To: Board of Supervisors
From: Anna Roth, Health Services Director
Report Title: Amendment to Purchase Order with Medline Industries, LP
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE and AUTHORIZE the Purchasing Agent, or designee, to execute on behalf of the Health Services Director, an amendment to purchase order #025465 with Medline Industries, LP to increase the payment limit by $11,000,000 to a new payment limit of $47,000,000 for medical and cleaning supplies, low unit of measure (LUM) fees and miscellaneous minor equipment for the Contra Costa Regional Medical Center (CCRMC) with no change to the original term ending June 30, 2025.
FISCAL IMPACT:
Approval of this action will result in additional expenditures of up to $11,000,000 and will be funded by Hospital Enterprise Fund I revenues.
BACKGROUND:
Medline Industries, LP (“Medline Industries”) is a global healthcare company that manufactures and distributes medical supplies, devices, and healthcare products. It provides a wide range of items such as surgical instruments, wound care products, personal protective equipment (PPE), medical devices, and everyday healthcare supplies to hospitals, nursing homes, and other medical facilities. Medline is known for its large product portfolio and focus on supply chain management, helping healthcare providers ensure efficient and reliable access to essential medical supplies.
Medline Industries is the primary distributor of medical and non-medical supplies and products for Contra Costa Regional Medical Center (CCRMC) and 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 Health Centers receive enhanced value from their participation in the Medline Vizient GPO contract.
According to Vizient’s budget impact projections for January to December 2024, market prices for supplies are anticipated to increase by 2.9% due to ongoing supply chain challenges. Additionally, the current estimated monthly expenditures of $1,000,000 have proven inadequate to meet CCRMC's requirements for essential patient and operational supplies. Allocating additional funds to the BPO with Medline Industries will improve our procurement processes, facilitate timely delivery of critical medical supplies, and enhance our overall vendor partnerships.
On June 21, 2022, the Board of Supervisors approved agenda item C.107 to execute a purchase order with Medline Industries in the amount of $36,000,000 for medical and cleaning supplies, low unit of measure (LUM) fees and miscellaneous minor equipment for the Contra Costa Regional Medical Center (CCRMC) and Health Centers, for the period from July 1, 2022, through June 30, 2025.
If this item is approved, the county’s purchases from Medline Industries will be governed by 1) the Master Distribution Agreement between the county, Medline Industries, LP, and Medline Industries Holdings, L.P., and 2) the related Vizient GPO Agreement, Supplier Agreement No. D800MS. The Master Distribution Agreement was previously approved by the Board of Supervisors on December 13, 2022 (agenda item C.44) for the period of December 1, 2022 through June 30, 2025.
CONSEQUENCE OF NEGATIVE ACTION:
If this action is not approved, CCRMC may face supply shortages, resulting in operational disruptions and delays in patient care delivery.