The County of Santa Clara
California

Agreement/Amendment
67551

Approve Agreement No. 5500002279 with Abbott Diabetes Cares Sales Corporation relating to glucose meters and supplies for outpatient program in an amount not to exceed $6,000,000 for period July 1, 2013 through June 30, 2018, that has been reviewed and approved by County Counsel as to form and legality.

Information

Department:Procurement Department (Office of the County Executive)Sponsors:
Category:Agreement

Attachments

  1. Contract No 5500002279

Body

FISCAL IMPLICATIONS

There is no fiscal impact on the General Fund as a result of this action. Santa Clara Valley Health and Hospital System (SCVHHS) will utilize funds from its approved budget for these purchases. The proposed agreement will help SCVHHS realize an estimated cost savings of $525,000 for a five year period.

REASON FOR RECOMMENDATION

SCVHHS has continuous needs for glucose meters and supplies in order to provide patient care. On September 28, 2010, the Board of Supervisors approved delegation to the Director of Procurement, or designee, to issue a solicitation relating to providing blood glucose monitors and related supplies of outpatient and inpatient programs on behalf of SCVHHS for a three-year period with an option to extend for two additional years. The Procurement Department collaborated with SCVHHS customers regarding their business and operational requirements and issued a Request For Proposal (RFP) #RFP-PRO-FY11-0064 on April 6, 2011.  The RFP was posted in the bid management site, Bidsync.com with a closing date of May 26, 2011. In addition, an addendum was posted on www.bidsync.com  on May 5, 2011 to provide responses to questions received in a timely manner from interested suppliers. Proposals for outpatient program were received from Abbott, Agamatrix, Inc. (Agamatrix), Arkray, GTL Supply Solutions, LLC (GTL), Lifescan, Nova Biomedical (Nova), Roche, and VWR International, LLC (VMR). All proposals were submitted in a timely manner.

The evaluation process proceeded soon thereafter  by the Evaluation Committee (Committee) consisting of staff from the Department of Pathology and Laboratory Medicine, Pharmacy, Diabetes Education, Maternal Fetal Medicine, Inpatient Staff Development, and Ambulatory Staff  Development at SCVHHS. All proposals were evaluated and then sample units were requested from suppliers who made it to the short list to meet the County business and operational requirements and tested. Upon completion of sample tests in February 2012, Committee recommended moving Abbott and Nova into final negotiations.  Prior to the commencing negotiations, based on the information derived from additional research, the Procurement Department concluded that it might be advantageous to the County to establish a five year agreement with additional savings. Therefore, during negotiations with the suppliers, the Procurement Department requested pricing to be submitted based on a five-year contract while the initial request was for a three-year contract with the option for two additional years. It is advantageous for the County to lock in favorable pricing through a five-year contract period as permitted by the Board of Supervisors’ Policy Section 5.4.5.4.

The Procurement Departments negotiated with both suppliers on business terms, legal provisions and pricings with input from SCVHHS and County Counsel Office (CCO). In April 2012, Committee determined that Abbott’s proposal was the most advantageous and offered the best value to the County. The Committee recommended to the Director of Procurement to finalize negotiations with Abbott and proceed towards executing an agreement. For the remaining period of the negotiation with Abbott, CCO conducted extensive studies on the pricing structure and relevant provisions. CCO consulted outside counsel for opinions and drafted specific provisions on prices structures in the proposed agreement. On April 15, 2013 CCO approved the pricing structure and the relevant provisions as settled with Abbott through negotiation. As of May 3, 2013, all terms were settled with Abbott with consents from SCVHHS and CCO. CCO will submit a separate memo the Board of Supervisor to advise its legal opinion about the proposed agreement.

In comparison to the pricing that we had on the current agreement through June 30, 2012, the proposed agreement will help SCVHHS realize an estimated cost savings of $525,000 for a five year period. Abbott is also the incumbent supplier to County. When the existing contract was extended with Board approvals to allow time for CCO’s research on legal issues, as requested by the Procurement Department, Abbott agreed to exercise the negotiated lower price in the current agreement since July 1, 2012, therefore, there is additional cost savings of $105,000 to County. The total cost savings as result of the RFP process is $630,000.

It is projected that SCVHHS will spend $1,200,000 per year for glucose meters and supplies of outpatient program. Since the anticipated spend of the Agreement will exceed the $2,000,000 signature authority of the Director of Procurement, a recommendation to the Board to award the Agreement is required.

CHILD IMPACT

The recommended action will have no/neutral impact on children and youth.

SENIOR IMPACT

The recommended action will have no/neutral impact on seniors.

SUSTAINABILITY IMPLICATIONS

The recommended action will have no/neutral sustainability implications.

BACKGROUND

The purpose of blood glucose monitors is to test blood sugar level in diabetics. The data helps patients and physicians adjust medication levels, modify meal planning, and learn how food affects sugar. Glucose monitoring is helpful for those who suffer from hypoglycemia (low blood sugar) or hyperglycemia (high blood sugar). Low blood sugar and high blood sugar can cause dizziness, blurred vision, sweating, shaking, confusion and even unconsciousness. Monitoring is also important for those who are ill or taking other kinds of medicines. Illness can cause rises in blood sugar, and medicines can cause blood sugar decreases and increases.

The blood glucose monitor and related supply industry is dominated by a half-dozen of competitors. Supplies are not interchangeable between the different manufactured monitors.

There are both outpatient program and inpatient program for blood glucose monitors and related supplies. The inpatient portion of the RFP (RFP-PRO-FY11-0064) was cancelled because it did not fetch a result that meets SCVHHS’s needs and there were market changes. After being approved by the Board through MAL process, the Procurement Department issued a new RFP (RFP-PRO-FY13-0219) for inpatient program only on February 8, 2013. When the new RFP is completed, the Procurement Department will bring the resulting agreement for inpatient program to the Board for approval.

CONSEQUENCES OF NEGATIVE ACTION

SCVHHS will not have the benefit of provisions for blood glucose monitors and related supplies of the outpatient program.

STEPS FOLLOWING APPROVAL

Return one original of the executed Agreement No. 5500002279 to Jenti Vandertuig, Director of Procurement.

 

Meeting History

Jun 4, 2013 9:00 AM Video Board of Supervisors Regular Meeting
RESULT:APPROVED [UNANIMOUS]
MOVER:S. Joseph Simitian, Supervisor
SECONDER:Dave Cortese, Supervisor
AYES:Mike Wasserman, Dave Cortese, Ken Yeager, S. Joseph Simitian