News

Intelligence Report: Irregularities In KUTRRH Medical Insurance Tender Looming Scandal

Published

1 year ago

June 7, 2023

Kenya Insights Team

Att:

The CEO,

KUTRRH

The Head of Procurement

KUTRRH

Good Morning,

We wish to bring to your attention the Medical Insurance tender KUTRRH/TNDR/S/095/PSM/I/2022-2023 for Provision of Staff Medical Insurance Cover that closed on 19th May 2023 and the subsequent addendum to it (both attached).

We have widely consulted on the same and concluded that the tender was advertised with proper knowledge of the management that it was restricted to a certain underwriter and the prohibitive requirements put to lock out the other players in the market: a matter that is both unethical and unprofessional.

We have specifically noted the inclusion of some issues like profitability, exaggerated premiums and other prohibitive requirements as mandatory.

The Public Procurement regulator (PPRA) noted the complaints received in regards to this tender and others and the general conduct of the procurement of insurance services and issued a circular referenced PPRA/6/5 Vol. II (142)_CIRCULAR NO.3 OF 2023 dated 18th May 2023 on Procurement of InsuranceServices-Tender Requirements. The circular strongly highlighted how procurement requirements have been prohibitive and restricting competition among interested bidders which contravenes Article 227 of the Constitution of kENYA 2010 and Section 60 and 80(3) of the PPADA 2015. The circular guided as follows:

1. That it’s an offence under the Act to breach the rules on specific procurement requirements or prepare skewed or tailored technical specifications as provided under Section 60 of the Act.

2. When using the Open Tender method, Procurement entities should allow participation of eligible registered insurance service providers.

3. Developed specific requirements relating to Goods, Works or Services being procured should promote fair and open competition among those who may wish to participate in the procurement proceedings.

4. The evaluation criteria should be objective and take into consideration the estimated cost of Goods, Works or Services and be aligned to registration requirements provided for under the Insurance Act.

We are of the opinion that KUTRRH intentionally ignored and continues to ignore the issues raised by the regulator due to the already negotiated kick backs with the underwriter and an insurance agent. When we visited KUTTRH and requested to see the relevant offices to raise the same, we were intentionally delayed/kept waiting and were later not allowed to see the bosses.

Consequently, we have established that, an agent by the name Abraham Mworia Phone No. 0722591585 has been meeting the said bosses and influenced them to put the prohibitive requirements so as to make sure the underwriter he is fronting is the only one who qualifies and is awarded the tender.

We wish to challenge the CEO and Head of Procurement who have been acting with blessings of the Board Chair Prof Olive Mugenda, who the agent claims to have given alot of cash previously and currently to seal the deal. We already have evidence of all this and of how all this has been schemed.

Abraham has been known to be a very unprofessional agent in the insurance business who has zero technical knowhow of running any insurance account and has been fronting this behaviour where he influences the CEOs and Heads of Procurement to only allow one or two underwriters by giving them money and locks with the only ones who qualify. This is the worst conduct we have ever experienced in the insurance industry.

Additionally, We have constantly noted your reluctance in observing the law and pillars of public procurement and public finance and therefore invite you to let us know the plans you have in regards to compliance with the guidelines issued by the Public Procurement and Regulatory Authority by CoB Thursday, 8/6/2023 and wish to remind you that KUTRRH is not a personal business but a Public entity and you should exercise the highest level of professionalism and integrity.

We will be glad to hear from you on the concerns mentioned and request you to treat this as urgent.

ADDENDUM-NO.-1-STAFF-MEDICAL-INSURANCE PPRA Circular No. 3 of 2023 TENDER-FOR-PROVISION-OF-STAFF-MEDICAL-COVER-INSURANCE

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