January 2015 PHT Board of Trustees 1
PUBLIC HEALTH TRUST BOARD OF TRUSTEES PURCHASING REPORT
January 15, 2015
TO: PUBLIC HEALTH TRUST BOARD OF TRUSTEES
FROM: PROCUREMENT MANAGEMENT DEPARTMENT
The following recommendations are made in accordance with the Trust’s “Procurement Policy” and it’s implementing “Procurement Regulation.” This report includes competitively solicited contract awards over $3,000,000, waivers of formal competition over $250,000 and other categories for Board approval as prescribed by the Procurement Regulation. The entire report has been screened and assembled by the Procurement Management Department with the direct participation of the Directors and staff, all subject to review by the Chief Procurement Officer, consultation with the Executive Staff and the President, and reviewed for legal sufficiency by the County Attorney’s Office.
SECTION I. AWARDS UNDER INVITATIONS TO BID (ITB’s)
This section consists of awards under competitively solicited Invitations to Bid (ITB’s) over $3,000,000. No items to report.
SECTION II. AWARDS UNDER REQUESTS FOR PROPOSALS (RFP’s)
This section consists of awards under competitively solicited Requests for Proposals (RFP’s) over $3,000,000. No items to report.
SECTION III. AWARDS UNDER THE COMPETITIVELY SOLICITED CONTRACTS OF OTHER PUBLIC PROCUREMENT ENTITIES
This section consists of awards over $3,000,000 under competitively solicited (“ITB,” “RFP” or equivalent) contracts of other public and nonprofit entities.
No items to report.
SECTION IV. AWARDS UNDER GROUP PURCHASING ORGANIZATION (“GPO”) CONTRACTS
This section consists of awards over $3,000,000 under Group Purchasing Organization (“GPO”) contracts. GPOs are organizations that aggregate the purchasing volume of their members consisting of hospitals and other health care providers to leverage discounts with manufacturers, distributors and other vendors to realize administrative savings and efficiencies. The Trust’s GPO is MedAssets.
No items to report.
SECTION V. AWARDS UNDER A WAIVER OF FORMAL COMPETITION
This section consists of awards over $250,000 without the formal solicitation of competitive bids or proposals. All award recommendations in this section have the approval of the President, are based on a finding that the waiver of competitive bidding is in the best interests of the Public Health Trust, and require a two-thirds affirmative vote of the Trustees present for approval.
A. Sole Source No items to report.
January 2015 PHT Board of Trustees 2 B. Physician’s Preference
Staff requests a waiver of formal competition for the contract items listed in this category because a physician and clinician have requested the particular item without which the physician and clinician cannot successfully and safely render patient care.
1. (783817, 783823-JFJ) The Perioperative Services Department requests contract awards to Depuy/Synthes Spine, a Division of Johnson & Johnson, Inc. (“Depuy/Synthes”) and Medtronic Sofamor Danek USA, Inc. (“Medtronic”) for a period of one year for the continued provision of spinal implant products and related accessories. (Ongoing purchase).
Depuy/Synthes Spine:
Medtronic Sofamor Danek USA, Inc.: $5,012,767
(For One Year)
Total approved funding: $5,012,767
Background
Depuy/Synthes and Medtronic will continue to provide to the Trust spinal implant products, generally used to fuse the spine in the neck and lower back. As part of a greater initiative to identify additional saving opportunities for the Trust without limiting product choices, procurement has conducted discussions with surgeons relative to their use of these products. The resulting feedback was that continued utilization of the spine products provided by Depuy/Synthes and Medtronic was preferred, as these products offer the physician better surgical choices.
The Physicians utilize these vendors’ products to meet the specific needs of the patient, and this has resulted in different levels of spend between vendors. As a result, for the one year contract term, the projected spend with Depuy/Synthes is $3,030,178 and with Medtronic is $1,982,589. Some of the products offered by the two vendors are similar but not exactly alike. The Physicians make their choices based on different technology types (different types of instrumentation used with spinal implant products) suited to both physician’s and patient’s needs.
The main focus of this initiative was to standardize on price in a given product category between the vendors. To this end, procurement entered into negotiations with these two current vendors, achieving reductions by line item across the majority of vendor products to realize standardized pricing. The negotiated price reduction is effective immediately after both contracts are executed. Depuy/Synthes’ pricing reflects an estimated $261,139 in savings. The pricing from Medtronic reflects approximately $143,769 in savings. The overall savings achieved through this process represents a combined 7.47 percent reduction in price based on prior paid price. Combined savings over the one-year period is estimated at $404,909. The dollars requested for each vendor have been capped and are stated as a maximum contract value in the individual agreements. ECRI and Broadjump reported that the new pricing provided by these vendors falls within the average competitive price point of the ECRI Price Guide and Broadjump Auto Price Checker databases.
In providing an evaluation of the vendors’ performance during the current contract year, the Perioperative Services Division has reported the following:
• The overall service meets standard
• There have been no complaints from patients or employees regarding these supplies • The vendor meets all requirements for the contracted service/supply
Recommendation
After review and discussion of the information presented, the Perioperative Services and Procurement Management Departments have determined that it would be in the best interest of the Trust to award physician preference contracts to Depuy/Synthes and Medtronic for the provision of spinal implant products and related accessories.
The underlying contracts can be terminated for convenience with a thirty (30) day notice and include UAP and OIG Provisions.
January 2015 PHT Board of Trustees 3
A bid waiver justification has been provided and Conflict of Interest Declarations signed by A. Panos, Professor of Surgery for JHS, Tomas A. Salerno M.D., Chief Division of Cardiothoracic Surgery, Handel Robinson, M.D., Assistant Clinical Professor, Vascular Surgery, Jorge Rey M.D., Assistant Clinical Professor, Vascular Surgery, Eliot Rosenkranz, M.D., Professor of Surgery, Pediatric Surgery, Silvia Scandar, Administrator, Medical Hospital Center, Perioperative Services, Jackson Memorial Hospital, and Alexander Raecke, Account Director, Depuy/Synthes, and Chip Lomel, Director of Contracts, Medtronic , with no reported disclosures. (M. Garcia).
2. (783819-JFJ) The Perioperative Services Department, Jackson Memorial Hospital, requests a contract award to Covidien Public Limited Company (“Covidien”) for a period of one year for the provisions of surgical mesh biomaterials specialized in the treatment of soft tissue procedures (Ongoing purchase).
Covidien Public Limited Co.: $405,000
(For one year)
Total approved funding: $405,000
Background
Covidien provides the Trust with surgical mesh biomaterials, primarily used to assist in the treatment of open and laparoscopic hernia repair surgical procedures. These products are intended to repair protrusions in the abdominal- cavity caused by a combination of pressure and opening or weakness of muscle or connective tissue. The pressure pushes an organ or tissue through the opening or weak spot. The main components of these products are designed to play a role similar to that of the body’s extracellular matrix, and are inserted in the affected area to help support organized tissue growth and reinforcement.
Covidien has established itself as a market leader in hernia repair, developing new products that reinforce established standards of care, while lowering supply cost to the Trust. It offers Permacol Surgical Implants, a porcine dermal collagen implant from which weakened tissue is removed so that a new, cellular collagen matrix is cross linked to establish dimensional stability through the body’s wound healing process; Symbotext Composite Mesh, a non- absorbable implant designed to minimize tissue attachment to the device in case of direct contact with the viscera, allowing for use in both open and laparoscopic ventral hernia repairs, and soft tissue deficiencies; and Pro Grip, a proprietary, bio-integrative synthetic tissue scaffold which is designed to play a role similar to that of the body's cellular matrix, supporting organized tissue reinforcement and long term healing. The device is designed for repair and reinforcement in a variety of soft tissue procedures.
The requested amount of $405,000 reflects a cost avoidance of $68,850 for the cost of medical/surgical consumables.
In providing an evaluation of Covidien performance during the current contract year, the Perioperative Services Department has reported the following:
• The overall service meets standard
• There have been no complaints from patients or employees regarding these supplies • The vendor meets all requirements for the contracted service/supply
In accordance with our Contractor Due Diligence Review, Covidien Public Limited Co has provided Sworn/ Notarized Statements to the Trust’s Procurement Management Department that: (1) No Lawsuits have been filed against the Company within the five(5) years prior to submittal of a bid or proposal to the Trust; (2) The companies have not defaulted in the five (5) years prior to bid or proposal submittal to the Trust; (3) the companies have not been debarred not have the firms received formal notices of on-compliance or non-performance in the five (5) years prior to proposal submittals to the Trust.
ECRI and Broadjump have reported that the new pricing provided by Covidien falls within the average and above average competitive price point for their respective databases for these products.
January 2015 PHT Board of Trustees 4 Recommendation
In the best interest of the Trust, the Perioperative Department recommends an award to Covidien for the provisions of surgical mesh biomaterials specialized in the treatment of soft tissue procedures.
This contract can be terminated for convenience with a thirty (30) day notice and includes UAP and OIG provisions.
A bid waiver justification has been provided and Conflict of Interest Declarations signed by A. Panos, Professor of Surgery for JHS, Tomas A. Salerno M.D., Chief Division of Cardiothoracic Surgery, Handel Robinson, M.D., Assistant Clinical Professor, Vascular Surgery, Jorge Rey M.D., Assistant Clinical Professor, Vascular Surgery, Eliot Rosenkranz, M.D., Professor of Surgery, Pediatric Surgery, Ana Victoria Sanchez, Administrator, Medical Hospital Center, Jackson Memorial Hospital, and, Mike Trovato, Director of Contracting, Covidien, with no reported disclosures. (M. Garcia).
C. Standardization
Items in this category have been established as the Trust standard. No items to report.
D. Non-Competitive Cooperative Purchasing
This subsection consists of awards under the contracts of other public entities that were not competitively solicited.
No items to report.
E. Miscellaneous Bid Waiver
This subsection consists of awards not falling in the other categories of waiver of formal competition but where waiver is deemed to be in the best interests of the Trust.
No items to report.
SECTION VI. OPTIONS-TO-RENEW AND CONTRACT MODIFICATIONS FOR CONTRACTS THAT WERE COMPETITIVELY SOLICITED
This section refers to existing contracts that were competitively bid (“ITB” or “RFP”) at their origin and consists of either (a) the exercise of established options to renew or (b) the execution of contract modifications for which the Procurement Policy requires prior Board approval.
No items to report.
SECTION VII. OPTIONS-TO-RENEW AND CONTRACT MODIFICATIONS FOR CONTRACTS THAT WERE AWARDED UNDER A WAIVER OF FORMAL COMPETITION
This section refers to existing contracts that were not competitively bid at their origin and consists of either (a) the exercise of established options-to renew or (b) the execution of contract modifications for which the Procurement Policy requires prior Board approval. All contracts in this section are renewals not previously authorized by the Board have the written approval of the President, are based on a finding that the waiver of full and competitive bidding is in the best interest of the Public Health Trust, and require a two-thirds affirmative vote of the Trustees present for approval.
January 2015 PHT Board of Trustees 5 SECTION VIII. MISCELLANEOUS
This section consists of procurement actions that require Board approval not included under any other section of the Purchasing Report.
SECTION VIII. MISCELLANEOUS
This section consists of procurement actions that require Board approval not included under any other section of the Purchasing Report.
3. (764401-TC) The Facilities Design and Construction and Procurement Management Departments request ratification of this one-time emergency procurement from HITT Contracting, Inc., under the "Emergency Procurement" provisions of the Procurement Regulation for required renovations needed to replace and install new cardiac catheterization lab equipment in Cath. Lab #2.
HITT Contracting, Inc.: $481,145
(One-time)
Total Funding Requested: $481,145
Background
Due to a spontaneous sprinkler head burst in Cath. Lab #2, the cardiac catheterization lab equipment was permanently damaged and needed to be replaced immediately to avoid further interruption and compromising the delivery of services to Trust patient. This was deemed an emergency given that, of the three additional existing adult catheterization labs, only one could perform peripheral cases, which could have potentially caused scheduling inefficiencies and a delay in patient care. JMH Administration contacted HITT Contracting, Inc., to perform necessary mechanical, electrical, and plumbing renovations to meet code and AHCA regulations for the new catheterization lab equipment. The funding amount requested of $481,145 includes a $50,000 contingency allowance to address any unforeseen conditions or owner-requested changes that may arise during construction.
Recommendation
In accordance to the Procurement Regulation, the procurement was limited to services necessary to immediately address the interruption of services and minimize operational impact compromising the delivery of patient care services.
An emergency request for the replacement and installation of cardiac catheterization lab equipment and associated renovations in Cath Lab #2 was approved by Martha Garcia, JMH Director of Operations; Isa Nuñez, Vice President, Facilities Design and Construction Division; Hamilton Clark, JMH Chief Financial Officer; Alex Contreras, Senior Vice President and JMH Chief Administrative Officer; Mark Knight, Executive Vice President and JHS Chief Financial Officer; Don Steigman, Executive Vice President and JHS Chief Operating Officer; and Carlos Migoya, President and JHS Chief Executive Officer; and submitted by the Facilities Design and Construction Department. The UAP and OIG provisions apply to this one-time emergency purchase. (M. Garcia).