EngagePoint responds to Hawaii Department of Human Services in a Dec. 24, 2012, letter. The company faulted the department for its handling of a contract for healthcare software.

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Via U.S. Mail and E-mail: [kfink@medicaid.dhs.state.hi.us]
Department of Human Services, Med-Quest Division
Attn: Dr. Kenneth S. Fink, MD, MGA, MPH
601 Kamokila Boulevard, Room 518
Kapolei, Hawaii 96707
December 24, 2012
Dear Dr. Fink:
The purpose of this letter is to inform the Department of Human Services (DHS), Med-Quest
Division that EngagePoint has decided not to pursue an administrative appeal of the
Procurement Officer's December 14, 2012 decision confirming the award of the Integrated
Eligibility Solutions Implementation and Operations contract to KPMG. However, our decision
not to request an administrative hearing reflects neither a lack of confidence in the merits of our
Protest nor any agreement with the approach taken by the Department to build a solution as
opposed to using Commercial Off-The-Shelf (COTS) software. While maintaining the ongoing
protest may ultimately be in the best fiscal and operational interest of the taxpayers of Hawaii,
it would also create a potentially prejudicial delay of the contract award that is not in the overall
best interest of the people and State of Hawaii. EngagePoint wants to enable Hawaii to move
immediately forward with the tight timeline product development effort to alleviate any
penalties created by not meeting the October 1st
, 2013 deadline.
EngagePoint would like to thank Dr. Fink for clarifying the differing, confusing, and sometimes
opposing language in the DHS Request For Proposal (RFP) and for sustaining major components
of our formal protest; however, it has become clear that DHS has decided to avoid the Centers
for Medicare and Medicaid Services (CMS) guidance for a reusable solution with preference for
COTS solutions. Had the EngagePoint Team known that DHS MedQuest preferred a custom built
application as opposed to a reusable, COTS based solution as we proposed, we would not have
prepared a response to the RFP. Even with timesaving reusability approach and COTS software,
it would have been a very tight schedule to meet. EngagePoint, therefore, wants to facilitate the
commitment from KPMG to meet your deadlines without scope change, so taxpayers do not
incur additional undue costs.
However, EngagePoint believes we would be remiss if we did not take the opportunity to point
out from our perspective that the procurement process was deficient in the original and
rescored evaluations. This includes the granted remedies as awarded through our original
protest. Given the magnitude of the pricing difference in this procurement bid (with KPMG’s bid
being $89,940,000 over $24,000,000 higher than EngagePoint’s proposed solution) and the lack
of transparency in the rescoring evaluation process, EngagePoint finds it highly questionable

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that the same evaluation team dramatically down scored the EngagePoint bid to the point of
failing EngagePoint in the technical scoring while up-scoring KPMG. The disqualification means
DHS should not have proceeded with the opening of the EngagePoint Cost Proposal in the first
place. The reliability of the overall initial and rescoring evaluation processes remain
questionable at best.
EngagePoint asserts that the Department of Human Services, Med-Quest Division has not
followed their own protocols for this evaluation and reiterates they did not have the
transparency a procurement of this size warrants to ensure a fair and equitable process
occurred for all Offerors participating. This is supported by the manifestation of facts.
To recap what has occurred and as stated in our protest letter from Tim Lui-Kwan on November
26, 2012, EngagePoint submitted to MedQuest or before October 12, 2012, its RFP proposal
response. On October 22, 2012 MedQuest notified EngagePoint via email that they were still
evaluating EngagePoint’s proposal. On October 26, 2012, MedQuest notified EngagePoint via
email that EngagePoint passed the technical portion of the evaluation. On October 30, 2012,
EngagePoint gave an in-person oral presentation to MedQuest/DHS officials. By letter dated
November 1, 2012, MedQuest requested that the priority-listed offerors provide their best and
final offers in writing by submitting a revised Cost Proposal. This letter also reiterated that
although DHS requires a system that supports future phases, the scope of the RFP is for Phase I
only. On November 7, 2012 EngagePoint notified MedQuest that its original Cost Proposal was
its best and final offer. On November 8, 2012, MedQuest notified EngagePoint its intent to
award the contract to KPMG with a bid amount of $24,229,975 higher than EngagePoint’s bid.
In the original scoring EngagePoint received 424.5 points out of 700 available for its Technical
Proposal. The protest letter of November 26, 2012, summarizes the grounds for protest as
follows:
1. The Proposal Evaluators failed to evaluate EngagePoint's proposal according to the
criteria and standards set forth in the RFP;
2. The Proposal Evaluators committed plain and sometimes glaring analytical and factual
errors by ignoring or failing to consider information contained in EngagePoint's
proposal; and
3. The Proposal Evaluators considered outside information in evaluating EngagePoint's
proposal.
In your response of December 7, 2012, you acknowledge that the evaluation process was not in
compliance with the criteria set forth in the RFP and sought to remedy this error by having
evaluators rescore specific areas of EngagePoint’s proposal and KPMG’s proposal and/or to
correct prior errors.

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On December 14, 2014, EngagePoint was informed that rescoring had occurred and that KPMG
remained the successful offeror. The evaluation abstract attached to your letter showed that
EngagePoint no longer passed the minimum scoring threshold for the technical component
following the rescoring. EngagePoint’s score was reduced from 424.5 points to 405.9.
Conversely KPMG’s score went from 511.8 to 519.4.
On December 19, 2012, EngagePoint sent representatives to review the procurement file. It was
at that time EngagePoint discovered not all of the evaluators were involved in the re-scoring
process. Once again, DHS did not follow their own stated evaluation process as stated in the
Protest Decision letter issued on December 7, 2012. Furthermore, there was a lack of
transparency as EngagePoint was never notified that only 9 out of the 10 evaluators would be
utilized in the re-scoring process and EngagePoint learned of this in the self-initiated discovery
by requesting the copies of the rescored evaluator sheets.
On page 3 of your December 7, 2012 letter, you stated that after initial independent scoring,
evaluators were convened to provide them an opportunity to ask questions to ensure that
individual scoring differences were not the result of misunderstandings, lack of information, or
inability to locate appropriate information in the proposal. In the initial evaluation the number
of scoring variances and comments made by evaluators clearly indicates that in fact there was
no review of scores to determine if there were scoring anomalies occurring as a result of
material differences versus opinion. Words such as "feels like", "sounds like", and "appears to
be" clearly reflect opinions and not decisions based on facts. In the second evaluation, the
comments also reflect little or no independent scoring given the number of nearly identical
comments among the evaluators especially where there were drastic changes in the scoring.
EngagePoint maintains that ambiguity was created with the issuance of Appendix X on October
2, 2012, just 10 days before proposal responses were due. The language on page 2 of the RFP
states DHS’s preference was to contract with an offeror that could provide a Commercial Off-
the-Shelf System (COTS) or a similar hybrid system. Appendix X changed that direction by
placing more emphasis the proposer’s approach to the solution DHS was looking for.
In addition the December7, 2012 letter indicates the proposed award shall be revised to comply
with the law consistent with your decision of having the evaluators rescore specific categories.
Nowhere does your decision indicate that more or fewer evaluators will be used and, in fact,
leads the reader to believe that the exact same evaluators will be used. Until EngagePoint
reviewed the procurement file it did not come to light that one evaluator did not participate in
the rescoring. Categories that were rescored were averaged based on the new number of
evaluators without consideration of using the absent evaluator’s existing scores or replacement
of the evaluator with an equally qualified substitute. It is unclear to EngagePoint how this
change complied with the direction given.

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Furthermore, the rescoring of these specific categories has now led to a disqualification of
EngagePoint. This exacerbates an already defective evaluation given the EngagePoint Cost
Proposal should never have been opened or a best and final offer (BAFO) requested.
In closing, EngagePoint strongly urges the DHS, Med-Quest Division carefully reviews their
protocols for proposal evaluations to ensure that RFP requirements are followed, consistency
occurs, and material differences are dealt with so a fair and equitable evaluation can occur since
there will likely be subsequent RFPs for a Phase II solution and other future phases.
We thank you for the opportunity and appreciate the Department agreeing with EngagePoint on
the lack of certain operational controls by upholding major components of our formal protest.
We would certainly welcome the opportunity to assist the Department in meeting the tight
timelines for the Eligibility implementation should the opportunity present itself.
Sincerely,
T. David Smith | SVP, Sales and Marketing
Office: (954) 315-0902 x1021
Cell: (770) 329-8101
Sonia T. Lucas | Vice President, Business Development
Cell: (678) 472-3227
Skype: Sonia.Lucas.engagepoint
cc: Patricia McManaman, Director, Department of Human Services
[pmcmanaman@dhs.hawaii.gov ]
Sonny Bhagowalia, CIO, Office of Information Management and Technology
[sonny@hawaii.gov]
Lee-Ann N.M. Brewer, Esq., Deputy Attorney General [Lee-Ann.N.Brewer@hawaii.gov]
Tim Lui-Kwan, Esq., Carlsmith Ball LLP [tluikwan@carlsmith.com]
Pradeep Goel, CEO, EngagePoint [pradeep.goel@engagepoint.com]