Louisiana to test online bidding application

Private insurance companies hoping to manage one of Louisiana’s three health care plans will soon submit their proposals online in a pilot project that state government officials anticipate could make the procurement process more accurate.

Instead of mailing back responses with attached marketing documents to the state Office of Group Benefits’ Request for Proposals, the vendors will log onto a secure Web site and submit detailed answers to the different criteria outlined in the solicitation. As a result, the state agency will be able to view the electronic responses in an “apples to apples” comparison, said Rizwan Ahmed, the agency’s chief information officer.

The agency spends $1 billion annually on health insurance coverage for nearly 300,000 state and local school board and municipal employees and retirees from 400 government agencies. It offers four health plans: one that it manages itself and three that it awards to major health insurance companies such as Humana or UnitedHealthcare. The state usually awards a one-year contract with an option for two years for each plan.

IE-Engine, a Woburn, Mass.-based technology company that develops human resources and benefits software, will host the application for the state for less than $50,000, Ahmed said. The company customized the application to conform to the state’s strict procurement guidelines.

In addition to providing each bidder with a user ID and password, IE-Engine is also conducting a Webinar to help prepare interested vendors and set up a hotline for them if any problems arise. The process is scheduled to start Sept. 1 and could last up to 30 to 45 days.

The application would replace a laborious, paper-based system in which agency officials have to analyze responses from each bidder and then compare them. In some cases, the application automatically tabulates data so evaluators don’t have to take the time to make the calculations themselves, such as the various proposed fee schedules for different regions. The online submissions will make it easier for agency officials to view all associated fees with the plans and service delivery.

“Now there is a less or no chance of one vendor saying it one way and the other vendor is saying it a totally different way,” Ahmed said. “They’re all talking the same language, they’re responding to the same ‘yes and no’ answer and they’re specifying the quantity in a specific place. And then we are able to evaluate in a much better fashion than we have been able to evaluate in the past.”

Ahmed said he isn’t sure how vendors will respond to it, but he feels it will be helpful especially for smaller companies that may feel disadvantaged when competing against the larger ones.

Another major benefit will be a better government response to protests from losing bidders. He said the agency will be well equipped to answer any protest from the information collected electronically. “We feel that it’s going to be not only a lot quicker, but it will be (a much) cleaner process,” he said.

But the pilot project could have an impact on the rest of the state. Other state agencies and officials, he said, have expressed interest in the process, including the state’s top procurement official.

“The whole concept of procurement probably will change if we are successful,” Ahmed said.