TSC on the Spot Over Medical Insurance Tender Rigging Claims in Favor of Minet

The Teachers Service Commission (TSC) is on spot over rigging claims in the teachers' medical scheme for the year 2022-2025 financial year in favor of Minet Insurance Kenya, which has been providing services since 2019.

Busia Senator Okiya Omtatah has claimed that the mandatory requirements in the tender advertised by TSC were unreasonable and skewed to ensure Minet Insurance wins the tender.

Omtatah pointed out that in all the eight mandatory requirements for Medical Insurance Providers, insurance brokers and insurance companies its only Minet that can meet the requirements in the market.

"I am concerned that, at the expense of the affected teachers and the public interest, some of the mandatory requirements outlined in the tender, are not just oppressive and unreasonable, they clearly demonstrate the tender is rigged," said the Busia Senator.

The three-year tender from 2022-2025 is expected to rise to approximately Sh50 billion from the current Sh35.2 billion following the planned hiring of 116,000 teachers for the next two years.

The Busia Senator has demanded for the immediate cancellation of the tender stating that the procurement irregularities have rendered the process illegal and unconstitutional failure to which he will seek legal redress.

"I shall make a formal complaint and demand an intervention by law enforcement and the relevant government agencies, including Ethics and Anti-Corruption Commission, Public Procurement Regulatory Authority, Parliament and above all legal redress in the High Court of Kenya," said Omtatah.

One of the mandatory requirements for the tender states that the lead consortium for the tender must provide tender security of Sh300 million which is higher than the statutory capital required at Sh250 million.

In the previous tender which was advertised in 2019, the tender security was capped at Sh180 million for insurance companies.

The Busia Senator has also raised questions on the Medical Insurance providers being required to have a gross premium (the money that is paid by any person or company/business for availing of an insurance policy) of Sh5 billion in the year 2021.

Omtatah has revealed that in the Medical Insurance Provider in the country only Minet can meet the requirement in a tender document which points to an attempt to lock out equally competent suppliers.

"Although a procuring entity has the right to set its own minimum standards for potential bidders, both the constitution and the Kenya's public procurement laws doesn't allow public officials to collude with potential bidders," he stated.

"Since the law protects the public from corporate capture, government institutions must provide an environment where the public can get value for money."

The tender documents have issued a mandatory requirement that the service providers interested in the medical scheme tender must have a membership of not less than 500,000 members.

With the entire insurance industry comprising 900,000 of which half are teachers, Omtatah termed the requirement as an attempt to stifle competition and by so doing denying the affected teachers by benefits of competitive bidding.

"With a pre-determined winner already in place i.e the incumbent, the affected teachers are being cheated by being forced to consume only one product. Any other bidder attempting to compete will simply be playing the role of a flower girl, sanitizing the illegality and nothing else," he stated.