I accidentally ran across a 17-page sourcing case study from Allegheny County, Pennsylvania.

This case study will likely be the subject of a number of posts on the NLPA Blog.  There’s a number of things that the County’s sourcing team did well in the sourcing project.  And there are plenty of things that are downright questionable.

In this first post, I’ll point out one of the questionable things.

In this project, the County was seeking to select three providers of  care management support to individuals age 60 and older — who are not Medicaid-eligible — so that they may continue living independently.  The goal was to “improve the quality” of what it calls its “Options Program.”  According to the case study, “The RFP asked respondents to address approximately 40 questions in a maximum of 30 pages.”  Further, the case study indicated that the RFP went through “14 drafts and review by the Allegheny County Law Department. Reviewers submitted a total of 177 recommendations.”

The case study offered three examples of the questions asked:

  • What does your organization provide in services and programming to the community that is unique, innovative and progressive?
  • What actions or changes would your organization need to make in its current structure or operations to execute the scope of work proposed in this RFP?
  • Indicate some recent service innovations or improvements that grew out of your organization’s participant and caregiver data collection and analysis.

The sourcing team – which seems to have included an extremely large number of stakeholders but an untold number of procurement professionals, if any – rated answers to the questions.  Those ratings led to the short-listing of four suppliers (down from 23 that showed up at the pre-proposal conference).  The County ended up selecting three providers – one incumbent and two newcomers.

The case study goes on to state the following:

“The announcement of winners unleashed an unusual combination of career rearrangements. Experienced care managers at three unsuccessful incumbent agencies found themselves in great demand at two incoming agencies that had written excellent proposals but had no aging care management staff. With the freedom to establish their own salary structures, [the two new suppliers] could compete to lure staff from prior providers. Moreover, even though [the incumbent supplier] had retained a contract, it was losing a portion of its former geographic service area. In an effort to provide continuity of care, [the incumbent supplier] gave up some of its best care managers so that they could join [one of the new suppliers] and continue to serve the same participants in their caseloads.”

This is where things began to get bizarre for me.  The County selected two of its three successful bidders despite the fact that they had “no aging care management staff.”  Fourteen drafts.  One hundred seventy-seven recommendations.  Forty questions.  Yet, no one thought that successful suppliers should have employees to perform the contracted services before contract award?  That, of all the criteria on which the bidders were rated, “experienced employees” wasn’t one of them?

So, in a game that the case study calls “musical chairs for employees,” the new suppliers simply acquired the same employees that were already performing the services for outgoing suppliers.  Additionally, by not mentioning cost at all, it appears that cost may not have been considered in the decision – only the ratings of questions answered in proposals and in follow up interviews.  Considering that this sourcing process took a whopping 16 months – hey, that’s government procurement for ya – it really calls into question whether Allegheny County’s approach was really the smart way to improve the quality of its Options Program.

Stay tuned for more analysis of this interesting – and, in some ways, disturbing – sourcing case study.

Charles Dominick, SPSM, SPSM2, SPSM3

Charles Dominick, SPSM, SPSM2, SPSM3 is the Founder of the Next Level Purchasing Association. Charles is also the Co-Author of "The Procurement Game Plan: Winning Strategies & Techniques For Supply Management Professionals."

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