Doug Smock probably has a smirk on his face this morning. Before Doug became Editor of Purchasing -- back when trade publications had the funding and staffing levels to pursue real reporting -- he was a writer at the Post-Gazette in Pittsburgh. Despite the fact that he has been a graduate of both organizations for well over a decade, I still count him as one of the better investigative writers I've had the pleasure of meeting and working with to this day. And even though many consider Pittsburgh a second-tier city -- I don't count myself in that camp having lived there -- they at least continue to have a newspaper with a number of investigative journalists on staff who have the time and background to get to the bottom of the news. Which it would appear that they're starting to do with their latest story on the CombineMed, CombineNet, UPMC, Americium and NHS situation.
I suspect some of the claims by various parties in the article will form the basis of various ethical and potential legal arguments going forward. In the article, CombineNet's CEO is paraphrased as denying "there was any bid-rigging, conflict of interest or attempt to give CombineMed a leg up on its competitors" in the case. At least two of my sources suggest otherwise -- and granted, they have their own biases, just as internal management does -- but they also claim to have documentation and recorded process audit trails that support their claims of, in their words, a "bid-rigging" process. They also claim what transpired went all the way to the top and that they can prove it. Here are some of my notes from conversations with them including some higher level detail into the specific RFP creation and process based on their notes, recollections, documentation and opinions of the events:
"Under direction and authority of UPMC & Americium, CombineMed employees were instructed to and played a key part in an organized effort to rig the RFP process for NHS involving CombineNet, CombineMed, UPMC and Americium representatives. CombineMed employees were instructed to create an RFP in a manner such that only CombineMed could be awarded the business (the official tender was T473 -- E bidding and optimizing solution). Since CombineNet had recently been asked to do so for another client in the private sector (which is legal and somewhat common), we used this as the initial template/framework (ironically, it was Joe Bonidy, Tony's son, that provided us this RFP template with full knowledge of its intent). We modified the RFP to include correct terms for the healthcare industry (e.g. item(s) instead of lane(s), supplier(s) instead of carrier(s)), and further modified the RFP to include features unique to CombineMed's Healthcare Sourcing Suite."
"Essentially, CombineMed employees went through the entire Healthcare Sourcing Suite and briefly documented nearly every feature, report, and standard data attribute to develop the requirements for the RFP (section 4 in the RFP/ITT released by Hammersmith). When scoring the application functionality, the RFP was structured to favor solutions that had these requirements as standard functionality. There were at least 7 CombineMed/CombineNet employees directly involved in writing the RFP requirements (including myself). We emailed back and forth with Americium multiple times to ensure that CombineMed was the only vendor that could satisfy the requirements, try to put CombineMed/CombineNet specific terms into more generic terms so that it was less obvious that CombineMed actually authored the requirements, and clarify various terms related to advanced sourcing and/or optimization for Americium. Additionally, Hammersmith provided CombineMed a data extract prior to the contract award so CombineMed could engineer necessary changes and include those changes as standard features in its RFP response. Also, CombineMed was able to get a head start on cleaning this data to help hedge on its delivery time lines. This opportunity was not provided to CombineMed's competitors."
"Furthermore, Americium acted as an intermediary to pre-negotiate the Heads of Terms portion of the RFP between HHNT's lawyers and CombineMed/UPMC (CombineMed used a solicitor recommended by Americium, and to which Americium was also a client. CombineNet used the same solicitor as Hammersmith for non-NHS sales activities throughout the UK). This allowed CombineMed to propose financial terms that were known to be acceptable to Hammersmith Hospitals NHS Trust (now Imperial College Healthcare NHS Trust). In addition money exchanged hands between UPMC and Americium, and money was also eventually funneled to the NHS employee. Even if it is correct that Americium wasn't paid for activities directly related to Hammersmith (which I don't believe to be true), the contract was worded in such a manner that it could be applied to any trust in the English NHS. This means that Americium was still heavily incented (up to $2 million) to ensure that CombineMed be awarded the contract so they could be paid from all the other trusts piggy backing off this contract."
Now, I view some of these claims and process steps to be innocuous. After all, RFP influence is a legitimate fact of enterprise software sales as some have commented already. But the way the process was conducted here might appear extraordinary in some areas. In my view, if the above statements are accurate, the extraordinary circumstances are based in part on the fact it was a government contract in question as well as the alleged personal and professional relationships and directions communicated between NHS, Americium, CombineMed, CombineNet, and UPMC staff and representatives. The fact that CombineMed never received a dollar in the end because of a "change in management" at NHS Hammersmith is completely superfluous to the behavior and alleged transgressions that occurred in attempting to obtain the contract if they prove to be true. If you believe otherwise, I have a Senate seat that I'd like to sell you (but if you won't buy it, I'm not guilty of anything by offering it).
- Jason Busch