REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
June 27, 2023
FROM
SHANNON D. DICUS, Sheriff/Coroner/Public Administrator
SUBJECT
Title
Agreement with Orange Photonics, Inc. for High-Performance Liquid Chromatography Cannabis Analyzer
End
RECOMMENDATION(S)
Recommendation
1. Authorize the Purchasing Agent to issue a Purchase Order for the purchase of one LightLab 3 Law Enforcement High-Performance Liquid Chromatography Cannabis Analyzer, in a total amount not to exceed $22,300.
2. Authorize the Purchasing Agent to sign a non-standard Purchase Agreement and incorporated Quotation Form, including non-standard terms, with Orange Photonics, Inc., for the purchase of one LightLab 3 Law Enforcement High-Performance Liquid Chromatography Cannabis Analyzer.
3. Direct the Purchasing Agent to transmit the executed Purchase Agreement and incorporated Quotation Form to the Clerk of the Board of Supervisors within 30 days of execution.
(Presenter: Ernie Perez, Deputy Chief, 387-3760)
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). The cost of one LightLab 3 Law Enforcement High Performance Liquid Chromatography Cannabis Analyzer (Analyzer) in the amount not to exceed $22,300 will be funded by reimbursement funds provided by the United States Department of Justice, Drug Enforcement Administration (DEA). The funding is within the Sheriff/Coroner/Public Administrator’s (Department) existing 2022-23 budget allocation (4438001000).
BACKGROUND INFORMATION
Approval of this item will authorize a Standard Purchase Agreement (SPA), and incorporated Quotation Form, including non-standard terms, with Orange Photonics, Inc. (Orange Photonics), for the purchase of one Analyzer. The Analyzer is a portable device that tests THC levels in industrial hemp to ensure that it falls below the State of California mandated maximum percentage of 0.3%. Currently, the Department does not possess any portable equipment with the ability to test THC levels or distinguish hemp from suspected marijuana. Department personnel will utilize the Analyzer during field investigations to accurately analyze cannabinoid content and immediately determine if a substance is hemp, marijuana, or a cannabidiol (CBD) product.
On April 11, 2023 (Item No. 50), the Board of Supervisors (Board) approved Agreement No. 23-281 (Federal Agreement No. 2023-37) with the DEA, in the amount of $510,000, for the reimbursement of expenses related to participation in the 2023 Domestic Cannabis Eradication/Suppression Program, for the period of October 1, 2022, through September 30, 2023.
The Department’s Gangs and Narcotics Division is comprised of highly trained sworn and civilian personnel arranged into several teams that include the Marijuana Enforcement Team (MET). MET investigates marijuana-related crimes throughout the County including, but not limited to, indoor and outdoor marijuana cultivations, illegal marijuana dispensaries, tetrahydrocannabinol (THC) extraction labs, and violations of California’s marijuana laws; MET works in cooperation with various local, state, and federal agencies.
The SPA, and incorporated Quotation Form, is Orange Photonics’ standard agreement, which includes the following non-standard terms which differ from the standard County contract:
1. The County is required to indemnify Orange Photonics against third party claims, from any and all costs, damages, and expenses (including reasonable attorney’s fees), directly or indirectly related to breach by the Department, fraud, gross negligence, or intentional or willful misconduct by the Department, or any misuse or unintended use of the equipment.
• The County standard contract does not include any indemnification or defense by the County of a contractor.
• Potential Impact: By agreeing to indemnify Orange Photonics, the County could be increasing exposure to liability. Claims that may otherwise be barred against the County, or are time or expense limited, could be brought against Orange Photonics without such limitations and the County would be responsible to defend and reimburse Orange Photonics for costs, expenses, and damages, which could exceed the total SPA amount.
2. Orange Photonics has no liability to the County or any other person or entity for loss of profits arising out of the supply of, or use of, the equipment or from any services provided. The SPA limits Orange Photonics’ entire liability for any product, goods, or service to an aggregate amount not to exceed the price the County paid for such product, goods, or service.
• The County’s standard contract does not permit the contractor to limit its liability in the performance of the contract.
• Potential Impact: Claims could exceed the SPA amount leaving the County financially liable for the excess.
3. Venue is the Commonwealth of Massachusetts.
• The County standard contract requires venue for disputes in Superior Court of California, County of San Bernardino, San Bernardino District.
• Potential Impact: Having a venue in Massachusetts may result in additional expenses that exceed the amount of the SPA.
4. Governing law is the Commonwealth of Massachusetts.
• The County standard contract requires California governing law.
• Potential Impact: The SPA will be interpreted under Massachusetts law. Any questions, issues, or claims arising under the SPA will require the County to hire outside counsel competent to advise and practice Massachusetts law, which may result in fees that exceed the total SPA amount.
5. Payment terms are Net 30 days and the County may be assessed interest at the rate of 1.5% per month, not to exceed the maximum lawful rate under any applicable law, on all late payments.
• County standard payment terms are Net 60 days with no interest or late payment penalties.
• Potential Impact: Inclusion of this non-standard term will require payment by the earlier date and may subject the County to interest and penalties for late payment.
6. The SPA requires the County to pay Orange Photonics’ attorney’s fees in the event it is a prevailing party in a lawsuit against the County.
• The County standard contract requires each party to bear its own costs and attorney fees, regardless of who is the prevailing party.
• Potential Impact: The County may be required to pay Orange Photonics’ reasonable expenses and attorney, consultant, or other professional fees in a legal action if it is the prevailing party.
7. The County may not assign the SPA in whole or in part; the SPA is silent on assignment by Orange Photonics.
• County policy requires that the County approve any assignment of a contract.
• Potential Impact: Orange Photonics may assign the contract to another entity the Department is unfamiliar with without the Department’s approval.
8. The SPA does not require Orange Photonics to meet the County’s insurance standards as required pursuant to County Policy 11-07.
• County policy requires contractors to carry appropriate insurance limits and under conditions determined by the County’s Risk Management Department as set forth in the County standard contract.
• Potential Impact: The County has no assurance that Orange Photonics will be financially responsible for claims that may arise from the County’s use of the equipment, which could result in expenses to the County that exceed the total SPA amount.
9. The SPA does not contain the standard contract provisions regarding Government Code Section 84308 (Senate Bill 1439) and the disclosure of campaign contributions to a member of the Board or other County elected officer.
• Under the County standard contract, the contractor states it has disclosed campaign contributions of more than $250 to any member of the Board or other County elected officer and completed a form providing additional information.
• Potential Impact: The County may have difficulty gathering information about campaign contributions made by Orange Photonics.
While these are notable exceptions to the County’s standard contract language, the Department recommends approval of the SPA, including non-standard terms, for the provision of one Analyzer by Orange Photonics, to allow Department’s staff to use a portable TCH content analysis device while on the field. County Counsel and Risk Management have provided input on the proposed SPA with Orange Photonics.
PROCUREMENT
The Analyzer is manufactured, and sold exclusively, by Orange Photonics. The terms in the SPA, including non-standard terms, may be used to accompany future purchase orders issued to Orange Photonics, as necessary. The Analyzer utilizes patented technology that is single source designed and developed by Orange Photonics that best meets the Department’s rigorous use when compared with other portable devices. The Purchasing Department concurs that a non-competitive single source justification exists with the manufacturer Orange Photonics.
County Policy 11-05 requires departments to obtain Board approval for the procurement of goods and services with non-standard terms and conditions.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Richard D. Luczak, Deputy County Counsel, 387-5455) on June 1, 2023; Purchasing (Michael Candelaria, Lead Buyer, 387-0321) on June 2, 2023; Risk Management (Victor Tordesillas, Director, 396-8621) on June 5, 2023; Finance (Erika Rodarte, Administrative Analyst, 387-4919) on June 9, 2023; and County Finance and Administration (Robert Saldana, Deputy Executive Officer, 387-5423) on June 11, 2023.