REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF THE COUNTY OF SAN BERNARDINO
AND RECORD OF ACTION
March 10, 2020
FROM
WILLIAM L. GILBERT, Director, Arrowhead Regional Medical Center
SUBJECT
Title v
Purchase of Unbudgeted Fixed Asset
End
RECOMMENDATION(S)
Recommendation
1. Approve the Terms and Conditions - Products terms with BioFire Diagnostics, LLC for the purchase of two BioFire FilmArray Torch Systems with a twelve-month extended warranty and supplies at a total cost of $246,603.
2. Authorize the Auditor-Controller/Treasurer/Tax Collector to post the $54,718 budget adjustment for 2019-20, as identified in the Financial Impact Section, for the purchase of unbudgeted fixed assets (Four Votes Required).
(Presenter: William L. Gilbert, Director, 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) as total associated cost of $246,603 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. Arrowhead Regional Medical Center (ARMC) is requesting a budget adjustment in the amount of $54,718 to purchase the two BioFire System, excluding twelve-month extended warranty and supplies, as those categories have sufficient budget allocations. Approval of this item will also authorize appropriation and revenue adjustments as detailed in the following table.
|
Description |
Fund/Cost Center |
GL Account |
Action |
Amount |
|
AB85 Rate Range |
9110004200 |
40449685 |
Increase |
$54,718 |
|
Equipment |
9110004200 |
54404040 |
Increase |
$54,718 |
BACKGROUND INFORMATION
Approval of this item will allow for the purchase of an unbudgeted fixed asset item currently required by ARMC from BioFire Diagnostics, LLC (BioFire). The purchase of the BioFire System will be used in screening patients and will enable clinicians to test symptomatic patients for a panel of 20 common respiratory viruses and bacteria that cause illness.
BioFire System has unique ability to screen for multiple causes of respiratory illness using DNA/RNA extraction, purification and highly multiplexed PCR methodology in a single test; producing results in 45 minutes.
The BioFire Terms & Conditions - Products are its standard commercial sales terms and includes terms that differ from the standard County contract. The non-standard terms include the following:
1. Governing law is the State of Utah.
• The County standard contract requires California governing law.
• Potential Impact: The contract will be interpreted under Utah law. Any questions, issues or claims arising under this contract will require the County to hire outside counsel competent to advise on Utah law, which may result in fees that exceed the total contract amount.
2. The contract does not address attorneys’ fees and costs.
• 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, Utah law may affect a party’s requirement to pay the prevailing party in a legal action where no specific provision is provided in the contract.
3. The County is required to indemnify, defend and hold BioFire harmless from any third party claim related to (a) the use, possession or operation of the products inconsistent with their Instructions for use, (b) the County’s conduct of its business and operations, or (c) any breach of any covenant or any representation or warranty made by County in the contract.
• The County standard contract does not include any indemnification or defense by the County of a vendor.
• Potential Impact: By agreeing to indemnify BioFire, 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 BioFire without such limitations and the County would be responsible to defend and reimburse BioFire for costs, expenses, and damages, which could exceed the total contract amount. County Counsel cannot advise on, whether and to what extent, Utah law may limit or expand this contract term.
4. The contract does not require BioFire to meet the County’s insurance standards.
• 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: The contract does not include County standard insurance requirements. This means that the County has no assurance that BioFire 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 contract amount.
5. BioFire limits its liability to the purchase price paid by County in connection with the specific Product(s) which are the proximate cause of any such liability.
• The County standard contract does not include a limitation of liability.
• Potential Impact: BioFire’s total financial obligation for claims arising under the contract will not exceed the purchase price of the price of the particular product that caused the claim. Claims could exceed the liability cap and the contract amount leaving the County financially liable for the excess. In addition, the County’s liability under the contract is not similarly limited. County Counsel cannot advise on, whether and to what extent, Utah law may limit or expand the exclusion of limits to the extent prohibited by applicable law.
6. Payment terms are Net 30 days with late payment interest of 1.5% per month to the maximum legal limit allowed by law
• County standard payment terms are be Net 60 days with no interest or late payment penalties.
• Potential Impact: County standard processing time is 60 days or more. Failing to make a timely payment will result in a material breach of the contract, which would allow BioFire to terminate the contract and seek other legal remedies, including charging the County interest, which would exceed the contract amount.
7. Venue for claim brought under the contract is any court of competent jurisdiction
• The County standard contract requires venue for disputes in Superior Court of California, County of San Bernardino, San Bernardino District.
• Potential Impact: BioFire is located in Utah. Having no express venue in the contract means that Utah venue could be applied to this contract, which may result in additional expenses that exceed the amount of the contract.
PROCUREMENT
The purchase of the BioFire System is non-competitive as BioFire Diagnostics, LLC is the sole manufacturer and exclusive distributor, in the acute care 150 bed and larger hospital market, to manufacture a system that performs a wide array of infectious diseases screenings, producing results within 45 minutes. Purchasing supports the sole source nature of this purchase as a valid non-competitive justification.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Bonnie Uphold, County Counsel, 387-5455) on March 6, 2020; Auditor-Controller/Treasurer/Tax Collector (Erika Gomez, General Accounting Manager, 382-3196) on March 5, 2020; Purchasing Department (Leo Gomez, Purchasing Manager, 387-2063) on March 5, 2020. Finance (Amanda Trussell, Principal Administrative Analyst, 387-4773) on March 5, 2020; and County Finance and Administration (Matthew Erickson, County Chief Financial Officer, 387-5423)) on March 5, 2020.