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File #: 9162   
Type: Consent Status: Passed
File created: 11/27/2023 Department: Probation
On agenda: 12/5/2023 Final action: 12/5/2023
Subject: Non-Financial Agreement with Miller Mendel, Inc. for Implementation and Licensing of Background Investigation Software
Attachments: 1. ATT-PROB- 12-05-23-MMI MSSSA for eSOPH with San Bernardino County 09.21.2023 - May not be edited, 2. COV-PROB-12-05-23-eSOPH_SUBSCRIPTION-MILLER_MENDEL_INC.docx, 3. R1-CON PROB 12-05-23-eSOPH_SUBSCRIPTION_ FCRA Letter with Experian, 4. ADD -COV-PROB-12-05-23-eSOPH SUBSCRIPTION_FCRA Letter with Experian, 5. Item #37 Executed BAI, 6. 23-1295 Executed Contract, 7. 23-1296 Executed Contract

REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS

OF SAN BERNARDINO COUNTY

AND RECORD OF ACTION

 

                                          December 5, 2023

 

FROM

TRACY REECE, Chief Probation Officer, Probation Department 

         

SUBJECT                      

Title                     

Non-Financial Agreement with Miller Mendel, Inc. for Implementation and Licensing of Background Investigation Software

End

 

RECOMMENDATION(S)

Recommendation

1.                     Approve non-financial Master Software Subscription Services Agreement, including non-standard terms, with Miller Mendel, Inc. for implementation and licensing of background investigation software for a period of one year, beginning December 5, 2023, and automatically renewing upon the County’s submission of a purchase order, unless terminated by either party.

2.                     Approve non-financial Letter Agreement, including non-standard terms, with Experian Information Solutions, Inc. for the use of a credit reporting database through the Miller Mendel, Inc. background investigation software.

(Presenter: Tracy Reece, Chief Probation Officer, 387-5692)

Body

 

COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES

Provide for the Safety, Health and Social Service Needs of County Residents.

Operate in a Fiscally-Responsible and Business-Like Manner.

 

FINANCIAL IMPACT

Approval of this item will not result in the use of additional Discretionary General Funding (Net County Cost Adequate appropriation has been included in the Probation Department’s (Probation) 2023-24 budget and will be included in future recommended budgets.

 

BACKGROUND INFORMATION

Probation currently completes approximately 600 background checks annually for sworn and non-sworn positions within the department. Thorough background checks are completed for each sworn and non-sworn candidate for employment with Probation. Miller Mendel, Inc. (MMI) offers an electronic Statement Of Personal History (eSOPH) system that would assist Probation’s background investigators in completing background checks in a timely manner.

 

Probation is currently in a staffing crisis and has a 33% vacancy for the position of Probation Corrections officer and 19% vacancy for Probation Officer. Probation Officers and Probation Corrections Officers are sworn law enforcement positions, which require an extensive and thorough background investigation. Completing a background investigation on a sworn officer currently takes eight to nine months.

 

Probation has been reviewing ways to reduce the time and resources needed to complete its background investigations without lowering the standards or integrity of the investigation. Adding eSOPH software to Probation’s background process would meet those needs, as the software would greatly reduce the time needed to complete the background process. This would allow Probation to increase the amount of background investigations completed, by decreasing the time needed for the process.

 

The MMI Master Software Subscription Services Agreement (Master Agreement) is MMI’s standard commercial contract, which includes terms that differ from the standard County contract and omits certain County standard contract terms. MMI is unwilling to negotiate these terms. The non-standard and missing terms include the following:

 

1.                     The Master Agreement does not require MMI to indemnify the County for intellectual property infringement claims.

                     The County standard contract 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. The 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.

                     Potential Impact: MMI is not required to defend, indemnify or hold the County harmless from claims arising from MMI’s intellectual property infringement. If the County is sued for any claim, including intellectual property infringement based on its use of MMI’s software or services, the County may be solely liable for the costs of defense and damages, which could exceed the total Master Agreement amount.

 

2.                     The County agrees to defend, indemnify and hold MMI and third party subcontractor Social Intelligence Corporation (SIC) harmless from all claims related to: (a) the SIC Reports or arising from adverse actions by the County against applicants based on eSOPH’s SIC Services; (b) adverse actions by the County against applicants arising from use of eSOPH’s Experian Services; (c) any cause of action arising from the County’s gross negligence, willful misconduct, or material breach of any representations, warranties, covenants or obligations under this Master Agreement.

                     The County standard contract does not include any indemnification or defense by the County of a Contractor.

                     Potential Impact:  By agreeing to indemnify MMI and SIC, the County could be contractually waiving the protection of sovereign immunity. Claims that may otherwise be barred against the County, time limited, or expense limited could be brought against MMI or SIC without such limitations and the County would be responsible to defend and reimburse MMI and SIC for costs, expenses, and damages, which would exceed the total Master Agreement amount.

 

3.                     Payment terms are Net 30 days from the date of invoice. If the County fails to pay any undisputed amount within 60 days after the date of the original invoice, MMI may suspend the County’s ability to create new entries, and within 90 days after the date of the original invoice, MMI may suspend or terminate any and all of County’s access to the system and cease to perform any and all of its obligations under the Master Agreement.

                     County standard payment terms are Net 60 days with no interest or late payment penalties.

                     Potential Impact: County standard processing time is 60 days or more. Failing to make timely payments will permit MMI to limit or deny the County’s access to the system, and will result in a material breach of the contract, which would allow MMI to terminate the Master Agreement and seek other legal remedies.

 

4.                     The Master Agreement does not include certain standard County insurance requirements, including the waiver of subrogation.

                     The County standard contract requires contractors to carry appropriate insurance at limits and under conditions determined by the County’s Risk Management Department and County Policy 11-07SP.

                     Potential Impact:  No waiver of subrogation may allow MMI’s insurer to bring suit against the County, which could result in expenses that exceed the total Master Agreement amount.

 

5.                     The term of the Master Agreement automatically renews on an annual basis when the County places a purchase order or as long as County continues to pay invoices.

                     County Policy 11-06SP does not permit indefinite term or automatically renewing contracts unless approved by the Board of Supervisors.

                     Potential Impact: There is no end term to the Master Agreement and the County is indefinitely bound to the terms and conditions of the Master Agreement until terminated by either party.

 

6.                     There is no termination of the Master Agreement for convenience without penalty. County may terminate the contract with 60 days’ prior notice during a subscription term and all fees for the remainder of the term are due and payable.

                     The County standard contract gives the County the right to terminate the Contract, for any reason, with a 30 day written notice of termination without any obligation other than to pay amounts for services rendered and expenses reasonably incurred prior to the effective date of termination.

                     Potential Impact:  Upon any termination by the County without cause, the County is required to pay the subscription fees for the remaining term, which could result in payment liability where no funds are available due to lack of allocation or loss of funding.

 

7.                     There is no stated venue in the Master Agreement.

                     The County standard contract requires the venue for disputes be the Superior Court of California, County of San Bernardino, San Bernardino District.

                     Potential Impact: MMI is located in King County, Washington. Having no express venue in the Master Agreement means that King County, Washington venue could be applied to disputes arising under this Master Agreement, which may result in additional expenses that exceed the amount of the Master Agreement.

 

The Experian Information Solutions, Inc. (Experian) Letter Agreement (Experian Agreement) is Experian’s standard commercial contract, which includes terms that differ from the standard County contract and omits certain County standard contract terms. Experian is unwilling to negotiate these terms. The non-standard and missing terms include the following:

 

1.                     The Experian Agreement is silent on governing law.

                     The County standard contract requires California governing law.

                     Potential Impact: Having no specified governing law in the Experian Agreement results in uncertainty over which state’s laws will govern the interpretation of the Experian Agreement, and leads to ambiguity in interpretation of the Experian Agreement terms. Experian is a corporation having a primary location based in Washington, D.C. The Experian Agreement could be interpreted under any state law depending on where the claim is brought, including California. Any questions, issues or claims arising under the Experian 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 Experian Agreement amount.

 

2.                     There is no restriction on Experian’s ability to assign the Experian Agreement.

                     The County standard contract requires that the County must approve any assignment of the contract.

                     Potential Impact: Experian could assign the Experian Agreement without notice to the County and without the County’s approval to a third party or business with which the County is legally prohibited from doing business due to issues of Federal debarment or suspension and conflict of interest, without the County’s knowledge. Should this occur, the County would be out of compliance with the law until it becomes aware of the assignment and terminates the Experian Agreement.

 

3.                     There is no provision in the Experian Agreement addressing each party’s responsibility for paying attorneys’ fees.

                     The County standard contract requires each party to bear its own costs and attorney fees, regardless of who is the prevailing party.

                     Potential Impact: County Counsel cannot advise on, whether and to what extent, non-California law may affect a party’s requirement to pay the prevailing party’s attorneys’ fees and costs in a legal action where no specific provision is provided in the agreement.

 

4.                     The Experian Agreement does not require Experian to indemnify the County, as required by County Policy 11-07.

                     The County standard contract indemnity provision requires the contractor to indemnify, defend, and hold County harmless from third party claims arising out of the acts, errors or omissions of any person.

                     Potential Impact:  Experian is not required to defend, indemnify or hold the County harmless from any claims, including indemnification for claims arising from Experian’s negligent or intentional acts and intellectual property infringement. If the County is sued for any claim, including intellectual property infringement based on its use of Experian’s software or services, 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 non-California law may allow the County to require Experian to defend or indemnify it absent an express provision in the agreement.

 

5.                     The Experian Agreement does not require Experian to meet the County’s insurance standards as required pursuant to County Policy 11-07.

                     County Policy requires contractors to carry appropriate insurance at limits and under conditions determined by the County’s Risk Management Department and set forth in the County standard contract.

                     Potential Impact:  The County has no assurance that Experian will be financially responsible for claims that may arise under the Experian Agreement, which could result in expenses to the County that exceed the total Experian Agreement amount.

 

6.                     The term of the Experian Agreement is indefinite.

                     County Policy 11-06SP does not permit indefinite term or automatically renewing contracts unless approved by the Board.

                     Potential Impact:  There is no end term to the Experian Agreement and the County is indefinitely bound to the terms and conditions of the Agreement.

 

7.                     There is no termination provision in the Experian Agreement.

                     The County standard contract gives the County the right to terminate the contract, for any reason, with a 30-day written notice of termination without any obligation other than to pay amounts for services rendered and expenses reasonably incurred prior to the effective date of termination.

                     Potential Impact:  So long as the County uses the Experian services through the MMI Master Agreement, the County cannot terminate the Experian Agreement.

 

8.                     There is no stated venue in the Experian Agreement.

                     The County standard contract requires the venue for disputes be the Superior Court of California, County of San Bernardino, San Bernardino District.

                     Potential Impact:  Experian is located in Washington, D.C. Having no express venue in the Experian Agreement means that Washington, D.C. venue could be applied to disputes arising under the Experian Agreement, which may result in additional expenses that exceed the amount of the Experian Agreement.

 

Probation recommends approval of the Agreement with MMI, including the non-standard terms, as this would allow Probation to reduce the time it takes to complete a thorough background without diminishing the integrity of the background investigation.

 

PROCUREMENT

Probation conducted an informal solicitation and contacted three companies who provide similar background services, but none provided the full scope of services provided by MMI’s eSOPH system.

 

REVIEW BY OTHERS

This item has been reviewed by County Counsel (Bonnie Uphold, Supervising Deputy County Counsel, 387-5455) on November 8, 2023; Purchasing Department (Jessica Barajas, Supervising Buyer, 387-2065) on October 4, 2023; Risk Management (Victor Tordesillas, Director, 386-8623) on November 9, 2023; Finance (Kathleen Gonzalez, Administrative Analyst II, 387-5412) on November 14, 2023; and County Finance and Administration (Robert Saldana, Deputy Executive Officer, 387-5423) on November 16, 2023.