REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
June 27, 2023
FROM
JOSHUA DUGAS, Director, Department of Public Health
SUBJECT
Title
Agreement with Fujifilm Healthcare Americas Corporation for a Fujifilm Synapse PACS System
End
RECOMMENDATION(S)
Recommendation
Approve an agreement with Fujifilm Healthcare Americas Corporation, including non-standard terms, for the maintenance and support of Fujifilm Synapse PACS System used for x-ray services, in an amount not to exceed $12,500 per year, effective July 1, 2023 until terminated.
(Presenter: Joshua Dugas, Director, 387-9146)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Provide for Safety, Health, and Social Services Needs of County Residents.
FINANCIAL IMPACT
This item does not impact Discretionary General Funding (Net County Cost). The cost for the maintenance and support for the use of the Fujifilm Synapse PACS System (System) will not exceed $12,500 per year for the term of the agreement and is funded by State Medi-Cal, Federal Medicare, and Patient Fees. Adequate appropriations and revenue have been included in the Department of Public Health (DPH) 2023-24 budget and will be included in future recommended budgets.
BACKGROUND INFORMATION
The System software service agreement was originally purchased in 2017 and approved by the Purchasing Department (Purchasing) as a non-competitive contract due to the proprietary software used for x-ray services. On September 3, 2020, Purchasing approved a multi-year service agreement with Fuji Medical Systems USA, Inc. for continued maintenance and support of the Fujifilm Synapse PAC System software and hardware. Fuji Medical Systems USA, Inc. has since changed its name to Fujifilm Healthcare Americas Corporation (Fujifilm).
Approval of this agreement will continue the maintenance and support, which allows DPH to receive service coverage for the System to ensure the department can continue to provide x-ray services to patients in Federally Qualified Health Centers (FQHC). The System is a picture archiving and communication system which provides storage, and access to x-ray images in DPH’s health centers and facilitates the transmission of these images to Arrowhead Regional Medical Center (ARMC) radiology department for reading and reporting.
This agreement includes terms that differ from the standard County contract and omits certain County standard contract terms. The non-standard and missing terms include the following:
1. Limitation of liability to the County is a maximum of $1,000,000 excluding Fujifilm indemnification obligations, gross negligence, or willful misconduct.
• The County standard contract does not include a limitation of liability.
• Potential Impact: Fujifilm caps its liability to the County at a maximum of $1,000,000 for all claims arising under the agreement except for Fujifilm’s intellectual property indemnity obligations or arising from Fujifilm’s gross negligence or willful misconduct. Claims could exceed the liability of cap and the agreement amount leaving the County financially liable for the excess. In addition, the County’s liability under the agreement is not similarly limited.
2. The County is required to indemnify Fujifilm against third party claims.
• The County standard contract does not include any indemnification or defense by the County of a Contractor.
• Potential Impact: By agreeing to indemnify Fujifilm, 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 Fujifilm without such limitations and the County would be responsible to defend and reimburse Fujifilm for costs, expenses, and damages, which could exceed the total agreement amount.
3. There is no termination for convenience.
• The County standard contract gives the County the right to terminate the Agreement, 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: The County cannot terminate the agreement during any subscription period unless Fujifilm breaches the agreement. Any attempt for early termination without cause will result in the County’s loss of any pre-paid subscription fees, payment of fees for the remaining subscription period, which could result in payment liability where no funds are available due to lack of allocation or loss of funding.
4. The agreement does not require Fujifilm to meet the County’s insurance standards as required pursuant to County Policy 11-07.
• The 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 agreement does not include County standard insurance requirements. This means that the County has no assurance that Fujifilm will be financially responsible for claims that may arise from the County’s use of the software, which could result in expenses to the County that exceed the total agreement amount.
5. The term of the agreement is indefinite until either party terminates the agreement as a material result of a breach of the agreement by the other party.
• County Policy 11-04 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 agreement and the County is indefinitely bound to the terms and conditions of the agreement unless Fujifilm materially breaches the agreement and fails to cure the breach within 30 days after being notified of the breach.
DPH recommends approval of the agreement, including the non-standard terms, to continue to receive service coverage for the System and ensure DPH can continue to provide x-ray services.
PROCUREMENT
The Purchasing Department initially approved the non-competitive Master Service Agreement No. 4400013536 with Fujifilm in September 2020 to provide maintenance and support to the proprietary software used by DPH x-ray machines; DPH staff have researched and has concluded Fujifilm is only known company able to provide maintenance and support for this software. Purchasing supports the continued use of the proprietary software; they cannot approve the current renewal of the support agreement due to its non-standard terms, which defer from the standard County contract and omits the terms listed in the section above.
REVIEW BY OTHERS
This item has been reviewed by Human Services Contracts (Patty Steven, Contracts Manager, 388-0241) on May 16, 2023; County Counsel (Adam Ebright, Deputy County Counsel, and Bonnie Uphold, Supervising Deputy, 387-5455) on May 31, 2023; Finance (Chris Lange, Administrative Analyst, 386-8393) on June 5, 2023; and County Finance and administration (Cheryl Adams, Deputy Executive Officer, 388-0238) on June 7, 2023.