An insurance firm has gone to court to challenge the decision by the Public Procurement Administrative Review Board to cancel a medical insurance scheme awarded for police officers.
The Sh836 million scheme procured for civil servants, police and prison officers floated last year was cancelled last week, leaving thousands at risk.
CIC Life Assurance wants the court to bar the NHIF from awarding the tender to UAP Life Assurance pending hearing and determination of the suit. The board terminated the cover granted to two firms - Britam Life Assurance Company Limited and Pioneer Assurance Company - citing alleged irregularities in the awarding of the tender by the NHIF.
The PPARB further ordered the contract to be awarded to one of the losers - UAP Life Assurance - whose bid of Sh797,623,500 was the lowest, but which was not considered.
Britam Life Assurance Company and Pioneer Assurance Company beat nine other bidders for the lucrative tender to provide group life and last expense cover for the civil servants, police and prison staff for the financial year 2017-18.
In an urgent application filed at the Milimani High Court, CIC Life Assurance, whose bid was unsuccessful, said the board exceeded powers given to it by law and acted outside its jurisdiction by awarding the tender to UAP. CIC argues that since the entire process of awarding the tender was not done according to procurement and insurance regulatory rules, the contract should have been declared a nullity.
“Having found that the tender process was irregular and illegal, the board cannot award the tender to UAP Assurance since an illegality in law renders a contract and entire processes nullity,” the firm argues.
The firm says the board failed to take into consideration the fact that apart from the lowest bid, the procuring entity is under an obligation to consider all other aspects of the tender, including technical evaluation.