REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
September 22, 2026
FROM
STEPHENIE SHEA, Acting Director, Purchasing
ANDREW GOLDFRACH, ARMC Chief Executive Officer, Arrowhead Regional Medical Center
SUBJECT
Title
Agreements with Vizient, Inc. for Group Purchasing Organization Membership Services
End
RECOMMENDATION(S)
Recommendation
1. Terminate Agreement No. 21-915 with Vizient, Inc., effective on January 1, 2027, for Group Purchasing Membership Services.
2. Approve non-financial Client Services Agreement with Vizient, Inc., including non-standard terms, for County Group Purchasing Organization Associate Membership, for the period of January 1, 2027 through December 31, 2033, with three options to extend for additional one-year periods, at no cost to the County for membership.
3. Approve Statement of Work with Vizient, Inc., including non-standard terms, for access to the Vizient electronic contract management and catalog database, with annual minimum purchase commitments totaling $350,135,597, for the period of January 1, 2027 through December 31, 2033, with three options to extend for additional one-year periods.
4. Approve Order Form and Services Terms and Conditions with Vizient, Inc., including non-standard terms, for the purchase of data management and supply analytics with benchmarking services, in the amount of $1,288,014, for the period of January 1, 2027 through December 31, 2033.
(Presenter: Stephenie Shea, Acting Director, 387-4811)
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). This is a Countywide contract available to all departments upon request, however, it will primarily be used by Arrowhead Regional Medical Center (ARMC). Contract expenditures for ARMC are funded by State Medi-Cal, Federal Medicare, private insurance, and other departmental revenue. Funding sources may change in the future pending legislative activity related to the repeal and/or replacement of the Affordable Care Act. Sufficient appropriation and revenue are included in ARMC, Department of Public Health, and the Probation Department 2026-27 budgets and will be included in future recommended budgets.
The purchase of data management and supply analytics with benchmarking services in the amount of $1,288,014 will be utilized and paid for by ARMC.
Expenditures for numerous contracts used by ARMC and other departments under the Vizient, Inc. Group Purchasing Organization (GPO) are estimated at $80,000,000 annually, but may fluctuate based on actual need. These expenditures are considered qualifying spend that would count toward the annual minimum purchase commitments. The County annual minimum purchase commitments are:
|
Contract Period |
Committed Purchases Requirement |
|
January 1, 2027 - December 31, 2027 |
$45,694,920 |
|
January 1, 2028 - December 31, 2028 |
$47,065,768 |
|
January 1, 2029 - December 31, 2029 |
$48,477,741 |
|
January 1, 2030 - December 31, 2030 |
$49,932,073 |
|
January 1, 2031 - December 31, 2031 |
$51,430,035 |
|
January 1, 2032 - December 31, 2032 |
$52,972,936 |
|
January 1, 2033 - December 31, 2033 |
$54,562,124 |
Vizient, Inc. (Vizient) collects an administrative fee from its contractors based on sales volume and provides a share back, or rebate, to its members based on agency spend. ARMC estimates approximately $1,250,000 annually in rebates, which will be deposited in the ARMC Miscellaneous Revenue account that is used to subsidize hospital operations. Other participating departments are expected to generate minimal rebates.
Agreement No. 21-915 will terminate effective January 1, 2027 and approximately $341,231 of the existing $1,790,990 agreement authority is expected to remain unused. No termination fee or duplicate service fee will result from the transition to the replacement agreements.
BACKGROUND INFORMATION
Vizient is a GPO that competitively solicits, evaluates, and negotiates agreements for a broad range of healthcare-related products, equipment, supplies, and services. Through its membership program, Vizient makes these pre-negotiated agreements available to participating public agencies and healthcare organizations. Vizient's procurement process is based on the American Bar Association Model Procurement Code, which is consistent with the County's Purchasing Policies and best-value procurement principles. Participation in Vizient's membership program provides the County with access to a large portfolio of competitively solicited contracts, reducing the need for the County to conduct separate solicitations for frequently purchased medical and healthcare-related goods and services. As a result, the County can realize significant savings in staff time, administrative costs, and procurement resources while maintaining compliance with applicable purchasing requirements and obtaining favorable pricing and contract terms.
On December 7, 2021 (Item No. 46), as the result of Request for Proposals (RFP) No. AGENCY21-PURC-4090, the County Board of Supervisors (Board) approved Agreement No. 21-915 with Vizient for a County GPO Associate Membership, enrollment in the Vizient Data Management Platform and DataLYNX, and Vizient Savings Actualizer - Supplies with Benchmarking Program, at a not-to-exceed amount of $769,824, for the period of January 1, 2022 through December 31, 2026.
On August 23, 2022 (Item No. 11), the Board approved Amendment No. 1 to Agreement No. 21-915 with Vizient for the provision of a supply chain consultant for an eight-month period effective on September 1, 2022, increasing the not-to-exceed contract amount by $182,168, from $769,824 to $951,992, with no change to the term of January 1, 2022 through December 31, 2026.
On February 7, 2023 (Item No. 8), the Board approved Amendment No. 2 to Agreement No. 21-915 with Vizient for the Supplier Diversity Premium Platform subscription for 36 months, increasing the not-to-exceed contract amount by $77,273, from $951,992 to $1,029,265, with no change to the contract term of January 1, 2022 through December 31, 2026.
On August 20, 2024 (Item No. 21), the Board approved Amendment No. 3 to Agreement No. 21-915 with Vizient for the provision of eCommerce Exchange Services, Transaction Management Services, Catalog Services, and an interim Supply Chain Manager, increasing the not-to-exceed amount by $420,494, from $1,029,265 to $1,449,759, with no change to the contract term of January 1, 2022 through December 31, 2026.
On February 24, 2026 (Item No. 33), the Board approved Amendment No. 4 to Agreement No. 21-915 with Vizient for Group Purchasing Membership Services, increasing the agreement amount by $341,231, from $1,449,759 to $1,790,990, and extending the term by two years for a new total agreement term of January 1, 2022 through December 31, 2028.
Amendment No. 4 was approved while the County completed the new GPO procurement and contract negotiations. The extension allowed ARMC and other participating departments to continue using the Vizient membership, , associated services, and to enter into local supplier agreements with terms extending beyond December 31, 2026. The $341,231 increase was intended to support the two-year extension period and could decrease if the replacement agreement was completed before December 31, 2028. Approval of Recommendation No. 1 will terminate Agreement No. 21-915 effective January 1, 2027, before the two-year extension is utilized and the $341,231 increase is therefore expected to remain unused. Vizient will not charge a termination fee, and the County will not incur duplicate service fees under the existing and replacement agreements.
Approval of Recommendation No. 2 will approve a non-financial Client Services Agreement (Agreement) which replaces the GPO membership component of Agreement No. 21-915 with a new Client Services Agreement. The Agreement will allow County departments to continue accessing Vizient's GPO services for medical, surgical, and pharmaceutical products and healthcare-related services, while reducing the need to conduct separate competitive solicitations. While ARMC remains the primary user for this Agreement and will receive all rebate proceeds, additional departments, such as Department of Public Health and the Probation Department, have set up user accounts to take advantage of catalogue pricing as well. This supports the County's efforts to manage healthcare costs and continue providing high-quality medical care.
Approval of Recommendation No. 3 will establish the replacement Statement of Work for Vizient’s electronic contract-management and catalog services, including the related annual minimum purchase commitments. County departments, including ARMC, will have access to Vizient’s database of negotiated supplier agreements for goods and services, as well as supply chain and clinical improvement resources available through the group purchasing program under Recommendation No. 2. There are no service fees associated with Recommendation No. 3, rather, the Statement of Work establishes annual minimum purchase commitments totaling $350,135,597.
Approval of Recommendation No. 4 will establish the replacement Order Form and Services Terms and Conditions for data-management, supply-analytics, and benchmarking services. These services will allow ARMC to utilize online data tools to perform market share analysis, run advanced spend analysis, consolidate systems of records including but not limited to SAP, Multiview and Strata, and standardize products where possible. These services will ensure that ARMC is receiving the best pricing available and will contribute to ongoing efforts to improve efficiency.
A seven-year term is necessary due to Vizient contract term dates and ARMC’s extensive usage of the services provided. The local agreement term entered between ARMC and the vendor cannot exceed the end date of the County’s membership agreement with Vizient. Therefore, having a longer term allows ARMC to enter into local agreements through Vizient without the restriction of term dates exceeding the County’s membership agreement.
The Client Services Agreement is Vizient’s standard commercial contract, which includes terms that differ from the standard County contract and omits certain County standard contract terms. While the parties negotiated certain contract terms to County standards, Vizient would not agree to all County standard terms. The non-standard and missing terms include the following:
1. Governing law is the State of Delaware.
• The County standard contract requires California governing law.
• Potential Impact: The Agreement will be interpreted under Delaware law. Any questions, issues or claims arising under this Agreement will require the County to hire outside counsel competent to advise on Delaware law, which may result in fees that exceed the total Agreement amount.
2. Vizient may assign the Agreement upon reasonable notice but without County’s approval.
• The County standard contract requires that the County must approve any assignment of the contract.
• Potential Impact: Vizient could assign the Agreement 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 could be out of compliance with the law until it becomes aware of the assignment and terminates the Agreement. County Counsel cannot advise on whether and to what extent Delaware law may permit or restrict a party’s right to assign without an express provision in the Agreement.
3. There is no provision in the 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, Delaware 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 County is required to indemnify Vizient against any third-party claims for damages arising from bodily injury, death, or property damage caused by the County’s negligent act or omission and breach of the Agreement.
• The County standard contract does not include any indemnification or defense by the County of a contractor.
• Potential Impact: By agreeing to indemnify Vizient, 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 Vizient without such limitations and the County could be responsible to defend and reimburse Vizient for costs, expenses, and damages, which could exceed the total Agreement amount. County Counsel cannot advise on whether and to what extent, Delaware law may limit or expand this Agreement term.
5. The Agreement does not require Vizient to meet the County’s insurance standards as required pursuant to County Policies 11-05, 11-07 and 11-07SP.
• County policy requires contractors to carry appropriate insurance at limits and under conditions determined by the County’s Risk Management Department and as set forth in County policy and in the County standard contract.
• Potential Impact: The County has no assurance that Vizient will be financially responsible for claims that may arise under the Agreement, which could result in expenses to the County that exceed the total Agreement amount.
6. Vizient’s maximum liability to the County is limited to the annual service fees and reimbursable expenses in the applicable Statement of Work, excluding Vizient’s indemnification obligations.
• The County standard contract does not include a limitation of liability.
• Potential Impact: 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 Delaware law may limit or expand the exclusion of limits to the extent prohibited by applicable law.
7. There is no termination for convenience.
• 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: The County is only permitted to terminate the contract for uncured breach by or insolvency of Vizient. Any attempted termination by the County without cause could result in payment liability for the full Agreement amount, which could result in payment liability where no funds are available due to lack of allocation or loss of funding.
8. There is no stated venue in the Agreement.
• County Policy 11-05 requires venue for disputes in Superior Court of California, County of San Bernardino, San Bernardino District.
• Potential Impact: Vizient is incorporated in Delaware and located in Dallas County, Texas. Having no express venue in the Agreement means that Delaware or Dallas County, Texas venue could be applied to disputes arising under this Agreement, which may result in additional expenses that exceed the amount of the Agreement.
The Statement of Work (SOW) is Vizient’s standard commercial contract, which includes terms that differ from the standard County contract and omits certain County standard contract terms. While the parties negotiated certain contract terms to County standards, Vizient would not agree to all County standard terms. The non-standard and missing terms include the following:
1. The SOW requires that Vizient be the County’s exclusive group purchasing organization for purposes of negotiating and entering into pharmaceutical and pharmacy-related supplier Agreements.
• The County standard contract does not include any exclusivity provision.
• Potential Impact: By agreeing to Vizient being the County’s exclusive pharmaceutical and pharmacy-related supplier, the County cannot purchase such supplies through any other group purchasing organization. If any County department purchases such supplies through another GPO, the County will be in breach of contract and Vizient may terminate the agreement and pursue legal remedies against the County, which may exceed the amount of the SOW.
2. The County is required to indemnify Vizient against breach of its representation that the County: i) has managerial or operational responsibilities, including primary control of each covered facility’s procurement activities related to supply chain management; ii) has the authority to bind each covered facility to the terms and conditions of the SOW; iii) is authorized to accept any applicable fee share, discounts, or rebates on behalf of covered facilities and iv) will provide covered facilities with any information relating to administrative fees necessary to comply with all relevant state and federal cost reporting or other laws and regulations.
• The County standard contract does not include any indemnification or defense by the County of a contractor.
• Potential Impact: By agreeing to indemnify Vizient, 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 Vizient without such limitations and the County could be responsible to defend and reimburse Vizient for costs, expenses, and damages, which could exceed the total SOW amount. County Counsel cannot advise on whether and to what extent Delaware law may limit or expand this SOW term.
3. There is no termination of the SOW for convenience without penalty.
• 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: The County is only permitted to terminate the SOW for an uncured breach by Vizient. The County commits to annual minimum purchase amounts, and failure to meet those amounts results in a payment obligation of 2.65% of the difference between the purchase commitment amount and the actual purchase amount. Any attempted early termination by County without cause could result in payment liability for this amount, which could result in payment liability where no funds are available due to lack of allocation or loss of funding.
The Order Form and Services Terms and Conditions (Services Order) is Vizient’s standard commercial contract, which includes terms that differ from the standard County contract and omits certain County standard contract terms. Vizient would not negotiate these terms. The non-standard and missing terms include the following:
1. There is no termination of the Services Order for convenience without penalty.
• 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: The County is not permitted to terminate the Services Order. Any attempted early termination by County without cause could result in payment liability for the remaining amounts of the Services Order, which could result in payment liability where no funds are available due to lack of allocation or loss of funding.
The Purchasing Department (Purchasing) recommends proceeding with the Vizient’s Agreement, SOW, and Services Order, including non-standard terms, because they allow the County access to Vizient contracts consistent with the County's purchasing policies and best-value procurement principles, which facilitates the orderly progression of the procurement of products and services.
PROCUREMENT
On November 26, 2025, Purchasing released a RFP No. AGENCY26 PURC-6155 for GPO Membership Services. The purpose of the RFP was to select a full-service GPO capable of providing competitive rates for medical products, surgical products, pharmaceutical products, and support services solicited in a manner compliant with County purchasing procedures.
Vizient’s proposal was the only proposal received in response to the RFP. Upon reviewing Vizient’s proposal, ARMC determined Vizient’s GPO membership services met the requirements of a full-service GPO that could provide competitive rates for the products and support services needed by the departments. On January 9, 2026, Vizient was notified to begin contract negotiations.
Purchasing supports this procurement based on the competitive solicitation referenced above.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Bonnie Uphold, Supervising Deputy County Counsel, 387-5455) on September 11, 2026; Arrowhead Regional Medical Center (Jeff Emery, Associate CFO, 777-0708) on July 9, 2026; Purchasing (Ariel Gill, Supervising Buyer, 387-2070) on July 24, 2026; Department of Public Health (Karla Rosales, Administrative Supervisor II, 531-1795) on July 18, 2026; Probation (Iveth Herrera, Administrative Supervisor I, 387-5984) on July 9, 2026; Risk Management (Stephanie Pacheco, Staff Analyst II, 386-9039) on July 9, 2026; and County Finance and Administration (Erika Rodarte, Administrative Analyst, 387-4919) on July 31, 2026.