REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
May 19, 2026
FROM
ANDREW GOLDFRACH, ARMC Chief Executive Officer, Arrowhead Regional Medical Center
SUBJECT
Title
Agreement with Data Innovations LLC for Software Subscriptions, Professional Services, Training, Maintenance and Support Services
End
RECOMMENDATION(S)
Recommendation
1. Approve Amendment No. 1 to Agreement No. 21-646 with Data Innovations LLC, including non-standard terms, adding a Statement of Work for professional services for the implementation of the Instrument Manager™ interface system, increasing the contract amount by $74,000, from $164,411 to $238,411, and extending the term by three years, for a total term of September 14, 2021 through September 13, 2029.
2. Approve quote with Data Innovations LLC, for the purchase of Instrument Manager™ subscriptions, maintenance, support, and training in the amount of $103,725 for the term of May 19, 2026 through May 18, 2029, which incorporates, as exhibits, the following agreements:
a. Non-financial Agreement for Instrument Manager™ Maintenance and Support Services with Data Innovations LLC, including non-standard terms, for the period of May 19, 2026 through termination or expiration of all software subscription maintenance and support services.
b. Non-financial End User License Agreement with Data Innovations LLC, for use of the Instrument Manager™ software subscription, including non-standard terms, for the period of May 19, 2026 through expiration or termination of all subscription services.
3. Authorize the ARMC Chief Executive Officer to execute the project closure document when the Statement of Work referenced in Recommendation No. 1 is complete.
(Presenter: Andrew Goldfrach, ARMC Chief Executive Officer, 580-6150)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
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). The cost of $177,725 is funded by State Medi-Cal, Federal Medicare, private insurances, and other departmental revenue. Funding sources may change in the future pending any legislative activity related to the repeal and/or replacement of the Affordable Care Act. Adequate appropriation and revenue have been included in the Arrowhead Regional Medical Center (ARMC) 2025-26 budget and will be included in future recommended budgets.
BACKGROUND INFORMATION
Data Innovations LLC (DI) provides laboratory software solutions, including, Instrument Manager™ which delivers industry-leading laboratory enterprise management solutions spanning connectivity, quality, productivity, analytics and intelligence, and performance and reliability. The purchased interface allows the existing laboratory instruments to connect to the electronic health record system and provide test results and other information directly to the caregiver. The software also provides information to aid in the administration and operations of the laboratory and its testing instruments.
Approval of Amendment No. 1 to Agreement No. 21-646 (Agreement), the quote incorporating the End User License Agreement (EULA), and the Agreement for Instrument Manager™ Maintenance and Support Services (MSSA) with DI will allow ARMC to procure implementation services for the Instrument Manager™ interface system and related software subscriptions that will enhance ARMC staff proficiency in specialized laboratory information system functions, improve data accuracy, and strengthen workflow efficiency. These improvements will support the Community Connect Program between ARMC and the Department of Public Health, ensuring reliable information sharing, reducing duplication of effort, and ultimately advancing coordinated, patient-centered care for the community.
On September 14, 2021 (Item No. 7), as the result of a non-competitive procurement, the Board of Supervisors (Board) approved the Agreement with DI to provide professional services for the instrument manager interface system and software licensed by the County under Contract No. 20-1061, in the amount of $164,411 for a total contract term of September 14, 2021 through September 13, 2022. Originally, the recommendation stated the agreement term as one year, however, the Agreement remains in effect and expires on September 14, 2026 pursuant to its terms. Recommendation No. 1 aligns the contract documentation with the correct expiration date.
Additionally on September 14, 2021 (Item No. 7), the Board approved Agreement No. 21-645 with DI to provide maintenance and support services for the Instrument Manager™ interface system and software licensed by the County under Contract No. 20-1061, in the amount of $63,203, for a total contract period from September 14, 2021 through September 13, 2026. While this contract is still in effect, the maintenance and support services included under its terms apply to the on-premises version of the Instrument Manager™ software that was licensed under Contract No. 20-1061. Since 2021, DI has transitioned its software to a subscription model and no longer sells the on-premises licenses. This amendment reflects that transition and allows ARMC to maintain system functionality and vendor support under the current subscription model. As such, this procurement of Instrument Manager™ software is under the subscription model and the maintenance and support services will be covered by the MSSA in Recommendation No. 2.
On October 27, 2020 (Item No. 14), the Board approved EULA No. 20-1061 with DI. Agreement No. 20-1061 applies to the on-premises version of the Instrument Manager™ software still in use at ARMC and remains in effect. However, since DI no longer sells the on-premises licenses, this procurement of Instrument Manager™ software is under the subscription model and use of the subscription services will be covered by the EULA in Recommendation No. 3.
The quote incorporating the EULA and MSSA together comprise DI’s standard commercial agreement for Instrument Manager™ subscription services. The EULA and MSSA are non-negotiable and include terms that differ from the standard County contract and omit certain County standard contract terms. The non-standard and missing terms include the following:
1. Governing law is the State of Vermont.
• The County standard agreement requires California governing law.
• Potential Impact: The EULA and MSSA will be interpreted under Vermont law. Any questions, issues or claims arising under this EULA and MSSA will require the County to hire outside counsel competent to advise on Vermont law, which may result in fees that exceed the total Agreement amount.
2. Venue for disputes arising under the EULA is the State of Vermont, but venue for disputes arising under the MSSA is any court of competent jurisdiction in the United States.
• County Policy 11-05 requires venue for disputes in Superior Court of California, County of San Bernardino, San Bernardino District.
• Potential Impact: Having a venue in the State of Vermont, or any other venue beyond San Bernardino County, may result in additional expenses that exceed the amount of the Agreement.
3. Payment terms are Net 30 days and for maintenance and support services, DI may charge late payment interest of 12% per year.
• 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 pay Net 30 days may result in a material breach of the Agreement, which could allow DI to terminate the Agreement and seek other legal remedies, including charging the County interest for late payments for maintenance and support services at a rate of 12%, which could exceed the Agreement amount.
4. DI limits its aggregate liability under or in connection with the EULA and MSSA for any and all causes whatsoever, to the fees paid by the County to DI for the software, in the six months immediately preceding the breach for which the damages are claimed. DI disclaims all liability for any damages of third parties and any damages arising out of or related to the loss of data, transactions performed using the software or modifications to the software by the County or a third party.
• The County standard agreement 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, Vermont law may limit or expand the exclusion of limits to the extent prohibited by applicable law.
5. The County is required to indemnify, defend, and hold harmless DI against all claims, liabilities, demands, actions, losses, damages and expenses (including reasonable attorneys' fees) associated with a claim asserted against DI, arising out of bodily injury, death, or damage to property or persons which may be sustained by any third party that occurs in connection with the County’s operation of its business, to the extent that such injury or damage is caused in whole or in part by the County’s willful misconduct or gross negligence or DI’s use of the County’s data.
• The County standard agreement does not include any indemnification or defense by the County of a contractor.
• Potential Impact: By agreeing to indemnify DI, 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 DI without such limitations and the County could be responsible to defend and reimburse DI for costs, expenses, and damages, which could exceed the total Agreement amount. County Counsel cannot advise on, whether and to what extent, Vermont law may limit or expand this Agreement term.
In addition to the non-standard terms listed above, the Statement of Work (SOW) added to the Agreement with Amendment No. 1 for the implementation of the Instrument Manager™ interface also contains terms that differ from the County standard agreement. The non-standard and missing terms include the following:
1. Payments are triggered at defined time intervals rather than the provision of any services or completion of any deliverables.
• The County standard agreement makes payment due and payable as invoiced after the completion and acceptance of products/services.
• Potential Impact: By agreeing to these non-standard terms, the County could be held liable for the full cost of the Agreement even if DI fails to deliver any acceptable products/services.
2. The SOW does not include a timeline for the completion of the implementation services, and states that the parties will work together to create the implementation timeline following the project kick-off meeting.
• The County standard agreement generally includes a timeline for the completion of services.
• Potential Impact: By agreeing to these non-standard terms, the County could be held liable for the full cost of the Agreement even if DI fails to deliver any acceptable products/services.
ARMC will establish an implementation timeline with the vendor and monitor performance. ARMC recommends approval despite these risks due to the critical nature of the system and lack of viable alternatives. ARMC recommends approval of this Amendment, and the quote incorporating the EULA and MSSA including the non-standard terms, as it provides for the safety, health and social services needs of County residents by providing Instrument Manager™ software subscriptions, implementation services, and training in support of the Community Connect project at ARMC.
PROCUREMENT
The Purchasing Department supports this non-competitive procurement based on ARMC’s existing agreement with DI for the Instrument Manager™ interface system. DI is the sole provider of the Instrument Manager software currently integrated with ARMC’s laboratory systems and electronic health record environment. Continuation with this vendor is necessary to maintain compatibility, ongoing support, system functionality, and laboratory operations. Replacing the system would result in additional implementation costs, staff retraining, interface redevelopment and operational disruption.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Kaleigh Ragon, Deputy County Counsel,387-5455) on May 6, 2026; Risk Management (Stephanie Pacheco, Staff Analyst II, 386-9039) on May 4, 2026; Purchasing (Veronica Pedace, Buyer III, 387-2464) on May 6, 2026; Innovation and Technology Department (Don Le, Interim Chief Information Officer, 388-5501) on May 4, 2026; ARMC Finance (Chen Wu, Finance and Budget Officer, 580-3165) on May 4, 2026; and County Finance and Administration (Jenny Yang, Administrative Analyst, 387-4884) on May 4, 2026.