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The National Hospital Insurance Fund (NHIF) will now proceed to sign a Sh900 million insurance cover tender for civil servants after a case challenging the award was dismissed.
The Public Procurement Administrative Review Board on Tuesday evening upheld the decision to award the deal to a consortium of insurers led by Jubilee Insurance.
The tender NHIF/033/2018-2019 Group Life and Last Expense for Civil Servants in national and county governments and other institutions and last expense for the National Police Service, was advertised on December 11, 2018 but stalled after the award was disputed.
In the civil servants' scheme, officers in job group A-G will be entitled to Sh700,000 for group life and Sh100,000 last expense, while the senior most (undersecretaries) will benefit from Sh30.8 million for group life and Sh300,000 for last expense.
Last expense
National Police Service members are only entitled to last expense with all cadres getting a uniform Sh250,000.
In parastatals and other institutions, the lowest cadres are entitled to Sh850,000 for group life and a further Sh120,000 as last expense. Senior most staff will get Sh5 million for group life and Sh300,000 for last expense.
The Faith Waigwa-led board found that the application by a consortium of insurance firms of UAP Life Assurance did not merit to warrant the cancellation of the tender.
Through Ogetto Otachi and Company Advocates, NHIF successfully argued for the application to be thrown out, saying the UAP-led consortium used obsolete regulations hence losing its bid.
Obsolete law
According to the review board, UAP’s consortium that include ICEA and Sanlam insurances and a third consortium of Britam, CIC and Pioneer, used an obsolete law while tendering for the deal.
The insurer awarded the contract to the consortium of Jubilee, Madison and Gemenia insurances at Sh890,455,966 on February 12 after it emerged as the lowest evaluated bidder in the group life and last expense insurance cover for the over 400,000 civil servants. The rival consortium of UAP, ICEA and Sanlam insurances and consortium of Britam, CIC and Pioneerhad both quoted Sh970,359,691.33 prompting one of the losers to appeal for a review.
The review board found that whereas UAP and Britam consortium had purported to apply the guidelines of 2012, which have since been repealed, they did not adhere to them.
The replaced guidelines set rates of 5.5 per cent in every Sh1,000 for group life scheme and 7.7 per cent for every Sh1,000 for last expense schemes yet two two losers applied just one rate.
“The board finds that it’s questionable that both the applicant (UAP) and Britam consortium failed to apply the minimum rates of 7 per cent for last group expense scheme provided in the 2012 regulations,” ruled the board.
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