Police accused of fraud in Sh1.7 billion insurance battle

A battle for the multi-billion shillings contract for provision of a comprehensive group life insurance cover for the National Police Service (NPS) has taken a new twist after CIC Life Assurance Limited accused the police of fraud.

CIC has written to the Public Procurement Oversight Authority (PPOA) accusing the NPS of fraudulently gaining entry into the Integrated Financial Management System (IFMIS), unsealing the bids and doctoring figures to suit one bidder.

The contract, whose annual premium is Sh1.7 billion, has caused a storm within the service after the procurement process took an unpredictable litigation route.

The request for review dispatched to PPOA earlier in the week reads in part: “The procuring entity (NPS) in carrying out its tender evaluation process acted irregularly and in breach of mandatory provisions of the article 227 of the Constitution of Kenya ...when its agents, specifically Dorcas Manasseh and Stephen Bitok accessed and unlocked the IFMIS portal on  May 17, 2016 whilst the tender process was ongoing, unsealed one bid, posted the technical score, financial score and ranked one of the bidders as having submitted the best bid on the said IFMIS portal while posting zero score for all the other bidders.”

In their statement to PPOA, CIC Life Assurance Ltd insists that NPS fraudulently acted in favour of a rival bidder.

“The acts or omissions of the procurement are a manifestation of favouritism of one bidder against the other bidder’s hence discriminatory,” reads part of the letter.

Sources within the police service said the contract has already been awarded to Pioneer Assurance.

The Jubilee government introduced the package as part of it's commitment to improve the welfare and living standards of the police, prisons and other security officers.

CIC accused an unidentified officer of refusing to act even after the alleged breach and irregular activity in the IFMIS systems was brought to his attention.

“Upon noticing that the aforementioned posting of the evaluation results, the applicant raised queries as to the reason why the results of only one bidder were posted on the IFMIS portal. The procuring entity’s officer requested the applicant to furnish the particular screen shot and upon being furnished with the same, the said officer has to date given no explanation,” CIC said in its letter to the PPOA.

CIC maintains that by prematurely posting the results of the tendering process on the IFMIS portal, NPS implied that the evaluation process had been concluded by May 17, 2016 and that the service had declared the best bid, yet results of the tendering process were communicated on June 9, 2016, 30 days beyond the period provided for by the law.

The alleged illegal entry by officers of NPS was noted by Jackline Karasha, the Business Development manager for CIC.

Although it is Karasha’s argument that after bidders had submitted their bids and the tender closed, the IFMIS system, in what she says was by ‘way of design’, shut itself. “One could not add to or deduct there from any information or documents.”

Curiously however, Karasha says she noted that the same IFMIS, which she insists had automatically shut off, had been accessed by the procuring entity and specifically unlocked.

“On May 19, 2016, while checking on the IFMIS portal, I noticed that it had been accessed on May 17, 2016 by the procuring entity and specifically unlocked by one Dorcas Manasseh and unsealed by one  Stephen Bitok whilst the tender process was ongoing. The said Bitok unsealed one bid, quote 217286, while the rest remained sealed as detailed on the screen shots,” she says in her statement.

“On noticing the aforementioned posting of the evaluation results, I raised queries as to the reason why the results of only one bidder were posted on the IFMIS portal,” she adds.

 Karasha wants the tender awarded to CIC Lifer Assurance saying, “We approached the Public Procurement Administrative Review board on June 20, 2016, since we were aggrieved by the discriminatory, unfair and un-transparent tendering process.”

Reached for a comment, Police Spokesperson George Kinoti said he could not immediately comment on the matter.

“It will be very unfair of me to comment on that matter at the moment because I do not have details relating to the issue. I will need to check with the relevant departments so that I can talk to you from a point of information,” he said.

Inspector General of Police Joseph Boinet could also not be reached for a comment as his cell phone had been switched off.