What Happened at CombineMed — Two Perspectives

Yesterday, Tony Bonidy, CombineNet's CEO, responded to the accusations surrounding the CombineNet / CombineMed story in the form of a comment to a post. Earlier this afternoon Sean Martyn, one of the "whistleblowers" involved, responded with his perspective on the story in a comment as well (warning: Sean's is long). Both clearly have biases and opinions based on their different roles and perspectives. I have reprinted their comments below as many readers are unlikely to check the comments section of back posts. I will reprint Tony's comments first, followed by Sean's.

Tony Bonidy's Statement

"The principal problem with Jason's commentary on the Sunday Times article is that he has heard only one side of the story, and that from biased and ill-informed commentators. CombineNet is not the target of the UK investigation. Let me set the record straight.

Several years ago, in light of the very substantial savings which can be achieved by our offering, our subsidiary CombineMed sought to introduce our offering to member hospitals of the UK’s National Health Service. Given CombineMed’s initial lack of familiarity with the procurement process of these hospitals, CombineMed retained Americium to assist it in introducing our offering to these hospitals and navigating the procurement process. One of the hospitals to which Americium introduced CombineMed was the Hammersmith hospital.

Representatives of Hammersmith were favourably impressed with our offering and sought to apply it to Hammersmith’s needs. They elected to proceed under the EC’s competitive procurement process that entails an RFP. We understand that Hammersmith sought to design the RFP to ensure that that they could access a product with the technical capabilities of our offering. They also designed the RFP to ensure that there were a large number of bidders. There were 37 initial expressions of interest. Hammersmith requested that five of the 37 firms that expressed initial interest complete pre-qualification questionnaires and thereafter narrowed the field to two finalists, of which CombineMed was one. It is our belief that CombineMed was awarded the contract principally because, of the two finalists, it was the only competing firm willing to absorb all front-end costs, and the other finalist’s technology was not fully compliant with Hammersmith’s requirements.

One representative of Americium had particular knowledge of Hammersmith’s procurement process needs; Hammersmith invited him to serve on a five member panel assisting Hammersmith in the procurement process relating to sourcing technology. Subsequent to the award of the contract, CombineMed made a substantial investment in data cleansing to enable it to do a test utilization of its offering for Hammersmith to demonstrate the savings potential. However, there was a change in management at Hammersmith and in consequence we never conducted a sourcing event for Hammersmith. None are planned and none are anticipated. Hammersmith has never paid us a penny, and we have never paid Americium for anything other than limited expense reimbursements and for unrelated work in Singapore. In view of our lack of success in winning NHS contracts, we terminated our relationship with Americium last fall.

Four CombineMed employees raised concerns about the Hammersmith procurement process. CombineNet took their concerns very seriously and in response immediately hired an independent law firm to conduct an in-depth investigation of the concerns, which concluded that the concerns were without merit.

CombineMed has not dismissed any employee as a result of his or her raising concerns about Americium. As a result of restructuring plans made prior to the time when such concerns were raised, two of the four the employees who raised the concerns are no longer with CombineMed. A third had left CombineMed prior to raising the concerns. The fourth employee is still a valued member of our CombineMed team.

The NHS has initiated its own investigation of Americium and its principals. CombineMed is not the target of that investigation and intends to cooperate fully."

Tony Bonidy

CEO, CombineNet

Posted By Tony Bonidy | 2/9/09 2:22 PM

Sean Martyn's Statement

"In response to the recent articles and blog entries, I want to set the record straight on what occurred during CombineMed’s pursuit of the NHS contract and the “RFP rigging” (without getting too deep into the alleged fraudulent activities). I will lay the facts out in detail, and refrain from incorporating any biases that I have. But, first, let me provide my pertinent background information. I am a former Project Manager at CombineMed, and was the lead Project Manager on the NHS project shortly after it’s inception until the time of my termination from CombineMed—one week after I signed the “whistle blower memo” as it has become known.

Next it is key to understand the main characters and their relationships:

- Buyer: Hammersmith is a hospital system within the National Health Service
- Vendor: CombineMed, a joint venture between UPMC & CombineNet
- Agent: Americium represents Hammersmith’s interests in the tender, and was also hired by UPMC to obtain the NHS contract for CombineMed

CombineMed was first introduced to Americium in mid-2006 by Phil Green, President of Strategic Business Initiatives (SBI) at University of Pittsburgh Medical Center (UPMC). At the time, UPMC was already engaged in a relationship with Americium in an effort to export UPMC’s expertise in Sports Medicine, healthcare information and other IT systems. Americium had unique ties to the National Health Service of England (NHS) and openly discussed a close relationship with various government officials in the UK, India, and Singapore. Phil Green introduced Richard Nawrot, Managing Partner at Americium, to CombineMed’s offering and boasted of the savings potential that UPMC realized using the technology.

Americium, seeing an opportunity, quickly linked up with CombineMed. Phil Green scheduled a teleconference for October 12, 2006 between CombineMed, Americium, and Hammersmith Hospitals NHS Trust—which is now Imperial College Healthcare NHS Trust. The participants on the call included: Richard Nawrot (Americium), Paul Heffernan (Hammersmith), Richard Wilson (COO at CombineNet), a key consultant to CombineMed, and me. The purpose of the call was to prepare CombineMed for an upcoming presentation on October 17, 2006 that UPMC, Americium and Hammersmith scheduled as an initial step to sell CombineMed’s Healthcare Sourcing Suite to other NHS trusts. It is important to note that no sales representatives from CombineMed or CombineNet were on this call because the expectations at the time were that UPMC and Americium would take care of all sales activities in this engagement (and all performance based incentives). Attendees at the meeting in London on October 17, 2006 included UPMC (Phil Green), CombineMed (Tom Finn, a key consultant to CombineMed, and myself), Hammersmith (Paul Heffernan, and John Abbott), Heads of Procurement (HOPs) from other trusts that make up the North West London Procurement Federation (including the Procurement Director of the Confederation), and representatives from the Purchasing and Supply Agency.

Americium and UPMC then scheduled a visit for Paul Heffernan and John Abbott to come to Pittsburgh November 6-9, 2006. Much of the time was spent at CombineNet’s office providing a demonstration of the application, developing the scope of the project, and going over sales activities. Paul Heffernan & John Abbott also spent some time at UPMC meeting with UPMC’s Supply Chain executives and enjoying a helicopter tour of the city of Pittsburgh. During this visit, P

hil Green, Tony Bonidy, and Tom Finn met with, and ultimately hired, Paul Heffernan in accordance with a plan that Green had already cleared with Heffernan’s superiors at Hammersmith.

Throughout the rest of November and December 2006, CombineMed worked with Americium and Hammersmith to tailor the product demonstration & sales presentation to UK audience, and review the spend data provided by Hammersmith.

Come January 2007, Americium, acting as a quadruple agent to Hammersmith, UPMC, CombineNet, and CombineMed, began to negotiate with Hammersmith and UPMC to reach acceptable contract terms that CombineMed could submit as part of its proposal. In essence, negotiating the final legal terms as the tender was being drafted.

January 3, 2007 is when, under direction and authority of Phil Green (UPMC), Richard Nawrot and George Henderson (Americium), and Tony Bonidy (CombineNet), at least 7 CombineMed employees, including me, begin to write the requirements for the upcoming tender—equivalent to a request for proposal (RFP)—with instructions to write in a manner that only CombineMed wins. The initial template/framework CombineMed used was an RFP that CombineNet recently prepared for another client in the private sector that also wanted to ensure that CombineNet was the obvious winner (which is common).

CombineMed employees were then instructed by Americium to modify the template to include correct terms for the healthcare industry (e.g. item(s) instead of lane(s), supplier(s) instead of carrier(s), etc.), translate US English into UK English, and further modify the tender requirements to include features unique to CombineMed's Healthcare Sourcing Suite and particular NHS requirements. Essentially, CombineMed employees went through the entire application and briefly documented nearly every feature, report, and standard data attribute to develop the requirements for the tender (this would later become section 4 in the tender released by Hammersmith, T473 - E bidding and optimising solution). When scoring the application functionality, the tender was structured to favor solutions that had these requirements as standard functionality. Americium emailed CombineMed employees multiple times to ensure CombineMed was the only vendor who could satisfy the requirements, that CombineMed/CombineNet specific terms were translated into more generic terms so that it was less obvious that CombineMed authored the tender requirements, and clarify various terms related to advanced sourcing and optimization. Furthermore, CombineMed employees were instructed to add requirements based upon previous/actual historic performance metrics of the optimization engine, such that no other competitor could be chosen.

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 timelines. This opportunity was not provided to CombineMed's competitors, and was when I really started to question whether this process was legitimate. We were continually assured by Phil Green, Richard Nawrot, George Henderson, and Tony Bonidy that everything was above the board because everything had been “disclosed”, and therefore, we continued working the data in advance of a contract award.

January 25, 2007, Hammersmith finalized and published the advertisement, kicking off the tender process. At this point, interested suppliers were required to submit an Expression of Interest prior to the deadline in order to have a chance to move onto the next stage. CombineMed employees were directed to have the tender requirements completed before the Expression of Interest deadline so the tender requirements could be released by Hammersmith immediately after. The strict timelines were forced down by UPMC because Phil Green, as he made it clear to us, had a revenue number he had to hit.

On March 12, 2007, Hammersmith invited 6 of the 37 firms that submitted an Expression of Interest to participate in the official public tender T473 - E bidding and optimizing solution. Shortly after Hammersmith notified CombineMed that we were invited to the next round, they also informed us that our competitors were Intender, Xtender, In-tenda, Due North, and Belmin Group. This information was provided to us so we could perform a competitive analysis and sculpt our bid accordingly.

On March 19, 2007, another vendor asked Hammersmith a question regarding the requirement that the firm must have a proven record of solving a very large number of constraints. Americium emailed the question to me to respond and asked me to answer in such a manner that it would “put it to bed.” It isn’t too abnormal for a an organization (public or private) to use other bidders as references on terminology, but it is very abnormal to forward the email containing the question directly to a competing bidder while instructing the presumed vendor to answer the question in a manner that dismisses the asking company from meeting the requirement. I took a first crack at answering the question, and then forwarded my answer to a few people within CombineMed & CombineNet. Phil Green, Richard Nawrot, George Henderson, and Tony Bonidy continually assured us that everything was legitimate and ‘that’s how business is done over there’; satisfied that I drew enough attention to my concerns, I sent our answer to the question back to Americium later that day.

On April 18, CombineMed submitted the final response to the tender and was notified two days later that we were one of two companies invited to present to the selection committee. The selection committee consisted of George Henderson (Americium), Mansel Chamberlain (Procurement Director of the North West London Procurement Confederation), and Steve Lunn, John Abbott, and Anne Hall (Hammersmith). At this time, George Henderson was receiving money from UPMC and CombineMed for both related and unrelated activities to this tender (and was key to rigging the tender requirements in CombineMed’s favor). Shortly after the presentation, Steve Lunn reached an agreement allowing John Abbott to officially become a secondment employee for CombineMed. Seconded employees are simply borrowed employees, however Abbott received significant financial compensation (at least $20,000) from UPMC in addition to his NHS salary.

On April 26, CombineMed made its final presentation to the selection committee, and two hours later was notified by George Henderson that they will be awarded the contract. A few days later, Hammersmith officially notifies CombineMed they were awarded the business.

As far as the alleged fraud, corruption, and bribery charges that have been floating around, it appears that the UK authorities are already investigating those matters and have arrested three individuals in relation to their dealings with the NHS, Americium, UPMC, and CombineMed. Those three individuals are reported to be Richard Nawrot, George Henderson, and John Abbott. I wish the best for John Abbott, because, even though he received money and was aware of what was going on around him, his superior(s) approved it all.

As more and more facts become available, you will all be more equipped to make your own judgments on what was right or wrong—I have already made mine. However, the bottom line is that CombineMed’s technology is so unique and powerful that it did not need to be in this situation where people have reason to judge their actions. CombineMed & UPMC could have played the whole thing straight and won the business on its merit ... the technology is that good. When all is said and done, the people that will lose the most are the UK citizens, since they will foot the bill to investigate and prosecute the wrong doings, and worse yet, wi

ll lose millions in the savings opportunity that CombineMed would have brought in this and other sourcing projects. Once again, we see how the decisions of a very few people can have such a profound effect on the many."

Sean Martyn

Posted By Sean Martyn | 2/11/09 1:33 PM

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