Final_RFP_758_2500000221_3_SO_FORM.PDF

Document ID: RFP 758 2500000221 Page: 1

Commonwealth of Kentucky

SOLICITATION MODIFICATION

Modification: Yes Version #: 3

TITLE: Pharmacy Benefits Manager (PBM)

Date Issued:

03/03/2025 Record Date:

03/03/2025

Solicitation Closes Date:

03/31/2025 Time:

15:30

Solicitation No:

RFP 758 2500000221

Reason for Modification

Addendum #2 (March 3, 2025) - To post the Commonwealth's response to vendors written questions. Dates within Section 1.1 have been revised, please note the revisions of the 2nd set of vendor questions and the closing date.

Online Bidding Prohibited: No For Information Call:

Amy Monroe 502-564-8625

Bid Receiving Location:

Bid Receiving

See Terms & Conditions for Bid Submission Instructions

Other KY

Vendor Customer Number:

Vendor Name:

Phone Number:

Fax Number:

Email Address:

Ordering

Address:

City, State, Zip:

Contact Name:

Contact Email:

Contact Phone Number:

Payment

Address:

City, State, Zip:

Contact Name:

Contact Email:

Contact Phone Number:

Ownership Type

__ Sole Proprietorship __ Partnership __ Corporation __ Other_________________________

SIGNATURE OF AUTHORIZED AGENT IS REQUIRED UNLESS RESPONSE

IS SUBMITTED ELECTRONICALLY. FAILURE TO SIGN SHALL RENDER

THE BID INVALID.

Signature X_________________________________________ FEIN#____________________ Date____________

All offers subject to all terms and conditions contained in this solicitation.

Document ID: RFP 758 2500000221 Page: 2

Line Items

Commodity Group: Default Commodity Group

Line CL Description Quantity UOM Unit Cost Line Total or Contract Amnt

1 PBM for KEHP

Comm Code Comm Description Manufacturer Model # Manuf Part #

96102 Administrative Services, All Kinds (Incl.

Clerical, Secreta

Extended Description The Commonwealth is seeking qualified Vendor(s) for pharmacy benefits management (PBM) and pharmacy claims administration on a self-funded basis

Shipping Information Personnel - Office of Administrative Services persdfs@KYMSOffice.onmicrosoft.com 501 High Street, 3rd floor

Frankfort KY 40601

Billing Information Personnel - Office of Administrative Services

501 High Street, 3rd floor

Frankfort KY 40601

Document ID: RFP 758 2500000221 Page: 3

Submission Checklist

The following items will be required to be submitted with bid:

Item Proposed Technical Solution. Submit electronically by Closing Date & Time.

Proposed Cost Solution. Submit electronically by Closing Date & Time.

COMMONWEALTH OF KENTUCKY

REQUEST FOR PROPOSAL (RFP)

FOR

PHARMACY BENEFITS MANAGER (PBM)

RFP 758 2500000221

RELEASE DATE: MONDAY, FEBRUARY 10, 2025

CLOSING DATE AND TIME:

MONDAY, MARCH 17, 2025 MONDAY, MARCH 31, 2025, AT 3:30 PM ET

ISSUED BY

THE FINANCE AND ADMINISTRATION CABINET

ON BEHALF OF

THE PERSONNEL CABINET

DEPARTMENT OF EMPLOYEE INSURANCE

COMMONWEALTH BUYER:

AMY C. MONROE, CPPB

COMMONWEALTH OF KENTUCKY

FINANCE AND ADMINISTRATION CABINET

OFFICE OF PROCUREMENT SERVICES

200 MERO STREET, 5TH FLOOR

FRANKFORT, KY 40622

(502) 564-4510

Amy.Monroe@ky.gov

TABLE OF CONTENTS

Proposal Submission Checklist Section 1 – Summary Section 2 – Introduction Section 3 – Scope of Work Section 4 – Commonwealth Office of Technology Requirements Section 5 – Procurement Requirements and Instructions Section 6 – Proposal Submission Section 7 – Proposal Evaluation Section 8 – Negotiations Section 9 – Contract Requirements Section 10 – Standard Terms and Conditions Section 11 – Attachments

PROPOSAL SUBMISSION CHECKLIST

The vendor MUST include the following with the proposal submission.

Document Phase Document Description Page 4

2500000221 Final Pharmacy Benefits Manager (PBM) Total Pages: 44 mailto:Amy.Monroe@ky.gov

If the items highlighted below are not submitted with the proposal submission, the Commonwealth MUST deem the proposal non-responsive and SHALL NOT consider for award.

All other items MUST be submitted prior to award.

*PROPOSED TECHNICAL SOLUTION

*PROPOSED COST SOLUTION

TRANSMITTAL LETTER [See Section 6.7(A)]

REVENUE FORM 10A100 KENTUCKY TAX REGISTRATION APPLICATION IF

APPLICABLE (See Section 6.7 (C)], CERTIFICATE OF AUTHORITY- REGISTRATION WITH SECRETARY OF STATE

BY A FOREIGN ENTITY IF APPLICABLE [See Section 6.7 (D)]

REQUIRED ANNUAL AFFIDAVIT AND OTHER AFFIDAVIT(S)

https://finance.ky.gov/office-of-the-secretary/FinanceForms/Annual%20Required%20Affidavit %20for%20Bidders%20Offerors%20and%20Contractors.pdf

EEO FORMS IF APPLICABLE [See Section 10.19]

*Please see Attachment D - The Protection of Personal Information Security and Breach Investigation Procedures and Practice Act (KRS 61.931), et seq. effective January 1, 2015.

SECTION 1 - RFP SUMMARY

1.1 Estimated Schedule of RFP Activities

The following table presents the anticipated schedule for major activities associated with the RFP distribution, proposal submission, proposal evaluation process, and contract award. The Commonwealth reserves the right at its sole discretion to change the Schedule of Activities, including the associated dates and times.

Anticipated Schedule of Activities

Release of RFP Monday, February 10, 2025 Virtual Vendor’s Conference Thursday, February 13, 2025

1st Set of Vendors’ Written Questions due by 11:59

PM ET

Friday, February 14, 2025

(SUBMIT QUESTIONS ON ATTACHMENT A - VENDORS’ QUESTION FORM)

Commonwealth’s Response to 1st Set of Vendors’ Written Questions

Thursday, February 20, 2025

2nd Set of Vendors’ Written Questions due by 11:59

PM ET

Friday, March 7, 2025 Monday, February 24, 2025

(SUBMIT QUESTIONS ON ATTACHMENT A - VENDORS’ QUESTION FORM)

Document Phase Document Description Page 5

2500000221 Final Pharmacy Benefits Manager (PBM) Total Pages: 44 https://finance.ky.gov/office-of-the-secretary/FinanceForms/Annual%20Required%20Affidavit%20for%20Bidders%20Offerors%20and%20Contractors.pdf https://finance.ky.gov/office-of-the-secretary/FinanceForms/Annual%20Required%20Affidavit%20for%20Bidders%20Offerors%20and%20Contractors.pdf

Commonwealth’s Response to 2nd Set of Vendors’ Written Questions

Tuesday, March 13, 2025 Friday, February 28, 2025

Proposals Due By 3:30 PM ET Monday, March 31, 2025 Monday, March 17, 2025

1.2 Issuing Office

The Commonwealth of Kentucky, Finance and Administration Cabinet, Office of

Procurement Services, is issuing this RFP on behalf of the Personnel Cabinet, Department of Employee Insurance (DEI). The Finance and Administration Cabinet is the only office authorized to change, modify, amend, alter, or clarify the specifications, terms and conditions of this RFP.

A contract, based on this RFP, may or may not be awarded. Any contract award from this RFP is invalid until properly approved and executed by the Finance and Administration Cabinet.

1.3 Agencies to Be Served

This contract shall be for use by the Personnel Cabinet, Department of Employee

Insurance. No shipments shall be made except upon receipt by vendor of an official delivery order from the using agency.

Extending the Contract Use to Other Agencies The Office of Procurement Services reserves the right, with the consent of the vendor, to offer the Master Agreement resulting from this solicitation to other state agencies requiring the product(s) or service(s).

1.4 Virtual Vendor’s Conference

A virtual vendors conference will be held on Thursday, February 13, 2025, at 10:00 AM

ET.

Attendance is highly encouraged, as this will be the only opportunity to ask oral questions.

The Commonwealth shall not be bound by oral answers/oral statements made at the Vendors’ Conference. Salient questions asked at the Vendors’ Conference and the responses will be reduced to writing and issued in an Addendum.

All vendors wishing to participate in the virtual vendors conference are to email the Commonwealth Buyer at Amy.Monroe@ky.gov with Virtual Vendor’s Conference (RFP 758 2500000221) in the subject line. Instructions and additional information will be emailed to the participants.

SECTION 2 – INTRODUCTION

2.1 Purpose

The purpose of this Request for Proposal (RFP) is to solicit proposals for competitive negotiations pursuant to 200 KAR 5:307. The Commonwealth is seeking qualified Vendor(s) for pharmacy benefits management (PBM) and pharmacy claims administration on a self-funded basis effective January 1, 2026.

This RFP is being released in collaboration with the University of Kentucky for the Know.

Aon has been retained by Personnel to assist with the procurement process.

Document Phase Document Description Page 6

The Commonwealth is requesting proposals to secure competitive administration fees, provider contracts, prescription drug formulary and unit pricing, and services related to the management and administration PBM for KEHP members.

The Commonwealth is interested in receiving proposals from Vendors with proven experience in utilizing the most innovative, state-of-the-art services and technology available in the industry today to provide pharmacy services, but also to drive healthier behaviors and outcomes for members while minimizing healthcare costs. The goal is to obtain pharmacy benefit management services that are “Best in Class” and that provide a value-based health benefits program for its members.

The selected Vendor must be able to demonstrate the ability to process claims within plan designs that may include varying elements and programs, including Health Reimbursement Accounts with integrated medical/pharmacy plan deductibles, out-of-pocket maximums, and Flexible Spending Accounts. The ability to transfer claims information on a daily or real-time basis to other vendors for accumulation is desired. The ability to provide consumer service and education is also desired for all requested lines of services. The Technical Questionnaire in Attachment H will include specific questions about desired program elements.

The DEI administers the Public Employee Health Insurance Program (commonly known as and referred to herein as the Kentucky Employees’ Health Plan or KEHP). Pharmacy Benefit administration services for KEHP are currently provided by Anthem and CVS/ Caremark on an integrated basis for all KEHP members and dependents. KEHP has approximately 260,000 members comprised of active employees, retirees under age 65, COBRA participants, and their dependents. KEHP members participate in one of the following plans: the LivingWell CDHP, LivingWell PPO, and LivingWell Basic CDHP.

Further, the current PBM vendor for the Commonwealth facilitates secure data transfers as described in the KEHP Data Integration Chart, Attachment I.

Current elements of PBM services and programs offered by the incumbent PBM vendors include, but are not limited to, the following:

1. A transparent financial pricing arrangement from the PBM. “Transparency” refers to financial arrangements which represent a direct and complete pass-through of all elements of negotiated provider pricing (e.g., discounts & dispensing fees, etc.). The Commonwealth receives the full and complete amount of any discounts received by the PBM from any and all retail pharmacy transaction. The expectation is that the Vendor will not retain a differential (i.e., spread) between the amount reimbursed to the PBM for each transaction and the payments made to the retail pharmacies by the PBM, unless such differential is specifically contracted by the parties.

2. The Commonwealth receives all rebates attributable to the Commonwealth’s utilization that the PBM receives from any and all pharmaceutical manufacturers. A “rebate” includes any amounts received directly or indirectly by the PBM, regardless of title or description, whether by cash, credit or other in-kind methodologies attributable to utilization. Reimbursement for research projects based on data analysis not specifically attributable to the Commonwealth’s utilization data is not included in this requirement and may be retained by the PBM.

3. An annual market check based on the conditions outlined in contract, to be performed by the Commonwealth, or by a designated third-party vendor.

4. A comprehensive Kentucky-based and a nationwide pharmacy provider network.

5. Telemedicine support to members with diabetes, including remote clinical support and monitoring. The program uses multiple data elements and analytics integrated

Document Phase Document Description Page 7 by local care, including retail pharmacists, and health alert communications. The program includes monitoring blood glucose, managing lifestyle and comorbidity, preventive screenings, tracked adherence to medication schedules, and clinical follow up to confirm member is taking the correct medication.

6. A near-real-time data feed for all KEHP claims to a third-party payment integrity auditor, with collaborative investigation and follow-up for any identified issue, including corrections and credits as applicable.

7. An operational license as a third-party administrator with the Kentucky Department of Insurance (DOI) and maintain such license throughout the initial contract period and any subsequent renewal period.

Coverage Period

All services covered in this RFP will be effective for an initial term from January 1, 2026, through December 31, 2028 (3-year contract or 36 months). For purposes of renewal, the renewal effective date will be January 1 of each year. At the discretion of the Commonwealth, the contract may be extended for four (4) additional two (2) year renewal periods provided:

1. The Vendor’s provider network continues to meet expected minimum thresholds;

2. The Commonwealth continues to self-fund the health benefit plan;

3. The administrative costs and net pricing are reasonable, in the sole and independent determination of the Commonwealth; and

4. The Vendor meets any Kentucky Department of Insurance (DOI) financial stability criteria.

2.2 Background

KEHP is a self-funded, non-grandfathered, government cafeteria plan for the benefit of eligible public employees that covers approximately 290,000 lives. The KEHP population is divided between the following population categories, as of October 2024:

1. Employees and elected members of Kentucky boards of education – 57%

2. Commonwealth of Kentucky agency employees – 19%

3. Kentucky Public Pensions Authority and Kentucky Teachers Retirement System retirees who are under age sixty-five – 20%

4. Employees of other governmental agencies and health departments that participate in a retirement system administered by the Commonwealth – 4%

In KEHP’s plan year 2023, employee and employer contributions totaled over $1.58 Billion, and medical and prescription drug claims costs exceeded $2.0 Billion, of which over $726 Million was prescription drug spend. Similar experience is expected for plan year 2024.

The relationship between the PBM and the Coalition is expected to be symbiotic. The Coalition provides valuable feedback to the PBM and their clients based on routine, recurring review of claims data. The team of pharmacists work at a very granular level and need full cooperation of the PBM to provide proper access to PBM operational details to provide this high-level member service. This includes a requirement for flexibility outside of PBM standard offerings to allow the Coalition to provide their services.

SECTION 3 – SCOPE OF WORK

Document Phase Document Description Page 8

3.1 Scope of Work

PROPOSALS THAT DO NOT MEET THE MANDATORY REQUIREMENTS

OUTLINED IN ATTACHMENT F – MANDATORY REQUIREMENTS

CHECKLIST, WILL BE DEEMED NON-RESPONSIVE AND ELIMINATED

FROM FURTHER CONSIDERATION.

Mandatory Requirement means a condition set out in the specifications or statement of work that must be met without exception.

A. Technical Requirements All questions regarding technical capabilities for this RFP are covered in the Technical Questionnaire, Attachment H and are incorporated herein by reference.

B. Mandatory Requirements

Vendor shall agree to all mandatory requirements to be eligible for selection under this RFP – see warning statement for Section 3, above. The mandatory requirements provided as a checklist in Attachment F are incorporated herein by reference, and include without limitation the following:

1. Vendor shall provide the required certification and attestation documents i.e., financial statements, certificates, affidavits as requested per the Proposal submission checklist within Attachment A.

2. Vendor shall comply with all federal laws and all state requirements as applicable to the Kentucky Employees' Health Plan (KEHP).

3. Vendor shall confirm that the Pharmacy Benefit Manager (PBM) has been operating as a PBM for a minimum of five (5) years.

4. Vendor shall confirm that the respondent has either (1) collectively 450,000 or more covered lives nationwide currently receiving Network and Claims administration; and has at least one client with 100,000 or more lives or (2) collectively 1,000,000 or more covered lives nationwide currently recieving Network and Claims administration and has at least one client with 50,000 or more lives.

5. Vendor shall allow KEHP to remove drugs from the respondent’s standard formulary.

6. Vendor shall allow KEHP to create custom Prior Authorization criteria, quantity limits, step therapy criteria as well as CEM overrides directed to KEHP for internal review.

7. Vendor shall grant KEHP staff access as well as in real time edit rights within respondent’s client website i.e., the ability to enter edits directly into the respondent’s claim and eligibility systems.

8. Vendor shall provide KEHP a dedicated account team to address service-related issues and client specific pharmacy benefit needs.

9. Vendor shall allow KEHP unlimited data file feeds to third party vendors at no additional charge.

Document Phase Document Description Page 9

10. Vendor shall allow KEHP to change data fields/layout/files to meet state and federal requirements, new vendor program implementations and data warehouse needs at no additional charge.

SECTION 4 – COMMONWEALTH OFFICE

OF TECHNOLOGY (COT) REQUIREMENTS

This section has been intentionally left blank, as it is not applicable to this procurement.

SECTION 5 – PROCUREMENT REQUIREMENTS AND INSTRUCTIONS

5.1 Procurement Requirements

Procurement requirements are listed under “Procurement Laws, Preference, Regulations and Policies” and “Response to Solicitation” located on the eProcurement Web page at https://finance.ky.gov/eProcurement/Pages/procurement-laws-regulations-and-policies.aspx and https://finance.ky.gov/eProcurement/Pages/doing-business-with-the-commonwealth.aspx respectively. The vendor must comply with all applicable statutes, regulations and policies related to this procurement.

5.2 Access to Solicitation, RFP, and Addenda

The Commonwealth wants each prospective vendor to have full and complete information on which to base a proposal response. Only information presented or referred to in this RFP and any additional written information that is supplied by the Commonwealth Buyer shall be used by vendors in preparing the response.

The solicitation, addenda, and attachments shall be posted to the Kentucky Vendor Self Service link at https://emars311.ky.gov/webapp/vssprdonline3111d/AltSelfService

It is not necessary to register to access the solicitation. Unregistered vendors can access solicitations by clicking on public access.

In the event of any conflict or variation between the solicitation or modification as issued by the Commonwealth and the vendor’s response, the version as issued shall prevail.

5.3 RFP Terminology

For the purpose of this RFP, the following terms may be used interchangeably:

- Proposer, Offeror, Contractor, Provider, or Vendor

- Commonwealth Buyer, Buyer, Purchaser, or Contract Officer

- RFP, Solicitation, or Procurement

- Bid, Proposal, or Offer

- Commonwealth of Kentucky, Commonwealth, or State, Agency, Personnel, PERS, DEI, or KEHP

- Fiscal Year will be defined as the Commonwealth fiscal year: July 1 through June

- Biennium will be defined as the Commonwealth biennium: July 1 of each even numbered year through June 30 of the next even numbered year

Document Phase Document Description Page 10

2500000221 Final Pharmacy Benefits Manager (PBM) Total Pages: 44 https://finance.ky.gov/eProcurement/Pages/procurement-laws-regulations-and-policies.aspx https://finance.ky.gov/eProcurement/Pages/doing-business-with-the-commonwealth.aspx https://emars311.ky.gov/webapp/vssprdonline3111d/AltSelfService

- Requirements that include the words “Shall”, “Will”, “Must” indicate a mandatory requirement

- Mandatory Requirement means a condition set out in the specifications or statement of work that must be met without exception.”

5.4 Restrictions on Communications

The Commonwealth Buyer named on the Cover Sheet of this RFP shall be the sole point of contact throughout the procurement process. All communications, oral and written (regular, express, or electronic mail,), concerning this procurement shall be addressed to the Buyer.

For violation of this provision, the Commonwealth shall reserve the right to disqualify the vendors’ proposal response.

5.5 Confidentiality of Contract Terms

The contractor and the Commonwealth agree that all information communicated between them before the effective date of the contract shall be received in strict confidence and shall not be necessarily disclosed by the receiving party, its agents, or employees without prior written consent of the other party. Such material will be kept confidential subject to Commonwealth and Federal public information disclosure laws.

Upon signing of the contract by all parties, terms of the contract become available to the public, pursuant to the provisions of the Kentucky Revised Statutes.

The contractor shall have an appropriate agreement with its subcontractors extending these confidentiality requirements to all subcontractors’ employees.

5.6 Written Questions Regarding this RFP

Vendors are encouraged to submit written questions pursuant to Section 1.1 of this

RFP. Written questions shall be submitted to the Commonwealth Buyer via email at Amy.Monroe@ky.gov. Vendors should submit questions on Attachment A - Vendors Question Form. No questions shall be accepted after the date(s) listed in Section 1.1 unless the question(s) is considered material to the procurement. The Commonwealth shall respond to salient questions in writing by issuing an addendum to the solicitation.

The addendum shall be posted to the Kentucky Vendor Self Service site.

5.7 Vendor Response and Proprietary Information

The RFP specifies the format, required information, and general content of proposals submitted in response to the RFP. The Finance and Administration Cabinet will not disclose any portions of the proposals prior to Contract Award to anyone outside the Finance and Administration Cabinet, representatives of the agency for whose benefit the contract is proposed, representatives of the Federal Government, if required, and the members of the evaluation committees. After a contract is awarded in whole or in part, the Commonwealth shall have the right to duplicate, use, or disclose all proposal data submitted by vendors in response to this RFP as a matter of public record. Although the Commonwealth recognizes the vendor's possible interest in preserving selected data which may be part of a proposal, the Commonwealth must treat such information as provided by the Kentucky Open Records Act, KRS 61.870 et sequitur.

Informational areas which normally might be considered proprietary shall be limited to individual personnel data, customer references, selected financial data, formulae, and financial audits which, if disclosed, would permit an unfair advantage to competitors. If a proposal contains information in these areas that a vendor declares

Document Phase Document Description Page 11 mailto:Amy.Monroe@ky.gov proprietary in nature and not available for public disclosure, the vendor should declare in the Transmittal Letter [see Section 6.7 (A)] the inclusion of proprietary information and shall noticeably label as proprietary each file containing such information.

Proprietary information shall be submitted separately and identified as “Proprietary Data”. Proposals containing information declared by the vendor to be proprietary, either in whole or in part, outside the areas listed above may be deemed non-responsive to the RFP and may be rejected.

5.8 Notification of Award of Contract

The procurement process will provide for the evaluation of proposals and selection of the successful proposal in accordance with State law and regulations. KRS Chapter 45A of the Kentucky Model Procurement Code provides the regulatory framework for the procurement of services by State agencies.

All applicable statutes, regulations, policies and requirements shall become a part of an award as well as the Information Technology requirements.

For additional award information, vendors may email the Commonwealth Buyer.

5.9 Protest

Pursuant to KRS 45A.285, the Secretary of the Finance and Administration Cabinet, or his designee, shall have authority to determine protests and other controversies of actual or prospective offerors in connection with the solicitations or selection for award of a contract.

Any actual or prospective offeror or contractor, who is aggrieved in connection with solicitation or selection for award of a contract, may a file protest with the Secretary of the Finance and Administration Cabinet. A protest or notice of other controversy must be filed promptly and in any event within two (2) calendar weeks after such aggrieved person knows or should have known of the facts giving rise thereto. All protests or notices of other controversies must be in writing and shall be addressed and mailed to:

Holly M. Johnson, Secretary

COMMONWEALTH OF KENTUCKY

FINANCE AND ADMINISTRATION CABINET

200 MERO STREET, 5TH FLOOR

FRANKFORT, KY 40622

The Secretary of Finance and Administration Cabinet shall promptly issue a decision in writing. A copy of that decision shall be mailed or otherwise furnished to the aggrieved party and shall state the reasons for the action taken.

The decision by the Secretary of the Finance and Administration Cabinet shall be final and conclusive.

5.10 Vendor Notification – Ineligible for Award

The Commonwealth will not consider or evaluate any proposal submitted by a vendor when the vendor, the vendor’s employees or agents, had any involvement, contribution or participation in the development, preparation or review of this RFP prior to its issuance.

The vendors proposal will be deemed ineligible for award.

5.11 Past Vendor Performance

Document Phase Document Description Page 12

Past vendor performance may be considered in the award of this Contract. Vendors with a record of poor performance in the last twelve (12) months may be found non-responsible and ineligible for award.

SECTION 6 – PROPOSAL SUBMISSION

6.1 Disposition of Proposals

All proposals become the property of the Commonwealth of Kentucky. The successful proposal shall be incorporated into the resulting contract by reference. Disposal of unsuccessful proposals shall be at the discretion of the Commonwealth Buyer.

6.2 Rules for Withdrawal of Proposals

Prior to the date specified for receipt of offers, a submitted proposal may be withdrawn by electronic or written notice by submitting a signed written request for its withdrawal to the Commonwealth Buyer.

6.3 Commonwealth’s Right to Use Proposal Ideas

The Commonwealth of Kentucky shall have the right to use all system ideas, or adaptations of those ideas, contained in any proposals received in response to the RFP.

Selection or rejection of the proposal will not affect this right.

6.4 Submission of RFP Response

Each qualified offeror shall submit only one (1) proposal. Alternate proposals shall not be allowed. Failure to submit as specified shall result in a non-responsive proposal.

Acknowledgment of Addenda It is the vendor's responsibility to check the web site for any modifications to this solicitation.

Failure to specifically acknowledge addenda with submission will not excuse the vendor from adhering to all changes to the requirements of the solicitation set forth therein nor provide justification for any pricing changes.

6.5 Electronic Proposal Submission

Proposals shall be received by electronic submission in the eProcurement system.

An electronic proposal shall be authorized by the proper agent of the firm by the act of submitting it electronically through the eProcurement system.

Proposal information MUST be completed online. Response must contain all required information for the Solicitation. All bidders MUST be registered in the Commonwealth eProcurement System via the Vendor Self Service System at https://emars311.ky.gov/ webapp/vssprdonline3111d/AltSelfService

Allow 24 – 48 hours to complete Vendor Registration. Vendors must be logged in to their Vendor Self Service (VSS) account in order to submit a response. Registrations completed the day of bid closing must be completed by the Vendor in the VSS portal.

The Customer Resource Center is not able to complete registrations and activate accounts on the same day. Closing dates will not be extended for Vendors not registered by the date/time of the bid closing. Vendor Self Service Registration Guides are provided at https://finance.ky.gov/eProcurement/ResourcesSupport/How%20to%20Respond %20to%20Online%20Bid%20through%20Kentucky%20Vendor%20Self%20Service.pdf

Document Phase Document Description Page 13

2500000221 Final Pharmacy Benefits Manager (PBM) Total Pages: 44 https://emars311.ky.gov/webapp/vssprdonline3111d/AltSelfService https://emars311.ky.gov/webapp/vssprdonline3111d/AltSelfService https://finance.ky.gov/eProcurement/ResourcesSupport/How%20to%20Respond%20to%20Online%20Bid%20through%20Kentucky%20Vendor%20Self%20Service.pdf https://finance.ky.gov/eProcurement/ResourcesSupport/How%20to%20Respond%20to%20Online%20Bid%20through%20Kentucky%20Vendor%20Self%20Service.pdf

All bidders are cautioned to begin their electronic submission in sufficient time to complete before the closing date and time. Delays due to technical difficulties or document upload impediments shall not be justification for acceptance of a late bid or proposal. Vendor attention to this advisory is encouraged. If you need assistance, please contact the Customer Resource Center (CRC) by email at Finance.CRCGroup@ky.gov or phone 502-564-9641 or toll-free 877-973-HELP (4357).

Proposals shall be submitted in three (3) parts: The Technical Proposal, the Cost Proposal, and Proprietary Information. Each part shall consist of one document attachment. Do not submit multiple document attachments as Technical, Cost or Proprietary. All files shall be labeled accordingly. Attachments may not exceed 65,000 KB.

Proposals submitted online must be in an “Accepted” status and shall be assigned a date and time stamp from the eProcurement system at the time of final acceptance and formal submission by the vendor. The system will not allow submission of an online proposal after the published date and time for closing.

A proposal may be modified or withdrawn by electronic or written notice ONLY if received prior to the bid closing date and time. An electronic offer may be modified by applying the appropriate electronic signature and following the procedure in the state’s eProcurement signature.

6.6 Format of Response

Proposals shall be submitted in three (3) parts: the Technical Proposal, the Cost

Proposal, and Proprietary Information. Each part shall consist of one document. Do not submit multiple documents as Technical, Cost or Proprietary.

Proposals must be submitted electronically in the eProcurement System.

a. The Technical Proposal shall be submitted on one (1) document marked Technical (in Microsoft Word, Microsoft Excel or PDF format ONLY). Do not include embedded documents, hyperlinks or hyperlinks to videos. The document should be named in the following manner: Technical – Name of offeror RFP number

b. The Cost Proposal shall be submitted on one (1) document marked Cost (in

Microsoft Word, Microsoft Excel or PDF format ONLY). Do not include embedded documents, hyperlinks or hyperlinks to videos. The document should be named in the following manner: Cost – Name of offeror RFP number

c. Any Proprietary Information shall be submitted on one (1) document marked

Proprietary (in Microsoft Word, Microsoft Excel or PDF format ONLY). Do not include embedded documents, hyperlinks or hyperlinks to videos. The document should be named in the following manner: Proprietary – Name of offeror RFP number

Pricing shall only be provided in the Cost Proposal. DO NOT SUBMIT ANY

PRICING INFORMATION IN THE TECHNICAL PROPOSAL.

All submitted Technical and Cost Proposals shall remain valid for a minimum of six (6) months after the proposal due date.

Document Phase Document Description Page 14 mailto:Finance.CRCGroup@ky.gov

6.7 Technical Proposal Content

A. Transmittal Letter The transmittal letter shall be on the vendor’s letterhead, and signed by an agent authorized to bind the vendor. The transmittal letter shall include the following:

i. A statement that deviations are included, if applicable. Proposed deviations must be outlined in the transmittal letter. Any deviation from the provisions of the solicitation must be specifically identified by the vendor in its proposal, which if successful, shall become part of the contract. Such deviations shall not be in conflict with the basic nature of this solicitation.

The Commonwealth reserves the right to reject any and/or all deviations in whole or in part.

ii. A statement that, if awarded a contract as a result of this solicitation, the vendor shall comply in full with all requirements of the Kentucky Civil Rights Act, and shall submit all data required by KRS 45.560 to 45.640;

iii. A statement pursuant to KRS 11A.040 that the vendor has not knowingly violated any provisions of the Executive Branch Code of Ethics;

iv. A statement of that the vendor is in compliance with Prohibitions of Certain Conflicts of Interest;

v. A statement of certification in accordance with Federal Acquisition Regulation 52.209-5, Certification Regarding Debarment, Suspension, and Proposed Debarment that to the best of its knowledge and belief, the vendor and/or its principals is (are) not presently debarred, suspended, proposed for debarment, or declared ineligible for the award of contracts by any State or Federal agency.

vi. The name, address, telephone number, and email address of the contact person for this RFP. The address shall be one in which the major overnight delivery services will deliver.

vii. The name, address, telephone number, and email address of the contact person to serve as a point of contact for day-to-day operations.

viii. Subcontractor information to include name of company, address, telephone number and contact name, if applicable.

ix. Federal Tax ID

x. A statement that the vendor agrees to comply with items included in the Mandatory Checklist, if applicable.

B. Disclosure of Violation of Statutes Pursuant to KRS 45A.485, contractors are required to reveal final determinations of violation of certain statutes incurred within the last five (5) years and be in continuous compliance with those statutes during the contract. Where applicable, the vendor is required to complete and submit Report of Prior Violations of Tax and Employment Laws.

C. Kentucky Tax Registration Application

Revenue Form 10A100, Kentucky Tax Registration Application effective July 2008, is a form to be completed by any person or entity wishing to contract with the Commonwealth to provide goods or services subject to sales and use tax pursuant to KRS 139.200.

https://finance.ky.gov/eProcurement/Pages/doing-business-with-the-commonwealth.aspx

In accordance with administrative regulation 200 KAR 5:390, this form has to be completed and submitted, before a contract can be awarded. Section 2 of the regulation also notes: “Failure to submit the required documentation or to remain

Document Phase Document Description Page 15 https://finance.ky.gov/eProcurement/Pages/doing-business-with-the-commonwealth.aspx registered and in compliance with the sales and use tax filing and remittance requirements of KRS 139.540 and KRS 139.550 throughout the duration of the contract shall constitute a material breach of the contract and the contract may be terminated.”

D. Registration with the Secretary of State by a Foreign Entity Pursuant to KRS 45A.480(1)(b), an agency, department, office, or political subdivision of the Commonwealth of Kentucky shall not award a state contract to a person that is a foreign entity required by KRS 14A.9-010:

to obtain a certificate of authority to transact business in the Commonwealth (“certificate”) from the Secretary of State under KRS 14A.9-030: https:// apps.legislature.ky.gov/law/statutes/statute.aspx?id=40424 therefore, foreign entities should submit a copy of their certificate with their solicitation response.

If the foreign entity is not required to obtain a certificate as provided in KRS 14A.9-010: https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=44318, the foreign entity should identify the applicable exception in its solicitation response.

Foreign entity is defined within KRS 14A.1-070:

https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=50474

Businesses can register with the Secretary of State at:

https://www.sos.ky.gov/bus/business-filings/Pages/default.aspx

E. Required Annual Affidavit and Other Affidavit(s)

F. EEO Forms if applicable (see Section 10.19)

G. Proposed Solution (see Section 6.8)

6.8 Proposed Solution Content

Response should be based on the RFP requirements and should include the following:

A. General Vendor Information Provide a response to or supply the requested information for each of the following in the format provided in Attachment H:

B. Compliance/Regulatory/Vendor Oversight Provide a response to or supply the requested information for each of the following in the format provided in Attachment H:

C. Plan Design and Eligibility Provide a response to or supply the requested information for each of the following in the format provided in Attachment H:

D. Performance Guarantees Provide a response to or supply the requested information for each of the following in the format provided in Attachment H:

E. Customer Service and Client Service Provide a response to or supply the requested information for each of the following in the format provided in Attachment H:

F. Clinical Programs and Quality Provide a response to or supply the requested information for each of the following in the format provided in Attachment H:

Document Phase Document Description Page 16

2500000221 Final Pharmacy Benefits Manager (PBM) Total Pages: 44 https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=40424 https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=40424 https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=44318 https://www.sos.ky.gov/bus/business-filings/Pages/default.aspx

G. Implementation Support Provide a response to or supply the requested information for each of the following in the format provided in Attachment H:

DO NOT INCLUDE ANY COST IN THE TECHNICAL RESPONSE. COST

SHOULD BE SUBMITTED SEPARATELY

6.9 Cost Proposal Content

The vendor should provide its costs for the proposed solution as instructed on the Cost

Proposal Form. (see Attachment B).

The Commonwealth of Kentucky is Tax Exempt. Do not include Federal Excise Tax, Kentucky Sales or Use Tax in proposed costs.

Costs for developing the proposals are solely the responsibility of the offerors. The Commonwealth of Kentucky shall not provide any reimbursements for such costs.

A proposal shall not be considered for award if the price in the proposal was not arrived at independently without collusion, consultation, communication, or agreement as to any matter relating to such prices with any other offeror or with any competitor. In addition, the offeror is prohibited from making multiple proposals in a different form.

Should conflict of interest be detected any time during the contract, the contract shall be null and void and the contractor shall assume all costs of this project until such time that a new contractor is selected.

SECTION 7 – PROPOSAL EVALUATION

7.1 Proposal Evaluation

The Commonwealth shall conduct a comprehensive, fair, and impartial evaluation of all proposals. The Commonwealth may reject any proposal that is incomplete or in which there are significant inconsistencies or inaccuracies. The Commonwealth reserves the right to reject all proposals.

The Commonwealth has established a Proposal Evaluation Committee to review, evaluate and verify information submitted by the offeror.

Each vendor is responsible for submitting all relevant, factual, and correct information with their offer to enable the evaluator(s) to afford each vendor the maximum score based on the available data submitted by the vendor.

The Commonwealth shall evaluate the proposals by assigning scores as indicated.

7.2 Technical Proposal Evaluation

Criteria Maximum Points Possible General Vendor Information (Section 6.8.A)

Compliance/Regulatory/Vendor Oversight (Section 6.8.B)

1,750

Plan Design and Eligibility (Section 6.8.C)

1,500

Document Phase Document Description Page 17

Performance Guarantees (Section 6.8.D)

Customer Service and Client Service (Section 6.8.E)

Clinical Programs and Quality (Section 6.8.F)

Implementation Support (Section 6.8.G)

Maximum Points Possible 4,500

7.3 Cost Proposal Evaluation

Proposed Cost 5,500 Maximum Points Possible 5,500

The scoring of bids/proposals is subject to the reciprocal preference for Kentucky resident bidders and preferences for a Qualified Bidder or the Department of Corrections, Division of Prison Industries (See KRS 45A.490(1), (2), 45A.492, 45A.494 and KAR 200 5:410).

7.4 Oral Demonstration/Presentation Evaluation, if required

Criteria Maximum Points Possible Oral Presentations/Demonstrations

The Commonwealth reserves the right to require Oral Presentations/Demonstrations to verify or expand on the Technical or Cost Proposals. Oral Presentations/ Demonstrations may be conducted through video-conferencing or by conference call, if it is in the best interest of the Commonwealth to do so. This is the opportunity for the vendor to present and demonstrate the solution and to answer questions or to clarify the understanding of the evaluation committee in accordance with the requirements of this RFP. The Commonwealth reserves the right to reject any or all proposals in whole or in part based on the oral presentations/ demonstrations.

If required, the highest-ranking vendors may be invited. Scheduling will be at the discretion of the Commonwealth. The Commonwealth reserves the right not to require oral presentations/demonstrations

2,000

Maximum Points Possible 2,000

7.5 Best and Final Offer (BAFO)

In accordance with FAP 111-57-00 (3) (h), the Commonwealth reserves the right to request Best and Final Offers (BAFO).

7.6 Total Proposal Evaluation

Document Phase Document Description Page 18

Technical Proposal 4,500 Cost Proposal 5,500 Oral Demonstrations/Presentations, if required

2,000

Maximum Points Possible 12,000

SECTION 8 – NEGOTIATIONS

The Commonwealth reserves the right pursuant to KRS 45A.085 to negotiate a contract with the top-ranked vendor. In the event the Commonwealth cannot reach agreement with the top-ranked vendor, it may proceed to negotiate with the next highest ranked vendor, and so on. It is the Commonwealth’s intent to award a contract to the vendor with whom successful negotiations are completed.

Terms and conditions that may be negotiated at the sole discretion of the Commonwealth include but are not limit to issues related to the Technical and/or Cost Proposals.

SECTION 9 – CONTRACT REQUIREMENTS AND PROVISIONS

9.1 Agencies to Be Served

This contract shall be for use by All State Agencies. No shipments shall be made except upon receipt by vendor of an official delivery order from the using agency.

Political Subdivisions

Under Kentucky Statutes, political subdivisions of this State including cities of all classes, counties, and school districts may participate in All State Agency Master Agreements to the same extent as agencies of the Commonwealth.

9.2 Term of Contract and Renewal Options

The initial term of the contract shall be for a period of three (3) years from the effective date of the Award of Contract.

This contract may be renewed at the completion of the initial contract period for four (4) additional two (2) year periods upon the mutual agreement of the Parties. Such mutual agreement shall take the form of a contract modification as described in Section 10.7 of this RFP.

At the end of the contract, the vendor shall provide all agency data in a form that can be converted to any subsequent system of the agency’s choice. The vendor shall cooperate to this end with the vendor of the agency’s choice, in a timely and efficient manner.

The Commonwealth reserves the right not to exercise any or all renewal options. The Commonwealth reserves the right to extend the contract for a period less than the length of the above-referenced renewal period if such an extension is determined by the Commonwealth Buyer to be in the best interest of the Commonwealth.

The Commonwealth reserves the right to renegotiate any terms and/or conditions as may be necessary to meet requirements for the extended period. In the event proposed revisions cannot be agreed upon, either party shall have the right to withdraw without

Document Phase Document Description Page 19 prejudice from either exercising the option or continuing the contract in an extended period.

9.3 Basis of Price Revisions

PRICE ADJUSTMENTS: Unless otherwise specified, the prices established by the contract resulting from this solicitation shall remain firm for the contract period subject to the following:

A. Price Increases: A price increase shall not occur during the first twelve (12) months of the contract. A vendor may request a price increase after twelve (12) months of the contract, which may be granted or denied by the Commonwealth. Any such price increase shall be based on industry wide price changes. The contract holder must request in writing a price increase at least thirty (30) days prior to the effective date, and shall provide firm proof that the price increase(s) is justified. The Office of Procurement Services may request additional information or justification. If the price increase is denied, the contract holder may withdraw from the contract without prejudice upon written notice and approval by the Office of Procurement Services.

Provided, however, that the vendor must continue service, at the contract prices, until a new contract can be established (usually within sixty (60) days).

B. Price Decreases: The contract price shall be reduced to reflect any industry wide price decreases. The contract holder is required to furnish the Office of Procurement Services with notice of any price decreases as soon as such decreases are available.

C. Extended Contract Periods: If the contract provides for an optional renewal period, a price adjustment may be granted at the time the contract is renewed, subject to price increase justification as required in Paragraph A “Price Increases” as stated above.

9.4 Notices

After the award of contract, all programmatic communications with regard to day-to-day performance under the contract are to be made to the agency technical contact(s) identified during the negotiation phase of this procurement. After the award of contract, all communications of a contractual or legal nature are to be made to the Commonwealth Buyer.

9.5 Subcontractors

The contractor is permitted to make subcontract(s) with any other party for furnishing any of the work or services herein. The contractor shall be solely responsible for performance of the entire contract whether or not subcontractors are used. The Commonwealth shall not be involved in the relationship between the prime contractor and the subcontractor.

Any issues that arise as a result of this relationship shall be resolved by the prime contractor. All references to the contractor shall be construed to encompass both the contractor and any subcontractors of the contractor.

SECTION 10 – STANDARD TERMS AND CONDITIONS

10.1 Contract Components and Order of Precedence

The Commonwealth’s acceptance of the contractor’s offer in response to the solicitation, indicated by the issuance of a contract award by the Office of Procurement Services, shall create a valid contract between the Parties consisting of the following:

1. Procurement Statutes, Regulations and Policies

Document Phase Document Description Page 20

2. Any written Agreement between the Parties;

3. Any Addenda to the Solicitation;

4. The Solicitation and all attachments

5. Any Best and Final Offer;

6. Any clarifications concerning the Contractor’s proposal in response to the

Solicitation;

7. The Contractor’s proposal in response to the Solicitation.

In the event of any conflict between or among the provisions contained in the contract, the order of precedence shall be as enumerated above.

10.2 Final Agreement

The contract represents the entire agreement between the parties with respect to the subject matter hereof. Prior negotiations, representations, or agreements, either written or oral, between the parties hereto relating to the subject matter hereof shall be of no effect upon this contract.

10.3 Contract Provisions

If any provision of this contract (including items incorporated by reference) is declared or found to be illegal, unenforceable, or void, then both the Commonwealth and the contractor shall be relieved of all obligations arising under such provision. If the remainder of this contract is capable of performance, it shall not be affected by such declaration or finding and shall be fully performed.

10.4 Type of Contract

The contract shall be on the basis of a firm fixed unit price for the elements listed in this solicitation. This solicitation is specifically not intended to solicit proposals for contracts on the basis of cost-plus, open-ended rate schedule, nor any non-fixed price arrangement.

10.5 Contract Usage

As a result of this RFP, the contractual agreement with the selected vendor will in no way obligate the Commonwealth of Kentucky to purchase any services or equipment under this contract.