Managing an Effective Procurement Process at the State Level
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1 Managing an Effective Procurement Process Gerry Hinkley Pillsbury Winthrop Shaw Pittman LLP
2 Overview Mission, vision, governance and leadership Fitting procurement into the long-range HIE plan Establishing the time line The RFP structure and content The award Negotiating the contract 2 Managing an Effective Procurement Process
3 Mission, Vision, Governance and Leadership Set your goals early and reinforce them regularly Establish layers of governance and leadership that will be able to address and resolve issues appropriate to the layer Governing body understands the mission and vision, creates credibility, establishes benchmarks, understands internal controls Executive team able to implement and lead with appropriate skill sets Outside help IT consulting, legal finance Targeted teams Create internal mechanisms for resolving disputes/impasses The team for IT procurement should be broad-based: process administration, finance, IT expertise, risk management, legal 3 Managing an Effective Procurement Process
4 Fitting Procurement into the Long-Range HIE plan Establish a long-range plan that includes year by year increased goals for functionality Year s1 & 2 core user exchange functionality (messaging, inquiry, referrals, e- prescribing); eligibility; public health reporting; single sign-on Year 2 & 3 CPOE; retrieving public health data; quality reporting Years 4 & 5 clinical decision support Year by year goals for geographic expansion 4 Managing an Effective Procurement Process
5 Establishing the Time Line Preparing the RFP Bidder s intent receipt of RFP to attend the bidder s conference to submit a bid Written question submission Mandatory (or not) bidder s conference Plan for an addendum Proposals due Proposals evaluations Notification of finalists for demonstrations, site visits Product demonstrations and site visits Negotiate contract with two finalists Complete the contract 5 Managing an Effective Procurement Process
6 Establishing the Time Line (continued) Determine when you need the contract to be executed and work backwards -- Rules of thumb 60 days to prepare and vet the RFP 60 days to respond to the RFP after publication 30 days to respond to the RFP after addendum issued 30 days after receipt of responses to review 30 days to complete demonstrations and site visits 45 days to complete negotiations = 255 days or 8.5 months Allow 10 20% slippage on your end Don t count weeks with major holidays 6 Managing an Effective Procurement Process
7 The RFP Structure and Content of the RFP Anticipate the responses that you want to receive format for responses forms that will be easy to review and rate apples to apples Anticipate the scope of questions from vendors avoid jargon that may be something to you but might be confusing compare Q & As from other State s RFPs Vet the RFP with a representative audience Test the website and all links Make it easy to print out the entire document 7 Managing an Effective Procurement Process
8 Structure and Content of the RFP (continued) Background and overview Who you are and what are the vision and mission of the organization Rules of the proceedings Schedule of events Conferences Addenda Whom to contact When to submit License and maintenance agreement form Scoring and special points facilities located in the State diversity other special considerations 8 Managing an Effective Procurement Process
9 Structure and Content of RFP (continued) Preparing and Submitting Proposals Format, minimum typeface, mandatory forms (e.g. pricing sheets) Costs are the bidder s Number of hard and electronic copies Number sections so that bids can be compared side-by-side Mandatory provisions Optional provisions Page limits for specific sections Separate technical from cost components and seal the cost components Proprietary/trade secret information submitted under seal Understanding of the scope of work Response to license and services agreement item by item 9 Managing an Effective Procurement Process
10 Structure and Content of RFP (continued) Minimum functionality clinical messaging referrals clinical decision support eligibility and claims e-prescribing public health reporting and alerts master patient index Record locator service physician order entry personal health record consent management authentication single sign on 10 Managing an Effective Procurement Process
11 Structure and Content of RFP (continued) Business profile and organization Financial requirements Implementation capabilities and approach to implementation Training and documentation Product/vendor listing Support and maintenance Hosting Education/outreach Data standards compliance Privacy and security compliance 11 Managing an Effective Procurement Process
12 Structure and Content of the RFP (continued) Architecture and interoperability Interoperability and connection to disease, immunization databases Connection the NHIN, other state HIEs Data migration System integration services Implications for meaningful use demonstration Equipment Project Management Certifications Other services to be offered Time line and implementation schedule 12 Managing an Effective Procurement Process
13 Structure and Content of the RFP (continued) Implementation metrics project planning progress reporting quality risk management issue management Service levels Assistance with identifying funding sources Cost proposal Payment schedule Experience References 13 Managing an Effective Procurement Process
14 The Award To get to the finalists Functionality Achieving meaningful use Privacy/security Data standards Commitment to financial sustainability Support and maintenance Technical considerations Implementation capabilities Corporate capabilities Cost To get to two finalists maintain the competitive process Site visits Demonstrations To get to the finalist Negotiate the final license 14 Managing an Effective Procurement Process
15 Negotiating the Contract Prime contractor Contract term Payment terms and schedule Liquidated damages for delayed performance Performance bonds Termination for convenience Termination if funds not appropriated Assurances of non-obsolescence Indemnification Limitation of liability eliminated except consequential damages Statute of limitations 15 Managing an Effective Procurement Process
16 Takeaways Do not set unrealistic time-frames Maintain a competitive process as long as possible Time is leverage Do not allow end-runs and top-down communications Understand the market and the competitors Make site visits Pricing pay only for value delivered (avoid time and materials); payment based on milestones Have an acceptance period for each phase of deliverables Termination for convenience Periodic operational reviews Own your IP if you pay for it, you should own it 16 Managing an Effective Procurement Process
17 Resources - State Health Information Leadership Forum - State HIE Toolkit (State-Level HIE Consensus (SLHIE) Project and the AHIMA Foundation) - National Governors Association - Michigan Coalition for HIT ehealth Initiative Markle Connecting for Health HIMSS (listing of on-line resources) 17 Managing an Effective Procurement Process
18 This is a publication of the Health Care Industry Team of Pillsbury with a purpose to inform and comment upon recent developments in health law. It is not intended, nor should it be used, as a substitute for specific legal advice, as legal counsel may only be given in response to inquiries regarding particular situations. Copyright 2010, Pillsbury Winthrop Shaw Pittman LLP (reprints with attribution permitted) 18 Managing an Effective Procurement Process
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