B-25474 JPMC Drugs and Pharma Q and A 001 211123.pdf

Illinois Department of Central Management Services JPMC Drugs and Pharmaceuticals

21-416CMS-BOSS4-B-25474

Questions and Answers

11/23/2021

Questions Related to BEP

Q1 As far as BEP subcontracting, how would the State expect that a prime vendor partner with another wholesaler to meet the BEP requirement when it goes against A.22.1.12.? In addition, there are a lot of actual pharmacies on the BEP Certified Vendor List, how would they fit in with this requirement?

A1 Section A.22.1.12 and the BEP requirements are not mutually exclusive. Bidders must be a primary wholesaler with the ability to distribute all drug manufacturer brands and must be able to source pharmaceuticals directly from the manufacturer. Bidders must also submit a Utilization Plan (U-Plan) demonstrating how they intend to meet the BEP goal or requesting a full or partial waiver and demonstrating good faith efforts to meet the goal. Bidders can meet the goal by, among other things, subcontracting out a portion of the work that they would otherwise perform themselves, including to another BEP certified wholesaler. See the BEP Utilization Plan (U-Plan) for additional information regarding how to complete the U-Plan.

Q2 In regards to documenting responses from the BEP certified vendors, how do you prefer to see that documentation if we get no response or if we have deemed that a vendor does not fit with our business model and we need to disengage them?

A2 Part III, the Good Faith Efforts Section of the BEP Utilization Plan (U-Plan), defines the requirements necessary for successful completion of the Good Faith Effort when the Prime Bidder has exhausted every effort in meeting the BEP participation goals. In order for a Bidder’s Good Faith Effort to be determined responsive, the Bidder must contact every BEP firm certified in the NIGP Codes whose contact information is provided on the BEP vendor listing attached to the solicitation in BidBuy.

If the Prime Bidder does not contact every vendor listed on the listing, it will result in a non-responsive U- Plan. A Good Faith Efforts Contact Log is provided on page 7 of the U-Plan, which the Bidder may duplicate if needed. Supporting documentation of the Prime Bidder’s Good Faith Efforts is required and must be submitted with their bid, including copies of all emails, initial and follow-up, as well as any emails received from potential Subcontractors. It is recommended that if you do not receive a response to your email inquiries that you also contact potential Subcontractors by telephone and record any communication on the contact log. Please keep in mind that during the Good Faith Effort responsiveness review, the BEP program staff will contact each vendor recorded on the contact log to verify its accuracy.

As far as vendors who you determine do not meet your business model, Bidders can meet the goal by, among other things, subcontracting out a portion of the work that they would otherwise perform themselves. If a Bidder is unable to engage a particular BEP certified vendor, it should document evidence that it negotiated in good faith with the vendor, which must include the contacted names, mailing addresses, email addresses, and telephone numbers of the BEP certified vendor; a description of the information provided regarding the plans and specifications for the work selected for subcontracting; and evidence as to why an agreements could not be reached. Bidders should also thoroughly investigate the capabilities of BEP certified vendors and not reject a vendor as unqualified without documented reasons. See Part III of the U-Plan for additional information regarding the actions that will be evaluated to determine whether a vendor has made Good Faith Efforts to meet the goal.

Q3 Can the state elaborate on the reason the BEP requirement was raised from 8% to 9%?

A3 The BEP goal was calculated in accordance with BEP’s goal setting methodology and is based on the number of firms that are available in the NIGP Codes relevant to this solicitation at the time of the calculation. Since the BEP goal was calculated for the last solicitation there was an increase in the number of vendors that were available which increased the goal by 1%.

Q4 Would the state be open to adding additional (NIGP) codes to the certified business list as we feel there are some other opportunities for subcontracting that might fit our model a little bit better, such as courier services?

A4 Prime Vendors may use any BEP certified vendor who can perform a Commercially Useful Function under the resulting Contract through direct participation. Direct participation includes work that is directly related to the completion of the scope of work of the Contract. Indirect participation will not be counted.

“Commercially Useful Function” means responsibility for the execution of a distinct element of the work of the contract, which is carried out by actually performing, managing, and supervising the work involved, evidencing the responsibilities and risks of a business owner such as negotiating the terms of (sub)contracts, taking on a financial risk commensurate with the Contract or its subcontract, responsibility for acquiring the appropriate lines of credit and/or loans, or fulfilling responsibilities as a joint venture partner as described in the joint venture agreement.

See the U-Plan for additional information regarding "Commercially Useful Function".

Q5 How will the State verify BEP usage?

A5 Prime Vendors self-report through the Diversity Contract Monitoring System (DCMS).

https://cms.diversitycompliance.com/

Q6 A BEP business that has expressed an interest in participating on the current BIDBUY RFP# 22-416CMS- BOSS4-B-25474, will they receive a list of the prime vendors contact information?

A6 The vendors below attended the mandatory pre-bid conference held November 9, 2021. The contact information provided is the information that the State has on file in the BidBuy system which may or may not be valid.

3 R Health Care Products 2751 W. 51st Street Chicago, IL 60632 Email: randolph_rx@att.net Phone: (773)434-7186

Affinity Pharmacy 285 W Loop Road Suite 1 Wheaton, IL 60189 Email: joe.packett@affinityrxcare.com

AmerisourceBergen 501 Patriot Parkway Roanoke, TX 76262

MELLIOTT@AMERISOURCEBERGEN.COM

Cardinal Health 110, LLC https://cms.diversitycompliance.com/

7000 Cardinal Place Dublin, OH 43017 Email: alex.fox@cardinalhealth.com Phone: (614)757-5000

DMS Pharmaceutical 810 Busse Highway Park Ridge, IL 60068

J.ROTHSTEIN@DMSPHARMA.COM

RX@DMSPHARMA.COM

R&S Northeast 8407 Austin Tracy Rd Fountain Run, KY 42133 Email: bids@rsnortheast.com Phone: (270)434-2056

Q7 Are there any additional requirements of the BEP businesses at this time, such as registering in the BIDBUY portal?

A7 BEP businesses must be BEP certified as of the date of bid submission. If the BEP certified vendor is qualified as a subcontractor under the awarded prime vendor, then they will be required to be registered in BidBuy.

Q8 Is the attached Addendum on the BidBuy site for bid 22-416CMS-BOSS4-B-25474 a revised list of vendors that need to be contacted or does the original list still apply?

A8 The attachment named R-72240 JPMC Drugs and Pharmaceuticals Rebid BEP Certified Vendors 211025.xlsx is the document to be used as the list of BEP certified vendors to be contacted for your Good Faith Effort.

The attachment named BEP Addendum for B-25474.xlsx is part of a BEP goal facilitation project conducted by the Chief Procurement Officer for General Services (CPO-GS). It is NOT to be used as the list of BEP certified vendors to be contacted for your Good Faith Effort. The CPO-GS contacted the BEP certified vendors listed on R-72240 JPMC Drugs and Pharmaceuticals Rebid BEP Certified Vendors 211025.xlsx to alert the BEP certified vendors that the solicitation has been published and to also determine if the BEP certified vendors are interested in subcontracting opportunities. The BEP certified vendors listed on the attachment named BEP Addendum for B-25474.xlsx responded to the CPO-GS that they were interested in subcontracting opportunities. This in no means lessens the requirement for Prime Vendors to contact all of the BEP certified vendors on the attachment named R-72240 JPMC Drugs and Pharmaceuticals Rebid BEP Certified Vendors 211025.xlsx.

Q9 While we understand price is a significant factor, we feel the BEP participation goal is as significant. If any vendor meets the full BEP participation goal, shouldn’t this be as important as price?

A9 Per Section A.19. of the Invitation for Bid, and as required by Section 20-10(g) of the Illinois Procurement Code, if the State issues an award, the award will be made to the responsive and responsible bidder who submits the lowest price. The lowest overall price will be determined by applying the percent discount to the estimated value of the drugs and pharmaceuticals that may be ordered for each line item, then adding the resulting values for a total estimated sum. It is the State’s intent to award all line items to one vendor, but the State does reserve the right to award by line item.

Meeting the BEP goal or partially meeting the BEP goal via a Good Faith Effort is an important part of the determination that the responsible bidder who submits the lowest price is also responsive. While it is the State’s policy to promote and encourage the use of businesses owned by minorities, women, and persons with disabilities, the Illinois Procurement Code requires a contract resulting from an invitation for bid to be awarded to the lowest responsive and responsible bidder.

Q10 Can BEP providers offer Delivery and Logistics Services? There are no NIGP codes listed for these types of services, so we are confused by the most recent addendum which stated that these types of services would be an acceptable way to meet the BEP percentage? Please explain?

A10 Prime Vendors may use any BEP certified vendor who can perform a Commercially Useful Function under the resulting Contract through direct participation. Direct participation includes work that is directly related to the completion of the scope of work of the Contract. Indirect participation will not be counted.

“Commercially Useful Function” means responsibility for the execution of a distinct element of the work of the contract, which is carried out by actually performing, managing, and supervising the work involved, evidencing the responsibilities and risks of a business owner such as negotiating the terms of (sub)contracts, taking on a financial risk commensurate with the Contract or its subcontract, responsibility for acquiring the appropriate lines of credit and/or loans, or fulfilling responsibilities as a joint venture partner as described in the joint venture agreement.

See the U-Plan for additional information regarding "Commercially Useful Function".

Questions Related to Usage

Q11 Please clarify the estimated value of the Contract.

A11 The estimated value of the solicitation is approximately $100,000,000 per year, although this is not a guarantee of usage which may be higher or lower.

Q12 The State has provided some high-level usage data. Can you confirm the timeline for that, and is it possible to get that broken down by each individual purchaser?

A12 Overall usage data from 10/01/2018 through 09/30/2021 is now attached in BidBuy in the Microsoft Excel format.

Q13 Can the State please provide a more current updated Usage Report? The Usage Report provided for this bid lists many items that are no longer active from vendors that no longer exist like Ethex and Qualitest, but more puzzling is that this current usage report lists items like Acetaminophen with Hydrocodone in dosages that have been restricted by the FDA since 2014 so how can this be correct?

A13 Overall usage data from 10/01/2018 through 09/30/2021 is now attached in BidBuy in the Microsoft Excel

Q14 Can the usage report be provided in an Excel format?

A14 Overall usage data from 10/01/2018 through 09/30/2021 is now attached in BidBuy in the Microsoft Excel

General Questions

Q15 With the different entities that would be purchasing under this Contract, would we be able to apply different payment terms based off of individual credit reviews of each entity? It's also not completely clear who all the different agencies and not for profits that would be included under here.

A15 Section 5.5. of the Contract requires the vendor to extend all terms and conditions, specifications, and pricing or discounts specified in this contract for the items in this contract to all governmental units and qualified not-for-profit agencies, Section 4.1. clearly outlines the payment terms and conditions.

Section 5.2. defines “Governmental Units” as the State of Illinois, any State agency as defined in Section 1-

15.100 of the Illinois Procurement Code, officers of the State of Illinois, any public authority which has the power to tax, or any other public entity created by statute. This means that this Contract is available to all State of Illinois agencies of the Executive branch of State government, including colleges and universities. It also includes local units of government who have the power to tax, school districts and community colleges.

Section 5.3. defines “Qualified Not-for-Profit Agency” as any not-for-profit agency that qualifies under Section 45-35 of the Illinois Procurement Code and that either (1) acts pursuant to a board established by or controlled by a unit of local government or (2) receives grant funds from the State or from a unit of local government.

Q16 This is a single source bid, correct? You wouldn't award it to multiple vendors?

A16 Per Section A.19. of the Invitation for Bid, If the State issues an award, the award will be made to the responsive and responsible bidder who submits the lowest price. The lowest overall price will be determined by applying the percent discount to the estimated value of the drugs and pharmaceuticals that may be ordered for each line item, then adding the resulting values for a total estimated sum. It is the State’s intent to award all line items to one vendor, but the State does reserve the right to award by line item.

Q17 Can you elaborate on Section 1.2.7. of the Contract? When the Vendor’s website does not reflect any quantity on-hand, or quantities listed are insufficient to meet the requirements, the order may be placed with the manufacturer or another vendor. If this results in increased acquisition costs to the state, the prime vendor will be held fiscally responsible for the difference in price. We are not used to seeing something like that, so we are trying to better understand the logic behind it.

A17 The awarded vendor is expected to maintain supplies sufficient to fill all and deliver all orders per the terms of the Contract. If the awarded vendor cannot, and the State must place an order with the manufacturer or another vendor, the awarded vendor will be required to remit the difference in price to the State if the cost is higher than the State would have received contractually from the awarded vendor.

Q18 Does the state intend to purchase any specialty products on this contract, which are generally high dollar items for small patient populations such as Botox, or XTANDI?

A18 Per A.22.1.13. and A.22.1.14., Bidders are required to provide complete Wholesale Acquisition Cost (WAC) and Public Health Services (PHS) price lists. If the specialty products should be included on either price list, the bidder is required to do so.

Q19 1.2.8. of the Contract references that bulk orders (generally 1,000+ tablets) of individual drugs must be filled from the same lot and have expiration dates of a minimum of 2 years. A lot of product that we get doesn't have 2 years’ worth of expiration so, I just want to call that out as a concern.

A19 1.2.8. also notes If the Vendor is unable to meet this requirement, then the vendor must contact the ordering entity to determine if proposed expiration date is acceptable.

Q20 When you say it's the 3rd time that it's been out, is that because you've not had any bidders or no bids that met the criteria? Just looking for some more clarity there.

A20 This solicitation, 22-416CMS-BOSS4-B-25474, is the fourth solicitation.

21-416CMS-BOSS4-B-16903 was canceled per Section 1.2040 (b)(1)(E) of the Chief Procurement Officer for General Services Standard Procurement Rules: the solicitation did not provide for consideration of all factors of significance to the State

21-416CMS-BOSS4-B-17371 was canceled per Section 1.2040 (b)(1)(E) of the Chief Procurement Officer for General Services Standard Procurement Rules: the solicitation did not provide for consideration of all factors of significance to the State

21-416CMS-BOSS4-B-22340 per Section 1.2040(a) of the CPO-GS Procurement Rules provides that "[a]ny solicitation may be cancelled before or after opening" when it is "in the State's best interest". Section 1.2040(b)(1) further provides that the reasons for cancelling may "includ[e], but [are] not limited to" the reasons set forth in the non-exhaustive list provided in the rules. After consultation with the Business Enterprise Program, CMS has determined that it is in the State's best interest to cancel the solicitation, which has an estimated value of $600,000,000, and rebid in order to encourage additional participation of minority, women, and persons with disability owned businesses. CMS intends to work with BEP to confirm the BEP goal set for the contract is appropriate and will stress the importance of the participation of BEP certified vendors at a pre-bid meeting to be held after the solicitation is re-advertised

(The answer above is a correction to the answer given during the mandatory pre-bid conference held November 9, 2021, during which State staff incorrectly noted that the solicitation had been out for bid a total of three times and the first solicitation was canceled because there were no responsive bidders and the second solicitation was canceled as the awarded vendor was determined to be nonresponsive due to a BEP issue.)

Q21 In the document, it references a 140 B and WAC, but it also references applying any specific GPO pricing. If the State provides the updated utilization are you able to provide the utilization breakdown by GPO as well?

A21 The usage provided to us was provided by Department of Public Health and Department of Human Services so it will be whatever they can provide to us.

Q22 Is the State considering all factors when evaluating price? Where in the Bid response can we show that the

State will not receive any invoices for services that may incur additional fees from other vendors?

A22 All bidders must bid based on the instructions provided in the Invitation for Bid and the Line Items in BidBuy.

Deviating from the requirements of the Invitation for Bid and the Line Items in BidBuy when responding with a bid may be cause for the bid to be determined to be non-responsive.

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