Federal Health Claims Processing Services (FHCPS) Project

Table of Contents

1. Background and Introduction
2. Project Requirement
3. Attestation of Assurance
4. Objectives of the Fairness Monitor Assignment and Methodology
5. Fairness Monitor Specific Activities and Findings
6. Reference Documents

Background and Introduction

As Fairness Monitor, Knowles Consultancy Services Inc. and Hill International Inc. in Joint Venture (hereafter referred to as the Fairness Monitor) was engaged as a Fairness Monitor (FM) to observe the competitive procurement process for the acquisition of Federal Health Claims Processing Services (FHCPS) for Veterans Affairs Canada, Canadian Forces and Royal Canadian Mounted Police. This competitive process was undertaken by Public Works and Government Services Canada (PWGSC) through Solicitation Number 51019-07200/K. Knowles Consultancy Services Inc. and Hill International Inc. in Joint Venture is an independent third party with respect to this activity.

We reviewed all of the information provided and observed all relevant activities.

We hereby submit the Final Report covering our activities chronologically, from June 2011, through two Letters of Interest (LOI), two Requests for Information (RFIs), and draft Request for Proposals (RFPS) to the final RFP and the evaluation of proposals received in response to the RFP.

The report also summarizes our activities with a previous process for similar services which was cancelled prior to the release of an RFP.

This report includes our attestation of assurance, an overview of the project, the methodologies applied to our assignment, activities undertaken, and relevant findings.

Project Requirement

Canada has a requirement for Federal Health Claims Processing Services (FHCPS) which includes providing services and systems for the processing and settlement of health claims and ensuring compliance with applicable program policies including audit, reporting and financial control practices used by various departments of the federal government. The partner departments involved in this solicitation are Veterans Affairs Canada, Canadian Forces and Royal Canadian Mounted Police.  Included in the solicitation is the right of Canada to extend the provisions of the resulting contract to additional health care plans and programs of other departments and programs of the federal government, under conditions specified in the contract for FHCPS.

The benefit and services available for the three partner Departments are consolidated under Programs of Choice. FHCPS will be used to administer the Programs of Choice listed below:

1. Aids to Daily Living
2. Ambulance including health related travel
3. Audio Services
4. Dental Services
5. Hospital Services
6. Medical Services
7. Medical Supplies
8. Nursing Services
9. Oxygen Therapy
10. Prescription Drugs
11. Prosthetics and Orthotics
12. Related Health Services
13. Special Equipment
14. Vision Care
15. Veterans Independence Program (VAC only)
16. Long Term Care (VAC only)

Processing services include:

1. client registration and generation of the applicable level of eligibility;
2. multi channel communications for members/clients, providers and staff;
3. provider registration, provider relations and provider audit services;
4. treatment authorization services including special authorization services for pharmacy services, dental pre-determination requests and authorization requests for other medical services and benefits;
5. manual and electronic claims processing including claims capture, claims tracking, claims adjudication, claims payment and production and distribution of claims statements;
6. pharmacy services for electronic adjudication and processing of benefits;
7. drug utilization evaluation services;
8. financial operations encompassing financial practices to request, reconcile and process claims payment and recovery amounts;
9. quality assurance and performance reporting;
10. system design, development, testing and implementation; and
11. business services including auditing, planning, change management, training, system maintenance and management, reporting and records retention.

Attestation of Assurance

The FM hereby provides the following unqualified assurance statement concerning the competitive process for the Federal Health Claims Processing Services procurement:

It is our professional opinion that the procurement process we observed was carried out in compliance with the relevant solicitation documentation, and the process was conducted in a fair, open, competitive and transparent manner.

Note: While in the course of the process fairness related comments were provided to project officials, it is confirmed that, as necessary, project officials provided clarification to the FM or took appropriate action to address the comments, and as a result no fairness deficiencies were recorded. 

Objectives of the Fairness Monitor Assignment and Methodology

The overall objective was as follows: provide PWGSC with independent observation of project procurement activities; provide fairness related comments to project officials as early as possible so that appropriate action could be taken to resolve the concerns before fairness was impacted; bring any potential fairness concerns to the attention of the Operational Integrity Sector if there is no timely resolution with project officials; and attest to the fairness of the procurement process, including its execution.

To accomplish the objective we undertook the following activities and, where applicable, provided fairness related comments to the Contracting Authority:

• became familiar with the project governance structure;
• reviewed all LOIs, RFIs, and RFP in draft and final form;
• reviewed all amendments to the LOIs, RFIs and RFP including questions submitted by proponents and answers provided;
• observed Industry Days, One-on-One Meetings with interested vendors, and the Bidders’ Conference;
• reviewed submissions from interested vendors;
• reviewed the procedures to be used for the evaluation of responses and the guidance provided to the evaluation team;
• observed the evaluation of responses to the RFP to ensure that the specified evaluation and selection procedures and departmental policy were followed and consistently applied during the evaluation and selection process; and
• observed the debriefing of bidders. (This activity will be reported on in an addendum to this report after any debriefings.)

Fairness Monitor Specific Activities and Findings

Fairness Monitor Activities and Findings related to Earlier FHCPS Procurement Process - December 2007 to March 1, 2011

An earlier procurement process for FHCPS was cancelled on March 1, 2011 because of significant changes to the procurement requirements of Veterans Affairs Canada. During this earlier process starting in December 2007, we reviewed project background and governance information, discussed with the Contracting Authority the requirements, the way ahead and issues, reviewed drafts and final versions of three Requests for Information (RFI) and various draft parts of a Request for Proposal (RFP), reviewed submissions received from interested suppliers resulting from the RFIs, and observed One-on-One sessions between the project team and interested suppliers. We also reviewed draft and final versions of Notices of Proposed Procurement (NPP) posted on MERX, one on October 16, 2010, advising of a delay in the process and the second on March 1, 2011 advising that the procurement process was cancelled. Fairness related comments were provided to the Contracting Authority throughout the cancelled procurement process and appropriate action was taken.

Fairness Monitor Activities and Findings during the Letter of Interest (LOI) and Request for Information (RFI) Phase

On May 19, 2011 we reviewed a draft of the NPP and on June 3, 2011 we reviewed the posted version of the NPP (Document 1) announcing an Industry Day. On June 24, 2011 we reviewed the proposed presentation planned for the Industry Day. On June 29, 2011 we observed the Industry Day during which Veterans Affairs Canada (VAC) briefed on the transformation plans of VAC, new directions for the FHCPS project and the way ahead.  During the period September 15, 2011 to September 21, 2011, we reviewed an LOI in draft and final versions (Document 2) providing the presentations from the June 29, 2011 Industry Day and an update on the way ahead. Fairness related comments were provided to the Contracting Authority throughout this industry consultation process and appropriate action was taken. 

During the period December 2, 2011 to February 12, 2012, we reviewed draft documents, monitored teleconferences on the way ahead and planning for another Industry Day, and reviewed an RFI in draft and final form (Document 3). On February 14 and 15, 2012 we observed an Industry Day and follow-on One-on-One Meetings with interested suppliers. During the period May 22, 2012 to May 30, 2012, we reviewed the LOI (Document 4) that provided the presentations, questions and answers from the Industry Day and subsequent meetings. Fairness related comments were provided to the Contracting Authority throughout this industry consultation process and appropriate action was taken. 

On June 26, 2012 we reviewed the RFI that was published on MERX on June 27, 2012 (Document 5) and on June 26 and July 9, 2012 we reviewed the draft Statement of Work (SOW) that was attached to the RFI.  During the period August 7 to 15, 2012, we reviewed the responses received from the RFI and the VAC summary of those responses. No fairness deficiencies were identified.

During the period August 16, 2012 to November 26, 2012, we discussed the way ahead with the Contracting Authority and monitored teleconferences with project officials concerning proposed changes to draft parts of the RFP. Fairness related comments were provided to the Contracting Authority and appropriate action was taken. 

During the period December 12, 2012 to January 15, 2013, we reviewed the draft RFP and provided fairness related comments to the Contracting Authority and appropriate action was taken.

Fairness Monitor Activities and Findings during the RFP Posting Period

On January 25, 2013 we conducted a preliminary review of the RFP that had been posted on MERX on January 24, 2013 (Document 6) and on February 12 and 13, 2013 we conducted a detailed review of the RFP. Fairness related comments were provided to the Contracting Authority and appropriate action was taken.  On February 24, 2013 we reviewed the proposed agenda for the Bidders’ Conference and on February 26, 2013 we observed the Bidders’ Conference. Fairness related comments were provided to the Contracting Authority and appropriate action was taken. 

During the period March 12, 2013 to May 3, 2013, we reviewed Amendments 1 to 6 to the RFP (Documents 7 to 12) in draft and final form.  Fairness related comments were provided to the Contracting Authority and appropriate action was taken. 

The RFP closed on May 14, 2013 .

Fairness Monitor Activities and Findings related to the Evaluation

During the period April 29, 2013 to May 23, 2013, we reviewed draft versions of the Evaluation Plan, participated in teleconference calls and had discussions with the Contracting Authority related to its development and finalization. Fairness related comments were provided to the Contracting Authority and appropriate action was taken.

On June 7, 2013 we monitored an Evaluation Team teleconference during which consensus was reached on Mandatory Requirements compliance. One Proposal complied with all Mandatory Requirements. No fairness deficiencies were identified. 

On June 13, 2013 and 26, 2013, we monitored scheduled teleconference calls of the Evaluation Team which were limited to checking progress of each evaluator on evaluations of Rated Requirements for scheduling purposes. There was no discussion of evaluation results.

During the period July 2, 2013 to July 5, 2013, we observed the discussions by the Evaluation Team of all Rated Requirements of the Proposal that had met Mandatory Requirements at which consensus scores were agreed.  We also reviewed a clarification question forwarded to the Bidder and the response received. All mandatory minimum scores were achieved. Fairness related comments were provided to the Contracting Authority and appropriate action was taken.

On July 10, 013, we were briefed by telephone by the Contracting Authority on the results of the evaluation of the Financial Proposal that had met Mandatory Requirements. The Financial Proposal was compliant and had been double-checked for compliance by a colleague. As there was only one compliant proposal, there was no need to apply the basis of selection process.

Reference Documents

The following documents are referenced by number in this report.  Unless otherwise indicated, these documents are available through the FHCPS project office. Only documents published subsequent to the restart of the FHCPS procurement process in June 2011 are listed since any documents published earlier are not relevant.

Table Summary

The following table includes a list of documents referred to in the report such as the Request for Proposal (RFP), amendments, clarification letters, debriefing letters, etc. Each row is numbered, followed by the document title, then a document identifier such as a date or document number.

Reference Documents

No.	Document	Additional information
1	Notice of Proposed Procurement (NPP)	Published on MERX June 3, 2011
2	Letter of Interest (LOI)	Published on MERX September 21, 2011
3	Request for Information  (RFI)	Published on MERX February 2, 2012
4	Letter of Interest (LOI)	Published on MERX May 30, 2012
5	Request for Information (RFI)	Published on MERX June 27, 2012
6	Request for Proposal (RFP)  with Attachment 1	Published on MERX on January 24, 2013
7	Amendment 1 to RFP	Published on MERX on March 12, 2013
8	Amendment 2 to RFP	Published on MERX on March 14, 2013
9	Amendment 3 to RFP with Attachment 2	Published on MERX on March 26, 2013
10	Amendment 4 to RFP	Published on MERX on April 11, 2013
11	Amendment 5 to RFP	Published on MERX on April 23, 2013
12	Amendment 6 to RFP with Attachment 3	Published on MERX on May 3, 2013

Addendum to the final report
February 10, 2014

Addendum to Fairness Monitor Contractor's Final Report dated July 12, 2013 concerning the Federal Health Claims Processing Services Project

This Addendum to the Fairness Monitor Contractor’s Final Report covers the period following the conclusion of the evaluation phase and includes contract award and debriefings of a bidder.

A contract was awarded to the successful bidder on January 6, 2014. On January 13, 2014 we reviewed the letter forwarded to the unsuccessful bidder. The letter explained why the bidder’s proposal was not accepted and invited the bidder to request a detailed debriefing.  On February 6, 2014 we were informed by project officials that no request had been received. No fairness deficiencies were identified.

Fairness Monitor Attestation of Assurance

It is the opinion of the Fairness Monitor that the post evaluation activities, including the written debriefing, for the Federal Health Claims Processing Services procurement project were carried out in a fair manner. In this context, fairness is defined as decisions made objectively, free from personal favouritism and political influence, and encompasses the elements of openness, competitiveness, transparency and compliance.

Amendment to Addendum to the final report
May 19, 2014

Amendment to Addendum dated February 10, 2014 to Fairness Monitor Contractor’s Final Report dated July 12, 2013 concerning the Federal Health Claims Processing Services Project

The Addendum to the Final Report dated February 10, 2014 noted that some three weeks after being notified of the results of the FHCPS competitive procurement, none of the Bidders had requested a verbal debriefing. As the RFP had asked that any verbal debriefings be requested within 15 days of being notified of the results, no verbal debriefings were anticipated.

In early May 2014 both Bidders requested verbal debriefings and the Contracting Authority agreed to provide them. On May 14, 2014 and on May 15, 2014, the Fairness Monitor monitored the debriefings of the two Bidders.  Best debriefing practices were followed and no fairness deficiencies were identified. 

Fairness Monitor Attestation of Assurance

It is the opinion of the Fairness Monitor that the post evaluation activities, including the written debriefings and verbal debriefings, for the Federal Health Claims Processing Services procurement project were carried out in a fair manner. In this context, fairness is defined as decisions made objectively, free from personal favouritism and political influence, and encompasses the elements of openness, competitiveness, transparency, integrity and accountability.