that the renewed cover is active until 14 April 2014.
Also cancelled were tender numbers NHIF/033/2022-23 for the provision of insurance brokerage services and NHIF/036/2022-23 for the provision of co-insurance and facultative insurance services for group life and final expense insurance. Others were NHIF/037/2022/2022-2023 for provision of emergency road evacuation services for NHIF scheme members, NHIF/032/2022-2023 for supply, delivery and implementation of an endpoint solution and email security, and NHIF/002/2022-2023 for the provision of actuarial services.
“We evaluated the timeframe for receiving, evaluating and awarding bids for the re-tender and it was not feasible as a further extension would have been contrary to the urgent need for services as required by law. Due to the urgency of this service, we went direct, completed the process and have now signed the contracts with the co-insurers,” said Dr Kuhora.
The NHIF letter to IRA dated August 17 shows that the coinsurance for the provision of group life and final expenses will be undertaken by Britam Life Assurance, CIC Life Assurance, Pioneer Assurance, Sanlam Life Insurance and Absa Life Assurance.
The letter also shows that the co-insurance for the provision of GPA and WIBA will be provided by Jubilee Allianz General Insurance, Britam General Insurance, CIC General Insurance, Old Mutual General Insurance, APA Insurance and GA Insurance.
On August 16, the High Court issued interim orders restraining NHIF from extending, renewing or implementing the expired contracts pending the hearing and determination of an application by Mr Fredrick Ochieng.
NHIF was listed as the first respondent, with National Treasury Cabinet Secretary Prof Njuguna Ndung’u, his health counterpart Susan Nakhumicha and Attorney-General Justin Muturi as the second, third and fourth respondents.
The orders were issued well after the PPRA’s advice to NHIF on July 7, to renew the contract.
Also, by the time the court issued its conservatory order on the tender, which was due to open on June 14, it had expired or died of natural causes.
The cancellation of the extended contract is likely to expose the government to billions of shillings in damages for breach of contract.
