Evaluation of a Federal Healthcare Proposal

Scott Honiberg and Jeff Weinstein, for HealthLeaders Media, February 2, 2009

You've just submitted a multimillion-dollar proposal to provide healthcare services to a federal agency for five years that your team has been working on for months. Now what?

In the typical negotiated procurement, the agency will have one team reviewing technical elements and past performance, and another reviewing the price proposal. Every request for proposal will include a set of stated evaluation factors and/or subfactors. It is critical to address all of the stated factors as thoroughly as possible—even though you may think other factors are more important.

Lesson One: Agencies don't always include evaluation factors that an offeror might consider most important, and one of the most important lessons about federal contracting is to at least respond to what they ask for. Then—and only then—can you include what you think is really important. Ignoring something you think is irrelevant or relatively unimportant can be a fatal flaw. Evaluators will often have a checklist of each of the stated evaluation factors, and will begin to see whether, and to what extent, you addressed each of those.

All RFPs should indicate the relative importance of stated evaluation criteria, such as all technical factors are of equal importance; or all technical factors are listed in descending order of importance; or all technical factors, plus past performance, are significantly more important than price.

Lesson Two: While price is always important, many federal contracts for healthcare services are not awarded to the lowest bidder.

After initial review, the agency may find it has questions and needs to hold "discussions" with offerors. Discussions can be in person, by teleconference, or in writing, and are intended to give a company the chance to explain elements of its proposal that the government found unclear, incomplete, or deficient. Don't plan on the opportunity to discuss, though, as RFPs often state that the government reserves the right to award without discussions based on initial proposals alone. In that case, you need to ensure that your initial proposal is complete, clear, consistent, and thorough, and that your price is the best that you can offer.

Whether there are discussions or not, results of the technical and price evaluations ultimately go to a "source selection authority," who is often the contracting officer. The SSA then reviews the evaluations and selects the successful company. If the procurement is for services, as is the case for most healthcare contracts, the successful company almost always is the one that the SSA feels represents the "best value" to the government. This means that the government can award a contract to a company whose price is higher than its competitors if the government decides that the company's technical proposal is superior to the competition.

How does a company outshine the competition to be designated the "best value"? One of the most important elements is to carefully describe how you will best meet the government's requirements. That means not "parroting" the RFP language itself (you'd be surprised to learn exactly how many bids do just that), or simply stating that you can do whatever the agency needs. You need to explain in detail how you're going to do it, what resources you bring to the table, what experience your company has had in providing these services in the past, what innovative ways you've come up with to provide the services, and whether and how your company actually can exceed the government's requirements.

There are numerous areas in which a proposal can be found "deficient" or "downgraded." Complicating this issue is the all-too-frequent reality that evaluation of proposals does not always occur the way it is supposed to; i.e., in accordance with the Federal Acquisition Regulation.

In our next article, we'll discuss how an unsuccessful company can "protest" an agency's evaluation and/or award decision, if it believes the process has not been conducted properly.

Scott Honiberg is president and Jeff Weinstein is counsel at Potomac Health Associates, Inc. They can be reached at S.Honiberg@PHAInc.com or J.weinstein@PHAInc.com, respectively.
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