State of Washington's Procurement of a Medicaid Management Information System

The contract between the State of Washington and Electronic Data Systems Federal Corporation (EDSF) for implementing and operating the Medicaid Management Information System (MMIS) was reviewed to determine: if the lowest technically acceptable and responsible offeror was awarded the contract; if the State had assumed any responsibilities which were originally to be provided by the offeror; and the difference in cost between the lowest unsuccessful offeror's proposal and the cost of the contract. Blue Cross' proposed prices for implementing Washington's MMIS were lower than the EDSF proposed prices for all of the options included in the request for proposals. However, the State awarded a contract for a system not specifically included in the request for proposals. The State believed that EDSF could install its system 6 to 12 months faster than Blue Cross which would save the State from $5.3 million to $10.5 million; these claimed savings were unsubstantiated. It could not be conclusively determined if the State awarded the MMIS contract to the lowest technically acceptable and responsible offeror. The State assumed responsibility for claims preparation which increased the price differential between the EDSF contract and the Blue Cross proposal to about $5.4 million.