Title: Benefits Vendor Procurement and RFPs
Source: https://ethosbenefits.com/services/procurement
Publisher: Ethos Benefits
Summary: Ethos Fiduciary Procurement is how Ethos Benefits runs RFPs for PBMs, TPAs, stop-loss and other plan vendors, scores every bid and negotiates the contract.

1.  [Home](https://ethosbenefits.com/)
2.  [Services](https://ethosbenefits.com/services)
3.  Procurement and contracts.

# Procurement and contracts. Every vendor, scored and on the record.

Your plan's vendors decide most of what it costs. Ethos Fiduciary Procurement is how we choose them: a standardized RFP, every bid scored on its answers and on its contract terms, the contract negotiated before anything is signed, and the vendor measured against its promises every quarter, all documented for your committee.

[Request a Strategic Analysis](https://ethosbenefits.com/strategic-analysis)

## What you get.

Most vendor decisions are made by comparing renewal quotes, and the contract is signed as written. The contract is where the vendor's incentives and your plan's protections are actually set.

1.  **Requirements set with your committee** What the plan needs from the vendor, what it must not do, and how bids will be weighted, agreed before any vendor is contacted.
2.  **A standardized RFP** Every bidder answers the same scored questions and responds to the same contract terms, so the bids can be compared fairly.
3.  **Weighted scoring** Answers and contract terms are scored separately and then combined, using weights your committee sets in advance.
4.  **Negotiation and redlines** The finalist contract marked up clause by clause, with the plan-protective language to negotiate and the reason for each change.
5.  **Implementation** File feeds, data access, communications and transition of care handled so the change is invisible to employees where it should be.
6.  **Ongoing monitoring** Each vendor scored against its contract every quarter, with service levels and performance guarantees reconciled.

## The seven _steps._

| Step | What happens | What your committee gets |
| --- | --- | --- |
| **1\. Requirements** | Your plan’s needs, limits and scoring weights, agreed with the committee | A written scope for the RFP |
| **2\. RFP** | A standardized questionnaire and the contract terms, sent to qualified bidders | One comparable set of answers |
| **3\. Scoring** | Answers and contract terms scored separately, then combined | A ranked evaluation report |
| **4\. Finalists** | Follow-up questions, references and contract positions | A short list with the trade-offs |
| **5\. Negotiation** | The chosen vendor’s contract redlined and negotiated | Plan-protective terms, in writing |
| **6\. Implementation** | Data, file feeds, communications and transition | A clean start date |
| **7\. Monitoring** | Service levels and guarantees measured every quarter | A scorecard in every committee meeting |

## How bids _are scored._

A vendor can answer every question well and still offer a contract that protects itself instead of your plan. So the questionnaire and the contract are scored separately.

In a recent PBM procurement, seven PBMs answered 43 questions across 11 topic areas and responded to 29 contract terms. Each answer was scored from 1 to 5 and weighted by topic, and the overall score blended the questionnaire (60%) with the contract terms (40%). The weights change with your plan’s priorities. The method doesn’t.

## What it _covers._

-   [Pharmacy and PBM](https://ethosbenefits.com/services/pharmacy-pbm)
-   [Stop-loss procurement](https://ethosbenefits.com/services/stop-loss)
-   [TPA and administrative contracts](https://ethosbenefits.com/services/tpa-procurement)
-   [Vendor management and service levels](https://ethosbenefits.com/services/vendor-management)
-   [Life, disability and absence benefits](https://ethosbenefits.com/services/ancillary-benefits)
-   [Cost containment and direct contracts](https://ethosbenefits.com/services/cost-containment)

## Why it _matters._

Choosing and monitoring service providers is one of a plan fiduciary’s core duties, and ERISA judges it on process. A scored, documented procurement is the record that shows your committee chose prudently and paid only reasonable fees. [Read what the duty requires](https://ethosbenefits.com/fiduciary).

## Part of your Fiduciary Framework™.

Every Ethos service reports to your benefits committee. The work is reviewed at your quarterly committee meeting, each decision is recorded with the reasoning behind it, and the record lives in your Ethos Fiduciary OS. That is what lets your committee show the plan was run prudently.

[See the Fiduciary Framework™](https://ethosbenefits.com/fiduciary-framework) · [How fiduciary governance works](https://ethosbenefits.com/services/fiduciary-governance)

## Related reading.

-   [**How to choose a PBM** Benefits 101: How employers choose a good pharmacy benefit manager: the PBM contract terms to check, questions to ask, red flags, and the steps of a PBM RFP.](https://ethosbenefits.com/benefits-101/how-to-choose-a-pbm)
-   [**Third party administrator** Benefits 101: What a third party administrator does for a self-funded health plan, ASO vs independent TPAs, what to check in a TPA contract, and how a TPA differs from a PBA.](https://ethosbenefits.com/benefits-101/third-party-administrator)
-   [**How much does stop-loss insurance cost?** Benefits 101: Stop-loss insurance has no list price. See what sets the premium, from the deductible and contract basis to claims and lasers, and how employers lower it.](https://ethosbenefits.com/benefits-101/stop-loss-insurance-cost)
-   [**Broker compensation disclosure** Benefits 101: What the CAA's broker compensation disclosure rule requires, which brokers and consultants must disclose, the deadlines, and what to ask your broker.](https://ethosbenefits.com/benefits-101/broker-compensation-disclosure)

[Browse everything in Learn](https://ethosbenefits.com/learn)

## Questions employers ask about this.

How long does procurement take?

For a renewal, Ethos starts marketing at least six months before the effective date, so there is time to score bids, negotiate the contract and implement without rushing. A single-vendor review can run at any point in the year.

Do we have to change vendors?

No. Often the best result is a better contract with the vendor you already have. Procurement gives your committee the evidence to decide either way, and the reasoning is recorded.

What does our committee receive?

An evaluation report with every bidder ranked, the scores behind the ranking, the contract terms each bidder accepted or rejected, and a recommendation, plus the redlined contract for the vendor you choose.

Which vendors does it cover?

PBMs, third-party administrators, stop-loss carriers, direct contracts and specialty health programs, and life, disability, absence, dental, vision and voluntary carriers.

## Keep reading Related to this page.

-   [**Vendor management** Ethos Benefits holds your health plan vendors to their contracts with service level agreements, performance guarantees, KPI scorecards and quarterly reviews. _Read more_](https://ethosbenefits.com/services/vendor-management)
-   [**Pharmacy and PBM** Ethos Benefits reviews your PBM contract and pharmacy spend, finds where spread pricing and rebates go, and helps your committee decide what to change. _Read more_](https://ethosbenefits.com/services/pharmacy-pbm)
-   [**Stop-loss procurement** Ethos Benefits markets, places and renews stop-loss coverage for self-funded health plans, and audits the contract so the policy pays when it should. _Read more_](https://ethosbenefits.com/services/stop-loss)
-   [**TPA and administrative contracts** Ethos Benefits runs TPA and ASO procurement for self-funded health plans and redlines the administrative services agreement before your company signs it. _Read more_](https://ethosbenefits.com/services/tpa-procurement)
-   [**Life, disability and absence** Ethos Benefits markets and manages life, AD&D, disability, leave and absence administration, dental, vision and voluntary benefits alongside your health plan. _Read more_](https://ethosbenefits.com/services/ancillary-benefits)

## See what your plan is really costing you.

A Strategic Analysis starts with your plan documents and your broker agreement, then shows you what your plan costs, where the risk sits, and what a committee would decide with the full picture.

[Request a Strategic Analysis](https://ethosbenefits.com/strategic-analysis) [Call (407) 803-4710](tel:+14078034710)