Memo to File



|Contract # 03812 |Medical Diagnostic Testing Services |Melissa Cox |

|Contract Type: New Rebid Replacement WSCA Enterprise General Use |

|Restricted to:_____________ |

|Contract Duration: Initial Term: 2 years months Maximum life: 6 Years & Date: 10/31/2018 |

|Estimated Term Worth: $2,000,000 Estimated Annual Worth: $1,000,000 |

|Number of: Bidders notified: 277 MWBE’s notified: 10 Bids received: 3 Bids Rejected: 0 |

| WEBS was used to notify bidders |

|List the WEBS (not PCMS) commodity Codes were used? 952-07, 193-48, 961-48, 948-55 |

|MWBE Goal: 1 % MWBE Award: WBE% 1% MBE% 1% |

|Executive Summary: |This is a rebid of current Contract 07905 Lab Specimen Testing Services. This Contract provides for statewide specimen pickup, |

| |testing and reporting of medical lab results to correctional facilities, mental health facilities and other healthcare facilities for |

| |use in diagnosis of medical conditions. The current contract with Quest Diagnostics has been extended the maximum years allowable and |

| |will expire on October 31, 2012. The Dept of Corrections is the largest contract customer, representing almost 80% of the total spend.|

| | |

| |This Contract is structured to allow for a core list of tests at a fixed price and 75% off of list price for all additional tests. |

| |The contract also allows for an annual refresh of the core list as demand for certain tests or panels of tests change. Review of |

| |previous purchasing data confirms that approximately 97% of all tests performed for DOC are on the core list of tests. |

|Bid Development |

|Stakeholder work |Two stakeholder workgroups were initially held in the Spring of 2011 to discuss issues with the current contract and to brainstorm |

|[pic] |ideas for changes to incorporate in the new bid. The stakeholder group consisted of employees from DOC and DSHS to include: Dr. Lara|

|[pic] |Strick (DOC Infectious Disease Program Manager), Beth Goupillion (DOC Medicaid Manager), Sook Hee Yang (DSHS Lab Tech), and Cynthia |

| |Ray-Anderson (DOC Program Specialist). The notes from the stakeholder meetings are imbedded to the left. Please see the Bid |

| |Development section below for more information regarding stakeholder work. |

| | |

|Market Research: |Internet research was conducted to see how other states were contracting for lab testing services. Through this research, it was |

|See notes from stakeholder |determined that most states do not have a statewide contract for this specific type of service. Most of the contracts I was able to |

|meetings above. |find are for a specific agency or higher education facility. |

| | |

| |Please see the file embedded under the savings section for the spend analysis performed for this rebid. |

|EPP Strategy: |Not applicable to this service. |

|(See EPP Guidance) | |

| | |

|Supplier Diversity Strategy: |Diversity Strategy and Outreach Efforts |

|(See OSP Supplier Diversity |Is Certification language provided “Up Front” in the solicitation? |

|Plan) |Did you include OMWBE in sourcing team? OMWBE was notified of this bidding opportunity via quarterly stakeholder meetings with DES. |

| |Did you identify and remove barriers on this procurement? |

| |Is a diversity plan included as part of the bid response prior to award (if certified firms are subcontractors) |

| |Does this procurement offer second tier opportunities and reporting |

| |Did you encourage subcontracting efforts at the Prebid Conference? |

|Best Value Strategy: | |

|Bid Development: |As part of the bid development process, the previous solicitation was sent to the stakeholders for review and input to determine what |

| |changes were required. The results of this review did not result in any significant changes to the bid document, other than |

|[pic] |utilization of an updated bid template. |

| | |

| |A lengthy stakeholder discussion occurred regarding a regional award strategy for this contract. Due to the fact that Dr. Strick |

| |oversees the operations for all DOC facilities, it was determined that a regional award would not work for this solicitation, as Dr. |

| |Strick would need to have access to all DOC results within the same reporting system due to the fact that inmates change facilities, |

| |are transferred, etc. |

| | |

| |The biggest change to the document occurred with the evaluation and award section, the previous bid did not clearly spell out how the |

| |bid would be evaluated and awarded. Luckily, during the previous solicitation only one bid was received, so this was not an issue. |

| |The new bid established a 70/30 split between cost and non-cost factors based on stakeholder input and included a standalone appendix |

| |that required vendors to submit responses to both scored and pass/fail questions. Stakeholder input helped to refine and clarify |

| |current specifications, as well as define the core list of tests to be used for the price sheet. |

| Peer Review |The bid document was reviewed by Connie Stacey and Cheral Jones. |

|Fee Structure | Due to the fact that the primary users are state agencies, this contract will be managed as a PAF fee contract. |

|Bid Process |

|Pre-Bid Conference: |A pre-bid conference was held at DES Headquarters on July 11, 2012. Attendance at the pre-bid was a mandatory component of the |

|Date: July 11, 2012 |solicitation process. Representatives from Schryver Medical, Quest Diagnostics, and Interpath Laboratories attended the conference. |

| |In addition, Dr. Lara Strick from DOC attended to provide answers to several technical questions that came up. |

|[pic] | |

|[pic] |The pre-bid conference went very well, with several of the questions focusing on the technical requirements. It was very helpful |

| |having Dr. Strick at the meeting, as most of the bidder questions were very specific and technical in nature. Amendment No. 2 was |

| |issued on July 12, 2012 to address the bidder’s questions posed at the pre-bid conference. |

|Amendments: |Amendment Overview |

|7-02-12 | |

|[pic] |Amendment No. 1 was issued on 7-02-12 to correct an error with an imbedded file for Appendix A. |

|[pic] |Amendment No. 2 was issued on 7-12-12 to address bidder’s questions posed at the Pre-Bid Conference on 7-11-12 |

|[pic] |Amendment No. 3 was issued on 7-24-12 to revise some of the pricing language listed in Section 6 of Appendix B Special Terms and |

|[pic] |Conditions. |

|[pic] |Amendment No. 4 was issued on 7-26-12 to extend the bid closing date to 8-01-12. |

| |Amendment No. 5 was issued to revise Appendix D Price Sheet Submittal to add 20 additional tests. As a result, Appendix D was |

| |replaced in its entirety with a new price sheet. |

|Bid Evaluation—Responsiveness |

|Bid Opening: |The original bid closing date was moved from 7-26-12 to 8-01-12 to provide bidders with additional time to prepare pricing due to the |

|Date: 8/01/2012 |addition of 20 more tests to the price sheet (Appendix D). All three bidders in attendance at the Pre-Bid Conference submitted bids, |

| |as follows: |

|[pic] | |

| |Interpath Laboratory, Inc. |

| |Schryver Medical Sales & Marketing |

| |Quest Diagnostics, Inc. |

|Bids Sealed & Signed? |All bids were received sealed and signed, with the exception of Quest Diagnostics, Inc. Although Quest’s bid was received sealed with|

| |all amendments signed, they had not included the signature page with their submittal. |

|[pic] | |

|[pic] |After seeking clarification from Farrell Presnell, it was determined that the signed amendments were sufficient evidence of their |

| |intent to be bound by the terms and conditions of the contract. Farrell recommended sending a follow-up email asking them to confirm |

| |their intentions. Bruce Farley from Quest responded with a confirmation of their intentions, along with a signed signature page. |

| |Please see embedded files for documentation. |

|Received all required |The following submittals were a requirement of the solicitation. All vendors submitted the required documents with their bid |

|submittals? |submittals, with the exception of Quest Diagnostics, as described in the section above. |

| | |

| |Submittal Checklist |

| | |

| |SCORING: |

| |Schryver |

| |Medical |

| |Interpath Laboratory |

| |Quest |

| |Diagnostics |

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| |PASS / FAIL SUBMITTALS: |

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| |Part Two- Contract Information (full copy): |

| |Also Complete |

| |Authorized Offer and Contract Signature Page |

| |Pass / Fail |

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| | |

| |See section |

| |above |

| | |

| |Amendments (if any): |

| |Refer to and comply with any additional instructions as required in the amendment. |

| |Pass / Fail |

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| |Bidder Profile (Appendix E) |

| |Includes References |

| |Pass/Fail |

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| |Published Price List (Section 6.1.2) |

| |Pass/Fail |

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| |Bidder moves forward? Yes or No |

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| |Yes |

| |Yes |

| |Yes |

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| |NON-COST SUBMITTALS (Appendix F) |

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| |Service Capabilities |

| |75 max |

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| |Customer Service |

| |75 max |

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| |Quality Management |

| |75max |

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| |Reporting Capabilities |

| |50 max |

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| |Qualifications and Experience |

| |25 max |

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| |Test Request Form |

| |Pass/Fail |

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| |Retention of Clinical Records |

| |Pass/Fail |

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| |Tests Exceeding 24 Hour Results |

| |Pass/Fail |

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| |Phlebotomy Services |

| |Pass/Fail |

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| |Notification of Critical Lab Values |

| |Pass/Fail |

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| |Contract Transition Plan |

| |Pass/Fail |

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| |Serum Testing for TB |

| |Optional |

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| |Non-Cost Points Total: |

| |300 max |

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| |Price Sheet Total: (determined by formula) |

| |700 max |

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| |EVALUATION TOTAL: |

| |1000 max |

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|Specification compliance? |By submitting a signed bid, all bidders have agreed that they can meet all of the service requirements detailed in Appendix C Testing |

| |and Service Requirements. The Apparent Successful Bidder has agreed to provide a demonstration of their reporting/system capabilities|

| |to DOC staff on August 31st. Due to the fact that this is a contract for services, it is difficult to determine actual compliance |

| |with specifications at this time. |

|Price Sheet compliance? |Bidders were required to offer their best pricing for all tests listed on the Price Sheet Submittal Appendix D. Tests listed on the |

|[pic] |price sheet were tests that the state currently uses or anticipates usage under the resulting Contract. This list represents |

|[pic] |approximately 97% of the tests performed by DOC. If a Bidder did not perform a listed test, Bidder was to offer a price for a test |

|[pic] |which produced similar results. Failure to indicate a price for any item listed on the price sheet was grounds for bid rejection. |

| |CPT codes were also required for all tests on the price sheet and any other tests offered in accordance with CMA rules and |

| |regulations. |

| |All vendors submitted price sheets in compliance with the solicitation requirements. An electronic copy of all three price sheet |

| |submittals is embedded to the left. |

|Bid Evaluation—Responsibility |

|Past Performance |A reference questionnaire was sent electronically to the three companies listed in the Bidder Profile for Interpath Laboratory, the |

| |Apparent Successful Bidder. I have not received a response from any of the references to-date. I will be following up with Judy |

| |Kennedy, the authorized representative regarding this issue before an Intent to Award is sent out. |

|Qualifications |Per Appendix C, Bidders were required to comply with all state and federal requirements governing medical test site facilities, to |

| |include Chapter 70.42 RCW, Chapter 246-338 WAC, and 42 CFR Part 493. |

| | |

| |In addition, Bidder was required to provide a response to the following as part of the non-cost evaluation process and was scored |

| |accordingly. |

| | |

| |“Bidder to describe their firm’s experience and qualifications that detail their ability to perform the requirements of this Contract,|

| |to include the following: years of operation; number of employees; qualifications of employees; and employees’ years of experience.” |

|OMWBE Evaluation: |None of the bids received were from certified firms. |

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|Bid Evaluation—Scoring |

|Evaluation: |All responses were deemed responsive and therefore passed Phase One of the evaluation process. For Phase Two of the evaluation, the |

|[pic] |following procedure was followed: |

|[pic] |SCORING OF PRICE SHEET SUBMITTAL |

|[pic] |The Price Sheet Submittal (Appendix D) was be evaluated to verify that all pricing cells had been completed and to verify that the |

| |extended totals per line item were correct. This was achieved by inputting unit pricing for each bidder into the bid tabulation |

| |spreadsheet. The extended totals for each line item were then added together to arrive at a grand total. None of the bidders |

| |submitted a prompt payment discount. |

| |There were no required preferences or penalties to be applied. |

| |The Bidder with the lowest total evaluation price received 700 points. Those Bids with a higher evaluation price received a |

| |proportionately fewer number of evaluation points based upon the lowest Bid, using the following formula: |

| |Lowest price sheet total evaluation cost divided by a higher total price sheet evaluation cost, multiplied by number of available |

| |points equals the cost factor evaluation points. Points were rounded to three places to the right of the decimal point using standard|

| |rounding method. |

| |The results of the scoring were as follows: |

| | |

| |Max Points |

| |Interpath |

| |Quest |

| |Schryver |

| | |

| | Price Sheet Totals |

| |  |

| | $ 752,882.99 |

| | $ 802,575.70 |

| | $1,044,578.64 |

| | |

| |Points Allocated |

| |700 |

| |700 |

| |656.658 |

| |504.527 |

| | |

| | |

| |SCORING OF NON-COST SUBMITTALS |

| |The sourcing team met on August 9th at DOC Headquarters to evaluate the non-cost submittals. Some of the non-cost submittals in |

| |Appendix F were scored, while others were a pass/fail. Each committee member scored the applicable non-cost submittals as follows: |

| |All of the committee members’ scores for each submittal were added together and then divided by the number of members to arrive at a |

| |total score for the submittal. Totals were rounded to two places to the right of the decimal point using standard rounding. When all |

| |Submittals had been scored, the scores will be added together to form a total non-cost score for each Bidder. |

| |The pass/fail submittals were scored individually and then discussed as a group to come to a consensus as to whether each submittal |

| |was a pass or fail. It was determined that all bidders would receive a passing score on the non-scored submittals. The evaluators’ |

| |instructions and the evaluation sheets are embedded as PDF files to the left. |

| |ALLOCATION OF POINTS |

| |The non-cost score for each bidder was added to the price sheet score to form an evaluation total score as illustrated in the |

| |evaluation table below. |

| | |

| |Solicitation 03812 |

| |Max Points |

| |Interpath |

| |Quest |

| |Schryver |

| | |

| |  |

| |  |

| |  |

| |  |

| |  |

| | |

| |Price Sheets |

| |700 |

| |700 |

| |656.658 |

| |504.527 |

| | |

| |Non-Cost Submittals |

| |  |

| |  |

| |  |

| |  |

| | |

| |Service Capabilities |

| |75 |

| |64.33 |

| |50 |

| |50 |

| | |

| |Customer Service |

| |75 |

| |66.67 |

| |55 |

| |48.33 |

| | |

| |Quality Management |

| |75 |

| |68.33 |

| |61.67 |

| |61.67 |

| | |

| |Reporting Capabilities |

| |50 |

| |43.33 |

| |40 |

| |33.33 |

| | |

| |Qualifications and Experience |

| |25 |

| |21.67 |

| |21.67 |

| |15 |

| | |

| |Sub Total |

| |300 |

| |264.33 |

| |228.33 |

| |208.33 |

| | |

| |Test Request Form |

| |pass/fail |

| |pass |

| |pass |

| |pass |

| | |

| |Retention of Clinical Records |

| |pass/fail |

| |pass |

| |pass |

| |pass |

| | |

| |Tests Exceeding 24 hours |

| |pass/fail |

| |pass |

| |pass |

| |pass |

| | |

| |Phlebotomy Services |

| |pass/fail |

| |pass |

| |pass |

| |pass |

| | |

| |Notification of Critical Lab Values |

| |pass/fail |

| |pass |

| |pass |

| |pass |

| | |

| |Contract Transition Plan |

| |pass/fail |

| |pass |

| |pass |

| |pass |

| | |

| |Serum Testing for TB |

| |pass/fail |

| |pass |

| |pass |

| |pass |

| | |

| |Stat Labs |

| |pass/fail |

| |pass |

| |pass |

| |pass |

| | |

| |Sub Total |

| |1000 |

| |964.33 |

| |884.992 |

| |712.857 |

| | |

| |Prompt Payment Discount |

| |  |

| |0 |

| |0 |

| |0 |

| | |

| |Grand Total |

| |  |

| |964.33 |

| |884.99 |

| |712.86 |

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|Results & Recommendation |

|Savings: |A significant amount of time was spent to determine if an award to the Apparent Successful Bidder (Interpath Laboratories) would |

|[pic] |actually provide for any cost savings to the state because there were some concerns that since Interpath was only offering 25% off |

|[pic] |list price for “non-core” tests, versus a 75% offering from Quest on the current contract, the overall cost to the state would be |

| |higher. |

| | |

| |A comparison was done on all DOC tests performed during a rolling 12 month period to determine if any cost savings could be achieved. |

| |The results of the analysis showed that the state would only be paying about $3500 more for the “non-core tests”, while they would be |

| |achieving $12,500 savings annually on the core items for a net totals savings of $9,000 over the current contract. |

| | |

| |Although the difference in the percentage discount between the 2 vendors is 50%, the explanation for the low cost variance on |

| |“non-core” items can be found in the fact that the list price for specific tests varies widely between the two vendors. Many of the |

| |tests offered at list price by Interpath were significantly cheaper than Quest’s list price. The table below provides for a breakdown|

| |of DOC tests performed in a 12 month rolling period. |

| | |

| | |

| | |

| |Tests Performed |

| |Current Contract (Quest) |

| |Apparent Successful Bidder |

| |(Interpath) |

| | |

| |Core Tests |

| |114,162 |

| |$ 787,317 |

| |$ 774,622 |

| | |

| |Non-Core Tests (List Price-%) |

| |1,850 |

| |$ 44,039 |

| |$ 47,321 |

| | |

| |Totals |

| |116,012 |

| |$ 831,356 |

| |$821,943 |

| | |

| | |

| |Please note that this analysis was difficult to perform because an “apples to apples” comparison was not possible for all of the tests|

| |due to the fact that doctors often order the tests in customized panels. Whenever a comparison could not be made, the same test price|

| |for both vendors was inserted on the spreadsheet to keep the playing field equal. |

|Recommendation: |Per RCW 43.19.1911, As the responsive, responsible bidder with the highest evaluated point total, I am recommending that an award be |

| |made to Interpath Laboratory under Solicitation 03812. |

| | |

| |Upon supervisory review and approval of my evaluation and recommendation, I will notify Interpath that they are the apparent |

| |successful bidder by issuing an “intent to award” and pursue negotiations to see if their bid can be improved by increasing their |

| |percentage off of list price for “non-core” tests. |

|Award Activities |

|Implementation Plan |As part of the solicitation process, bidders were required to provide a contract transition plan with their bid submittal. |

|WEBS | Notify bidders of the award via WEBS |

| |Once contract award has been finalized, archive bid in WEBS |

|Communication | Send rejection letter to those bidders to disqualified bidders |

| |Rejection Letters |

| |All bidders were deemed responsive and therefore no rejection letters were required. |

| |Send apparent successful bidder announcement letter |

| |Send Award Announcement letters to all bidders |

| |Email UM a brief award announcement for Bi-Weekly Broadcast |

| |Provided Debriefing to: _ _____________________________________ |

|Contract | Model Contract updated to reflect Bid Amendment language |

|PCMS | Populate PCMS Info Tab |

| |Complete PCMS Expanded Description Tab |

| |Add Web remark in the PCMS Remarks Tab announcing the award of the contract |

| |Add at least 5-FAQ remarks in the PCMS Remarks Tab |

| |Complete PCMS Internet Tab to include relevant search terms |

| |Complete PCMS Commodities Tab |

| |Complete PCMS Vendors Tab |

| |Complete PCMS Customer Tab |

| |Complete PCMS Fees Tab |

| |Complete PCMS WBE/MBE Percents |

| |Include relevant search terms in the PCMS Internet Tab |

| |(Tip: For best results, ask your contractor(s) to provide search terms) |

|Post Contract to GA Website |Copy the following files into the G:\Shared Info\INTERNET folder: |

| |Copy Contract file (#####c.doc or pdf) |

|Link to: Current Contract |Copy the price sheet (#####p.doc or xls or pdf) |

|Portal Training |Copy the specification (#####s.doc or xls, or pdf) if applicable |

| |Copy the bid tab (#####t.doc or xls or pdf) |

| |Copy the bid document (#####b.doc or xls, or pdf ) |

| |Copy the bid Amendment (#####a.doc or pdf ) |

| |Frequently Asked Questions (FAQ) document (#####f.doc or xls or pdf) |

| |Copy the award memo to file & checklist document (#####m. doc or xls or pdf) |

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