REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
October 8, 2024
FROM
ANDREW GOLDFRACH, ARMC Chief Executive Officer, Arrowhead Regional Medical Center
SUBJECT
Title
License Agreement with BrandConnex, LLC, as Agent for U.S. News & World Report, L.P., for Licensing of the Best Hospitals for High Performance - Kidney Failure Emblem
End
RECOMMENDATION(S)
Recommendation
Approve License Agreement, including non-standard terms, with BrandConnex, LLC, as agent for U.S. News & World Report, L.P., for licensing to utilize the High Performing Hospitals 2024-2025 - Kidney Failure emblem, in the amount of $4,800, effective October 8, 2024, through the date of the next publication, or 12 months, whichever occurs first.
(Presenter: Andrew Goldfrach, ARMC Chief Executive Officer, 580-6150)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Promote the Countywide Vision.
Improve County Government Operations.
Provide for the Safety, Health and Social Service Needs of County Residents.
FINANCIAL IMPACT
Approval of this item will not result in the use of Discretionary General Funding (Net County Cost). The cost of $4,800 is funded by State Medi-Cal, Federal Medicare, private insurances, and other departmental revenue. Funding sources may change in the future pending any legislative activity related to the repeal and/or replacement of the Affordable Care Act. Adequate appropriation and revenue have been included in the Arrowhead Regional Medical Center (ARMC) 2024-25 budget and will be included in the 2025-26 recommended budget.
BACKGROUND INFORMATION
This License Agreement (Agreement) will allow ARMC to utilize the High Performing Hospitals 2024-2025 - Kidney Failure emblem, awarded by the U.S. News & World Report, L.P. (U.S. News & World Report), which generates hospital rankings by evaluating data on nearly 5,000 hospitals. ARMC has earned this rating through an evaluation of the services and amenities offered by the hospital, as well as its performance on key measures of safety and quality.
BrandConnex, LLC (BrandConnex) is a licensing agent that represents major media brands, including U.S. News & World Report. Through the Agreement with BrandConnex, ARMC will have the right to display the U.S. News & World Report emblem recognizing ARMC’s rating and make use of certain U.S. News & World Report approved phrases on ARMC’s website and other media platforms.
The Agreement was negotiated by the parties and include terms that deviate from the standard County contract terms as follows:
1. The Agreement is silent on governing law and venue.
• The County standard contract requires California governing law and venue to be in the San Bernardino County Superior Court, San Bernardino District.
• Potential Impact: The Agreement is silent on governing law and venue. This results in uncertainty over which state’s laws will govern the interpretation of the Agreement, and leads to ambiguity in interpretation of the contract terms. BrandConnex is based in New York. The Agreement could be interpreted under any state law depending on where the claim is brought, including New York or California. Any questions, issues or claims arising under this Agreement could require the County to hire outside counsel competent to advise on the applicable state law, which may result in fees that exceed the total Agreement amount.
2. Except for claims based on indemnification, gross negligence, violation of law, or willful misconduct, BrandConnex limits its liability for any claims to the amount paid by the County.
• The County standard contract does not include a limitation of liability.
• Potential Impact: BrandConnex caps its liability to the amounts paid by the County for all claims arising under the Agreement, except for claims based on indemnification, gross negligence, violation of law, or willful misconduct. Claims could exceed the liability cap and the Agreement amount leaving the County financially liable for the excess. County Counsel cannot advise on, whether and to what extent, New York or other state law may limit or expand the exclusion of limits to the extent prohibited by applicable law.
3. The Agreement does not require BrandConnex to indemnify the County, including for intellectual property infringement claims.
• The County standard contract provision for intellectual property indemnity is: contractor will indemnify, defend, and hold harmless the County and its officers, employees, agents and volunteers, from any and all third party claims, costs (including without limitation reasonable attorneys’ fees), and losses for infringement of any United States patent, copyright, trademark or trade secret (Intellectual Property Rights) by any goods or services. The County standard contract general indemnity provision requires the contractor to indemnify, defend, and hold the County harmless from third party claims arising out of the acts, errors or omissions of any person.
• Potential Impact: BrandConnex is not required to defend, indemnify or hold the County harmless from any claims, including claims arising from BrandConnex’s negligent or intentional acts and intellectual property infringement. If the County is sued for any claim, including for intellectual property infringement, the County may be solely liable for the costs of defense and damages, which could exceed the total Agreement amount. County Counsel cannot advise on whether and to what extent New York or other state law may allow the County to require BrandConnex to defend or indemnify it absent an express provision in the Agreement.
4. The Agreement does not require BrandConnex to meet the County insurance standards.
• The County standard contract requires contractors to carry appropriate insurance at limits and under conditions determined by the County’s Risk Management Department.
• Potential Impact: The Agreement does not include County standard insurance requirements. This means that the County has no assurance that BrandConnex will be financially responsible for any claims that may arise from Agreement, which could result in expenses to the County that exceed the total Agreement amount.
5. The Agreement does not address attorney’s fees and costs.
• The County standard contract requires each party to bear its own costs and attorney fees, regardless of who is the prevailing party.
• Potential Impact: There is no provision in the Agreement addressing each party’s responsibility for paying attorneys’ fees and costs. County Counsel cannot advise on, whether and to what extent, state law other than California, may affect a party’s requirement to pay the prevailing party in a legal action where no specific provision is provided in the Agreement.
ARMC recommends approval of the Agreement, including the non-standard terms, to enable the County to highlight the high level of patient care and services provided at the hospital for its patients, as well as the commitment of the County and hospital staff to the patient community.
PROCUREMENT
The Purchasing Department supports this non-competitive procurement based on specialized credentials/expertise/training, as BrandConnex is the only licensing agent providing this specific award service.
REVIEW BY OTHERS
This item has been reviewed by (Charles Phan, Supervising Deputy County Counsel, 387-5455) on September 10, 2024; Risk Management (Gregory Ustaszewski, Staff Analyst, 386-9008) on September 11, 2024; Purchasing (Veronica Pedace, Buyer III, 387-2464) on September 11, 2024; ARMC Finance (Chen Wu, Budget and Finance Officer, 580-3165) on September 13, 2024; Finance (Jenny Yang, Administrative Analyst, 387-4884) on September 17, 2024; and County Finance and Administration (Valerie Clay, Deputy Executive Officer, 387-5423) on September, 23, 2024.