COUNTY OF SAN MATEO

Inter-Departmental Correspondence

San Mateo Medical Center

DATE:

February 10, 2003

BOARD MEETING DATE:

February 25, 2003

TO:

Honorable Board of Supervisors

FROM:

Luther Perry, Director of Information Services Department

SUBJECT:

Agreement with Neoforma Inc.

Recommendation

1) Waive the Request for Proposal process; and

2) Adopt a resolution authorizing the President of the Board to execute an agreement with Neoforma, Inc. to provide a Materials Management Information System.

Background

San Mateo Medical Center Materials Management Department is currently using the Simon Information System application to do daily procurement functions and inventory. This 12-year-old system is at end of service life and is no longer supported by the vendor. Its basic function is limited to data entry, receiving and a minimal reporting structure. The system can only accommodate two location codes for perpetual inventory and has no drill down capability. Simon limits San Mateo Medical Center's ability to respond to current business demands. Further, the system is unstable in the NT based environment used at the Medical Center.

Discussion

A needs assessment was conducted in July 2002 in order to determine the current and out year requirements of Materials Management. Quantec, an outside consultant, was hired to conduct a needs assessment. Based on the needs assessment, an informal RFP was conducted. This informal RFP suggested three vendors capable of meeting these requirements. Quotes were solicited from these three vendors, which are as follows: Enterprise System, Inc. (ESI), Lawson and Neoforma, Inc. The ESI and Lawson quotes ranged from $700,000 to $1 million, which are cost prohibitive in terms of investment expense, implementation costs and ongoing maintenance expense.

Neoforma is a major application service provider of next generation procurement products. Neoforma meets all of Materials Management's requirements and quoted the lowest rate. This system is designed specifically for the unique provider-chain needs of healthcare. Neoforma offers applications services that reside directly in the service delivery path of healthcare's business-to-business-to-consumer activity. Neoforma's unique service provides users with end-to-end connectivity and closed loop relationships that foster automatic medical supply replenishment and facilitate the open flow of information. It would therefore be in the County's best interest to waive the Request For Proposal process.

Vision Alignment

This Contract keeps the commitment to responsive, effective and collaborative government and goal number 20: government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain. The agreement contributes to this commitment by providing a purchasing system that will decrease staff time and minimize invoice errors.

Fiscal Impact

The term of the agreement is February 28, 2003 through February 29, 2008. The maximum amount of the agreement is $385,000. Funds are included in the Hospital and Clinics FY2002-03 adopted budget and will be included in subsequent budget requests.