REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
January 23, 2024
FROM
WILLIAM L. GILBERT, Director, Arrowhead Regional Medical Center
SUBJECT
Title
Agreement with Smith and Nephew, Inc. for Loan of Endoscopic Surgical Instruments
End
RECOMMENDATION(S)
Recommendation
Approve Agreement, including non-standard terms, with Smith and Nephew, Inc. for no-cost loan of endoscopic surgical instruments for the term of February 1, 2024 through January 31, 2029.
(Presenter: William L. Gilbert, Director, 580-6150)
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 Discretionary General Funding (Net County Cost) as the Agreement with Smith and Nephew, Inc. (Smith and Nephew) is non-financial in nature.
BACKGROUND INFORMATION
Approval of the Agreement with Smith and Nephew will allow Arrowhead Regional Medical Center (ARMC) to borrow and utilize, at no cost to ARMC, certain specified endoscopic instruments with the hospital-owned, ArthroCare ENT Coblator II Surgery System (Coblator System). The Coblator System (System) and endoscopic instruments are used to dissolve tissue at the molecular level in a highly controlled manner with minimal effect on surrounding tissue, quickly and effectively. The System is used in Ear, Nose and Throat (ENT) procedures, consists of plasma wands, a controller, a flow control valve unit and cable, a foot control unit, and a hospital-grade power cord as well as other instruments and supplies.
By obtaining the endoscopic surgical instruments by loan rather than purchase, the County is able to operate in a fiscally-responsible manner by reducing expenses related to the initial purchase and future need to replace those items. Smith and Nephew will replace inoperable instruments at no additional charge to the County to ensure the hospital can continue to provide vital surgical procedures for patients. Approval of the purchase of disposable supplies that are used with these instruments will come to the Board at a later date, following contract negotiations.
The agreement with Smith and Nephew is their standard commercial agreement, negotiated by the parties, which include nonstandard contract terms and omits certain standard County terms as follows:
1. Smith and Nephew limits its general indemnity obligations to defects in its products and their negligence or willful misconduct, except to the extent the claim arises out of the County’s gross negligence or willful misconduct.
• 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: Smith and Nephew’s indemnity obligation is more limited compared to the standard County general indemnity obligation. In the event a claim arises that falls outside the scope of Smith and Nephew’s limited Indemnity obligation, the County could be financially responsible for the defense of the claim and any resulting judgment/settlement.
2. The agreements do not include certain standard County insurance requirements.
• 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: Without all of the standard County insurance provisions, the County has no reassurance that Smith and Nephew will maintain adequate and sufficient insurance to provide coverage to the County in the event of a claim. Insufficient coverage could result in expenses that exceed the total contract amount, leaving the County financially liable for the claims.
ARMC recommends approval of the Agreement, including the non-standard terms, to support the County goal of providing for the safety and health of county residents through effective ENT surgical procedures.
PROCUREMENT
Purchasing supports the non-competitive procurement of the Smith and Nephew surgical instruments based on equipment compatibility. ARMC currently owns an ArthroCare ENT Coblator II Surgery System, and no other surgical instruments can be used with the system other than Smith and Nephew.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Charles Phan, Deputy County Counsel, 387-5455) on December 21, 2023; Purchasing (Veronica Pedace, Buyer III, 387-2198) on December 21, 2023; Risk Management (Victor Tordesillas, Director, 386-8623) on November 20, 2023; ARMC Finance (Chen Wu, Finance and Budget Officer, 580-3165) on December 22, 2023; Finance (Jenny Yang, Administrative Analyst, 387-4884) on December 27, 2023; and County Finance and Administration (Valerie Clay, Deputy Executive Officer, 387-5423) on December 28, 2023.