TPAs and employers and insurance companies send out requests for proposal – to each other, to managed care firms, specialty providers, voc companies, IT providers, law firms. All have been on the receiving end of a voluminous, detailed, structured and rigorous RFP – so big that it clogs their virtual and/or physical mailbox.
The erstwhile vendor is initially happy. Hey, we made the cut, we’re on the list, we ‘get’ to respond. We have an opportunity.
Then the work starts. Even if the vendor is big, and has staff to help write the responses, and even if it has a ready-made library of canned responses, it is still a lot of work. We aren’t talking a couple hours here and there by a junior staff writer – every question has to be reviewed and assigned, then the answer checked for accuracy, grammar, and consistency with other answers. Then someone has to find all the reports and IT flow documents and disaster recovery plans and professional certifications and insurance coverage documents and CVs and make sure they have the right appendix numbers and are in the right format. Then it has to be collated, checked one more time, signed by an executive, and shipped out. All on the prospect’s schedule.
And that’s if it’s a big vendor; if it is a small company, the folks who are doing this work are also the folks who are supposed to be doing the ‘real’ work – handling the tasks that actually deliver value to customers and owners alike.
The point is there is a lot of work involved, and most of the vendors who are doing the work are not going to get anything out of it – at least in terms of revenue. No, they’re going to have to savor the joys of a job well done, even if not done well enough to actually win the business.
I know, the ‘customer’ has also put a lot of work into the process – no argument there. Just understanding what it is you want, what restrictions exist, what the timeline should be and who should be involved in the process from initial specs to final decision means meetings on top of meetings.
But just for a minute think about it from the vendors’ perspective. We’ll take your perspective on tomorrow.
The erstwhile vendors want to deliver for your company, they think they can do a better job of anyone else, yet they’re forced to only answer what they’re asked, not allowed to demonstrate their abilities and insights and expertise and knowledge. Yes, they may be able to – in response to the “is there anything else we should know, or other ideas you have”. But the responses to these questions don’t fit the scoring methodology. Even if they are creative and innovative and fresh, and look promising, it’s tough for them to see the light of day in the typical RFP process.
Now comes the waiting…and the waiting…and the waiting…
Sure, there’s a deadline. But more often than not, the deadline comes and goes, unmarked by the award, or announcement of a potential award. Instead, there’s news that the prospect needs more time to review the proposals, or more information has come in, or…
At the risk of being accused of unfairness, ask yourself – how often has an RFP process ended when it was supposed to, with a decision made, vendor selected, and losers notified, according to the original timetable?
I’ll go out on a very solid limb and say the answer is ‘not very often’.
Let me suggest this. The more a prospective customer delays the decision, the less credibility it will have, and the less willing potential vendors will be when the next RFP comes out. Some decisions are seemingly never made, until the queries from once-hopeful vendors trickle away.
If and when the award is announced, those potential customers who are willing to have the tough conversation with losers – despite what their lawyers say – are doing the right thing. This is a small world, and treating losing vendors professionally is just the right thing to do. It will also make them better when next they respond to the ‘customer’s’ RFP.
It is also a recognition of the work invested by all vendors, not just the winner. It provides the losing vendor with valuable input and knowledge, and delivers at least some return on all that effort.
What does this mean for you?
Do unto others.
Apr
9
Are you thinking Florida? Sure sounds it.
Florida Department of Financial Services had to put out 5 RFP’s for case management service due to their own lack of understanding of what they were asking. One of the re-do’s was required after they released the competitive bid pricing information in the middle of the bid evaluation process and then asked vendors to resubmit the bids. When everyone saw what everyone else bid, the revised bid prices came in almost double.
I still don’t know if that contract ever got awarded.
Keeping with its track record of putting out well-designed RFP’s, Florida DFS has a current Invitation to Negotiate for a Medicare Set-Aside Program
(Advertisement Number: DFS RM ITN 08/09-12).
Addendum 1 is a blatant attempt to encourage the successful vendor to provide “aggressive advocacy for the lowest MSA cost that will satisfy CMS review.”
Now this might be not be exactly illegal, but it certainly encourages the successful vendor to do everything in its power to place Florida DFS’ interests above those of CMS and the Medicare program, contrary to CMS guidelines.
So who do you think the winning vendor will be? One of the companies that do the right thing in compiling accurate MSA’s or one of the vendors that advertise how much they can “save” the buyer with their low-ball MSA’s?
Who do you think will pay the legal bills when Florida DFS selects the “low cost vendor”, attorneys start the litigation, and CMS comes looking for its money from low-ball MSA’s?
Me? I just work here.
Whomever shared this example is exactly correct. The state is sharing as the author states “an aggressive advocacy for the lowest MSA cost that will satisfy CMS review”.
This is a bold example of the RFP creators lack of knowledge of what they are asking for. As a result of this, I can share what happens to the end user -the claimant/State of Florida worker who settles his or her case with a MSA.
I realize this is far off of the topic of RFP’s however, it is very relevant. I would like to share how correct your blog is and furthermore, how right on the respondent is to your blog.
As a professional administrator we end up “holding the bag of goods/MSA to work with. It is a result of everyone elses work, starting with the RFP.
As a result of the state’s lack of knowledge, and them allowing this team to put together the RFP, the State of Florida will chose a vendor out hundreds. The vendor who is so special and chosen as the “big” winner, will provide allocations at the lowest rate and attempt to get CMS to approve the MSA allocations. Once the approval occurs, the State of Florida will send the claimant off after settlement with a smaller MSA dollar amount than if done correctly which should have started with a properly thought out RFP. So in this example, the State of Florida wins. The claimant should still be ok theoretically, however, it defeats the initial purpose of the MSP statute, and that is:
Stop shifting the burden that is the State of Florida’s, back to Medicare. Then who loses out, all of us taxpayers who pay into the SS system and won’t be able to collect when we turn 65. Furthermore, let’s go back to your blog the other day in regard to Medical Bill Review-
The claimant is going to administer this MSA on their own (95% of all approved MSA’s go self adminisration) and they have no access to Medical Bill review. The MSA vendor who won the RFP bid is comprising the $$ amount to the State of Florida workers’ comp fee schedule. The claimant (ex State of Florida worker) is paying full rate for Medicare allowable services and supplies, as they don’t have access to the state fee schedule. Who loses then, all of us taxpayers- why, one might ask? Because they will spend the money quicker as a result of paying 100% on the dollar and the MSA will either go into temp exhaustion if funded via annuity and if funded with cash, will go into perm exhaustion. Once this happens the claimant uses their Medicare card for the duration of their life therefore, the burden is back on Medicare which is our money as well.
Sorry about the tangent here, this is a result of a poorly thought out and furthermore, put together RFP.
Your two blogs-bill review and RFP’s are great blogs when it comes down to it.