Why MPs want Sh4.7 billion Seven Seas tender reviewed

Seven Seas Technologies CEO Mike Macharia

Parliament last week called for a review of the Sh4.7 billion tender to digitise Kenya’s healthcare system, throwing the project in limbo. It also raised concerns over the Government’s procurement process.

This follows an inquiry by the Parliamentary health committee into the delayed implementation of the project awarded by the Ministry of Health to local tech firm Seven Seas Technologies last October and originally scheduled for completion early this year.

The project entailed the establishment of a data centre at Kenyatta National Hospital (KNH) linked to 97 other county and sub-county referral health facilities, the National Hospital and Insurance Fund (NHIF) and the Kenya Medical Supplies Authority (KEMSA).

The delay of 10 months after the tender was awarded prompted a parliamentary inquiry. “There is an issue with the contract with Seven Seas saying the ministry had committed to give a letter of comfort to the supplier who claims they shipped the equipment but have not received the letter of comfort and thus they do not have the capacity to bring the equipment,” said Ms Sabina Chege, chairperson of the Parliamentary committee on health.

On Thursday, the committee held discussions with senior management of Seven Seas Technologies and made a visit to KNH to assess the progress of the project revealing the disconnect between government agencies that led to multiple tendering of the same project.

“The proposal from Seven Seas was to inter-grade all the systems including KEMSA, NHIF and KNH to the Ministry of Health but we’re quite disappointed because all we’ve seen are empty rooms,” she said.

The committee is set to table its report in Parliament in a few days’ time but preliminary reports indicate that the Government could be forced to review the contract.

“Parliament will evaluate the contract because there was a promise that was made and we’ll sit back and look at what the contract says and then we’ll have a way forward on what the ministry should do,” said Ms Chege.

In a fresh twist to the saga, however, Seven Seas Technologies on Friday insisted the project implementation is still on track and due for completion in June 2019.

“The scale of the project is very large and the first phase entailed installing the data centre at KNH which was to take eight months and this is currently happening,” said Mr Mike Macharia, Seven Seas Technologies CEO.

We have further learnt that rival bidders are also gunning for the lucrative tender and pushing for a fresh tendering process.

The saga has thrown the spotlight into the Government’s tendering process after it emerged that health agencies led by KNH had embarked on procuring separate digital systems despite the rollout of the project.

“From speaking to KNH staff it seems there was no proper consultation and the ministry sat down and came up with the proposal and it seems all hospitals including KNH had gone ahead with their own idea of ICT systems and now they have been forced to cancel a tender because the ministry already had something in mind,” said Ms Chege.

MPs further raised questions over the reluctance of the Ministry of Health to provide a letter of commitment to Seven Seas Technologies months after signing the tender.

“Despite the Ministry of Health having engaged Seven Seas Technologies as its contractor for implementation of the project in October 2017, the ministry has taken a hands-off approach to the project and is yet to provide the critical documentation required for the contractor to secure the project financing offered to it by a local commercial bank,” says the Parliamentary committee in a memo seen by Weekend Business.

This has raised speculation in some quarters that the delay in providing the letter to Seven Seas, especially after other international suppliers had received their copies, was deliberately meant to stall the rollout and raise grounds for a fresh tendering process.

“The Ministry of Health confirmed that similar letters of support were issued to the other contractors engaged by the Ministry,” reads the memo in part.

Macharia, however, last week said the delay had been resolved and the firm assured of receiving necessary documentation from the Government this week.

“We held discussions with the health ministry after meeting the Parliamentary committee and the understanding is that we’ll be provided with the letter sometime next week and we can begin deployment,” he said.

However, MPs seem to be reading from a different script proposing restructuring the tender for a phased rollout.

“We need to have a sit down between the ministry and the 98 facilities and it may require we do some amendments including proposing the full implementation in Kenyatta National Hospital first, then we roll out to the rest,” said Ms Chege.