Agenda

Return

C. 90

To:	Board of Supervisors
From:	Anna Roth, Health Services Director
Date:	June 7, 2022

Contra

Costa

County

Subject:

Amendment to Purchase Order with Medline (PO #16157)

APPROVE	OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR	RECOMMENDATION OF BOARD COMMITTEE

Action of Board On: 06/07/2022

APPROVED AS RECOMMENDED

OTHER

Clerks Notes:

VOTE OF SUPERVISORS

AYE:

John Gioia, District I Supervisor
Candace Andersen, District II Supervisor
Diane Burgis, District III Supervisor
Karen Mitchoff, District IV Supervisor
Federal D. Glover, District V Supervisor

Contact:

Ronny Leffel, 925-550-2299

I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown.
ATTESTED: June 7, 2022
Monica Nino, County Administrator

BY:	, Deputy

RECOMMENDATION(S):

APPROVE and AUTHORIZE the Purchasing Agent, or designee, to execute on behalf of the Health Services Director, an amendment to purchase order (#16157) with Medline Industries, to increase the payment limit by $1,000,000 to a new payment limit of $34,000,000 for include low unit of measure (LUM) services provided to Contra Costa Regional Medical Center (CCRMC), and extend the term through June 30, 2022.

FISCAL IMPACT:

Approval of this amendment will result in additional expenditures of up to $1,000,000 and will be funded by 90% Hospital Enterprise Fund I revenues and 10% American Rescue Plan Act allocations.

CONSEQUENCE OF NEGATIVE ACTION:

If this action is not approved, CCRMC and Contra Costa Health Centers will not be able to pay this vendor for services rendered in good faith and as requested by Health Services Department staff.

BACKGROUND:

Medline Industries is the primary distributor for medical and non-medical supplies and products for the CCRMC and Contra Costa Health Centers. They have been awarded a Vizient Group Purchasing (GPO) agreement for the distribution of contracted and non-contracted supplies. As a Vizient member, the CCRMC and Contra Costa Health Centers receive enhanced value from their participation in the Medline Vizient contract. Additionally, administrative fees and program rebates are paid quarterly to the County for participating in the Vizient Medline agreement.

In addition to providing medical supplies, surgical supplies, laboratory supplies, diagnostic imaging supplies, cleaning supplies, disaster supplies, and miscellaneous minor equipment for CCRMC and the Contra Costa Health Centers, Medline also provides low unit of measure (LUM) services for CCRMC. CCRMC's space constraints create challenges for providing a Low Unit of Measure (LUM) distribution program. The square footage and floor plan of the warehouse is inadequate to store and properly inventory the thousands of Store Keeping Units (SKUs) maintained on the static carts. Therefore, CCRMC utilizes Medline to maintain the items stocked on the carts and to be distributed to the various units and clinics that are not available from the CCRMC warehouse.

On June 11, 2019, the Board of Supervisors authorized a purchase order with Medline Industries, Inc, in an amount not to exceed $33,000,000 for medical supplies, cleaning supplies, disaster supplies, and miscellaneous equipment for the Contra Costa Regional Medical Center (CCRMC) and Contra Costa Health Centers, for the period from June 27, 2019 through June 26, 2022. This request did not specify the utilization of LUM services.

Since the purchase order in place does not specify LUM services, the Department has not been able to pay the vendor's invoice charges for LUM fees. This Board Order will increase the payment limit by $1,000,000 to cover the LUM service fees during the duration of the purchase order, and extend the term from June 26, 2022 to June 30, 2022. The Department has also determined that Medline Industries is entitled to payment for the value of the services provided under the equitable relief theory of quantum meruit. The theory provides that where a vendor has been asked to provide services without a valid agreement, and the vendor does so to benefit the recipient, the vendor is entitled to recover the reasonable value of those services.