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Guam Government Health Insurance Bidding Cancelled
Administration department failed to properly review, assess bids

By Mar-Vic Cagurangan

HAGTA, Guam (Marianas Variety Guam, Nov. 28, 2012) – The Department of Administration (DOA) muddled up the evaluation of bids for the government of Guam’s health insurance plan, prompting its negotiating team to cancel the bidding process, according to the Attorney General’s Office.

While defending DOA’s decision to call off the bidding, the AGO asked the Office of Public Accountability to resolve the conflict once and for all so that GovGuam can proceed with the procurement of insurance coverage for its employees and retirees.

"The cancellation of this solicitation is consistent with Guam law and reflects – in the decision of a majority of the negotiating team members – the best interest of the government," Assistant Attorney General John Weisenberger said in response to the appeal filed by Calvo’s SelectCare and its insurance underwriter, Tokio Marine Pacific Insurance.

Reinstatement

SelectCare and Tokio Marine are seeking the reinstatement of the bidding process, saying the negotiating team’s decision to reject all offers and cancel the request for proposal altogether was "improper" and not justified.

The AGO, however, explained that the confusion stemmed from DOA’s decision to allow two other bidders, TakeCare and Aetna Insurance Co., to amend their proposals after the bids had all been evaluated.

This decision was challenged by SelectCare and another bidder, Island Home Insurance.

But the AGO pointed out that TakeCare and Aetna were allowed to amend their proposals "only to clarify the products that they were offering; not the materials that were to be evaluated by the negotiating team."

The two bidders were not allowed to adjust their rates from the original proposals, the AGO said.

"There is no evidence of favoritism," Weisenberger wrote. "There is only evidence of dynamic team approach to decision-making and an attempt to apply a clear legislative mandate to increase competition in this procurement process."

During the initial phase of the evaluation process, Aetna’s offer was rejected, while TakeCare ranked second.

However, the second evaluation, made after TakeCare and Aetna amended their proposals, yielded a different result. TakeCare became the tail-ender as its ranking fell to No. 4.

Convoluted

"Although DOA asserts that the law and regulations applicable to this procurement of group health insurance benefits would benefit the kind of amendment to proposals as occurred here," Weisenberger wrote, "nonetheless, the actual process undertaken was deemed flawed in its execution and justified a cancellation of the solicitation of, and a new RFP."

The AGO noted that the error stemmed from DOA’s failure to properly review and assess all bids "at the same time and most appropriately in Phase 1 of the process."

Such error, the AGO added, resulted in a "convoluted process" that produced two sets of evaluation with "two conflicting results in terms of ranking."

"It has rendered the procurement process, as it unfolded, questionable in the eyes of the participating offerors," the AGO said. "DOA, through its negotiating team, determined that it is in the best interest of the territory to initiate a new solicitation."

Expired

"All parties will benefit from a resolution of this conflict as soon as feasible," Weisenberger wrote.

GovGuam’s 2012 insurance plan expired on Sept. 30, but the administration and SelectCare have agreed to extend the agreement pending resolution of the bidding crisis that hampered the procurement of group health insurance for Fiscal Year 2013.

At the Legislature, Sen. Ben Pangelinan is still hoping to gather enough votes to override the administration’s veto of Bill 513, which proposes to allow individual GovGuam employees to choose their insurance provider.

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