REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
June 27, 2023
FROM
SHANNON D. DICUS, Sheriff/Coroner/Public Administrator
SUBJECT
Title
Agreement with Hitachi High-Tech America, Inc. for Equipment Maintenance and Support Services
End
RECOMMENDATION(S)
Recommendation
1. Authorize the Purchasing Agent to issue a non-competitive Purchase Order to Hitachi High-Tech America, Inc., for equipment maintenance and support services, in a total aggregate amount of $30,924, for a retroactive three-year period beginning June 15, 2023, through June 14, 2026.
2. Authorize the Purchasing Agent to sign the non-standard Contract Information Quote, including General Terms and Conditions with non-standard terms, with Hitachi High-Tech America, Inc., for a three-year period beginning June 15, 2023, through June 14, 2026.
3. Direct the Purchasing Agent to transmit the executed Contract Information Quote, including General Terms and Conditions, to the Clerk of the Board of Supervisors within 30 days of execution.
(Presenter: Ernie Perez, Deputy Chief, 387-3760)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Operate in a Fiscally-Responsible and Business-Like Manner.
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 additional Discretionary General Funding (Net County Cost). The cost of $10,308 for the first year of equipment maintenance and support services will be funded within the Sheriff/Coroner/Public Administrator’s (Department) existing 2022-23 budget (4430001000). Sufficient appropriation will be included in future recommended budgets as noted:
|
Year |
Total Maintenance and Support Fees |
|
2022-23 |
$10,308 |
|
2023-24 |
$10,308 |
|
2024-25 |
$10,308 |
|
Total Cost |
$30,924 |
BACKGROUND INFORMATION
The Department’s Scientific Investigation Division (SID) currently utilizes Hitachi High-Tech America, Inc. (Hitachi) FlexSEM Electron Microscopes (Equipment) to conduct analysis for investigative purposes to determine the presence of gunshot residue. The collected data is reviewed, and reports are generated by a Criminalist for required submission to investigating agencies. The Equipment requires preventative maintenance and support on an ongoing basis.
Approval of this item will approve the Contract Information Quote (CIQ), and General Terms and Conditions, including non-standard terms, with Hitachi for maintenance and support services of the Equipment, for a three-year period through June 14, 2026. The CIQ non-standard terms that differ from the standard County contract are as follows:
1. Governing Law/Venue is the State of Illinois.
• The County standard contract requires California as the governing law.
• Potential Impact: The General Terms and Conditions (GTC) will be interpreted under Illinois law. Any question, issues, or claims arising under the GTC will require the County to hire outside counsel competent to advise on, and practice Illinois law, which may result in fees that exceed the total amount of the CIQ.
2. The CIQ requires mutual indemnification between the County and Hitachi for any third-party claims, liabilities, damages, fines, penalties, losses, or expenses, (including reasonable attorney fees, settlements, and judgements) to the extent such claims are based upon the negligent or reckless acts or omissions of the Party in its performance under the CIQ.
• The County standard contract requires the contractor to indemnify the County in accordance with County Policy 11-07.
• Potential Impact: The County may have immunities that may not apply to a private entity, so the County’s risk exposure is broader.
3. Hitachi limits its liability to a refund of the total price paid by the County for the services provided under the CIQ.
• The County standard contract does not permit the contractor to limit its liability in the performance of a contract.
• Potential Impact: The County could potentially not recover all damages incurred during the CIQ period.
4. The CIQ does not require Hitachi 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 Hitachi will be financially responsible for claims that may arise within the performance of the CIQ, which could result in expenses to the County that exceed the total CIQ amount.
5. Hitachi’s payment terms are Net 30, and subject to 10 percent annual interest, calculated when payment was due, provided however, that the late charge shall at no time exceed the maximum amount permitted under applicable law.
• County standard payment terms are Net 60 with no interest or late payment penalties.
• Potential Impact: Failing to pay invoices within 30 days will result in Hitachi charging additional late fees which may exceed the CIQ amount.
6. The CIQ does not contain the standard contract provisions regarding Government Code Section 84803 (Senate Bill 1439) and the disclosure of campaign contributions to a member of the Board of Supervisors (Board) or other County elected officer.
• Under the County standard contract the contractor states it has disclosed campaign contributions of more than $250 to any member of the Board or other County elected officer and completed a form providing additional information.
• Potential Impact: The County may have difficulty gathering information about campaign contributions made by Hitachi.
While these are notable exceptions to the County’s standard contract language, the Department recommends approval of Hitachi’s CIQ, and incorporated General Terms and Conditions, including non-standard terms, to ensure Department investigations are completed without delay.
In April 2023, the Department encountered a disruption in network connectivity resulting in a delay of the review of purchase requests. This Item is being submitted to the Board for approval at the first available meeting upon completion of the required financial and legal review process. County Counsel and Risk Management have reviewed and provided input on the proposed CIQ and incorporated GTC with Hitachi.
PROCUREMENT
Hitachi, as the manufacturer and sole provider of the Equipment, holds proprietary rights for maintenance and support services of the equipment. The terms in the CIQ, and incorporated GTC, may be used to accompany future purchase orders to Hitachi, as necessary, per County Policy 11-04 Procurement of Goods, Supplies, Equipment and Services. Additionally, County Policy 11-05 requires departments to obtain Board approval for the procurement of goods and services with non-standard terms and conditions.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Richard D. Luczak, Deputy County Counsel, 387-5455) on June 2, 2023; Purchasing (Michael Candelaria, Lead Buyer, 387-0321) on June 2, 2023; Risk Management (Victor Tordesillas, Director, 396-8621) on June 5, 2023; Finance (Erika Rodarte, Administrative Analyst, 387-4919) on June 8, 2023; and County Finance and Administration (Robert Saldana, Deputy Executive Officer, 387-5423) on June 11, 2023.