USAID is awarding an extension to existing USAID contract with Chemonics Intemational lnc, for the implementation of the Kenya Pharma Project. This action will extend the period of performance for approximately 15 months, from July 6, 2014 to September 30, 2015 with no change to the total estimated cost or scope of the contract.
The contract was awarded in February 2009, with an effective date of July 06, 2009 and an end date of July 05, 2014. It supports Kenya’s national pharmaceutical supply chain by purchasing commodities for distribution to Kenyan health facilities for the treatment of HIV/AIDS and opportunistic infections.
USAID intends to transfer most of its support for health commodities procurement to the Government of Kenya (GOK) through the Kenya Medical Supplies Authority (KEMSA), which is the Government of Kenya agency responsible for procurement, warehousing and distribution of medical supplies. The Mission has already started this transition under Host Country Contracting (HCC) and KEMSA Fixed Amount Reimbursement Agreement (FARA) Implementation Letters.
lt was envisioned that this transition would be completed in the early part of 2014. Due to delays, the transition to KEMSA will require more time than originally anticipated. Currently, Kenya government institutions, including KEMSA, are going through a transition in order to align themselves to the new Kenyan constitution. This may affect their operations in some cases in the short run, but it is expected that the system will stabilize in the medium term.
This contract extension will provide additional time required for a seamless transition of Kenya Pharma Project activities to KEMSA. In view of the above and the need to ensure that KEMSA is given adequate time to strengthen its systems, this request for an extension of the contract for the Kenya Pharma project will provide the necessary backup during this transitional period.
The Kenya Pharma contractor procures, warehouses, and distributes lifesaving antiretroviral drugs for about 400,000 people and opportunistic infection medicines for over 800,000 people. The proposed extension to this contract will ensure that the Kenyans currently receiving antiretroviral treatment will continue to receive their lifesaving medication without interruption as the Mission continues to put into place modalities for a seamless transition to K.EMSA. The Kenya Pharma contractor will continue the work that it has been doing, but with a gradual reduction in scale as KEMSA begins to assume more responsibilities for the activities implemented under the contract.
Under this award, the contractor was expected to procure, warehouse and distribute drugs, supplies and equipment over a period of five years (2009-2014) for a total estimated cost of $550,344,662, including related operational costs. However, the contractor is estimated to expend about $326 million by the end of the initial contract period in July 2014, thus there will remain approximately $224 million in ceiling left in the award. The current total obligated amount of the contract is $331,717,804. An additional obligation might become necessary during the contract extension period in an amount to be determined.
The fact that the contract is underspent for the period of performance is primarily due to the advent of generic manufacturers which drastically reduced the unit cost for anti-retroviral drugs. This cost savings has continued to accrue over the course of the contract resulting in a substantial savings to the project. Therefore, this action will extend the period of performance without an increase to the total estimated cost of the contract. The performance of the Kenya Pharma contractor has been excellent to date.