DHS - B-13733 - Pharmacy Machines SSJF 3 11 20 signed.pdf

Sole Source Justification Form

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Bulletin Reference Number 20-444DHS-MIS44-B-13733

Requesting Agency/University Illinois Department of Human Services

Sole Source Justification Form - Part I Section I - General Information

Department/Bureau/Section: Department of Human Services/Fiscal

Need Identified Date: Feb 6, 2020 Supply/Service Need By Date: Apr 1, 2020

Project Title: Automated medication packaging machines (6) Madden/Choate/Alton/Chester/Ludeman/McFarland

Vendor: The Chudy Group/ dba TCG Rx Pharmacy Workflow Solutions

Provide a description of the supplies or services required:

Purchase of six automated medication packaging machines with a five (5) year maintenance and repair service contract for each. This is for Madden MHC, Choate MH & Dev Center, Alton MHC. Chester MHC, Ludeman hub & McFarland hub Pharmacies. The price of the machines are discounted when the repair and maintenance agreement is purchased at the same time.

Value: Not to Exceed Value of Initial Term, this Change Order or Amendment: 2,120,376.46

Will this Sole Source amend a Professional or Artistic Services contract? Yes No

*Sole Source may not be used for amendments for Professional or Artistic Services if the amendment would increase the value by more than 5% of the initial award or extend the term by more than 60 days.

Type: New Sole Economically Feasible Source

Section II - Proposed Term

One-Time Purchase Term Contract

Estimated Contract Begin Date: Apr 1, 2020

Estimated Contract End Date: Jun 30, 2025

Number of Potential Renewals: 0

Length of Each Renewal in Months: 0

Total Value of All Renewals: 0

If a Term Contract, does the term, including renewals, exceed 12 months? Yes No

If yes, provide a detailed justification including any economic benefit received for agreeing to a multi-year term:

Pricing on equipment is reduced when a 5 year maintenance and service agreement entered into at purchase.

Section III - Funding Source Select the type of funding to be used (Check all that apply): State Appropriate Funds Federal Funds Other (Explain):

Section IV - Sole Source Justification

This purchase is economically only available from a single source primarily because it is: (If "Other" explain in one sentence)

Items are Copyrighted or Patented and the Items are Only Available from the Holder. Patent # US 2017/0017775 A1

Are there secondary justification(s) for this sole source? Yes No

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Bulletin Reference Number 20-444DHS-MIS44-B-13733

Requesting Agency/University Illinois Department of Human Services

Another justification that this purchase is only available from a sole source is because it is:

Software License/Upgrade/Maintenance

Another justification that this purchase is only available from a sole source is because it is:

Compatibility of Equipment, Accessories, Replacement Parts or Service

Section V - Purchase History

Has the Agency or University Purchased these supplies or services in the past? Yes No

Term Term From Term To Value Description Contract Number Type

1 Jun 17, 2010 Jun 17, 2010 2,440,121.96 Pharmacy Automation PSD3502643 IFB

2 Jun 25, 2015 Jun 30, 2015 221,143.14 Shapiro Pharmacy Pouch Repackaging 49X1050M40 Sole Source

3 Apr 8, 2019 Apr 30, 2019 709,474.02 Elgin/Murray (2) Auto Packaging Machines and maintenance MIS0001002 Sole Source

4 Sole Source

If more than 10, or if other comments, explain:

Section VI - Business Rationale

1. Provide a detailed explanation of the need for the supplies or services:

Purchasing automation allows Madden, Choate, Alton & Chester to eliminate the drug delivery system currently being used at the four pharmacies, which is outdated. The delivery system currently used is over 35 years old, drug cassettes are rapidly wearing out and needing replaced. The drug cassettes currently used to deliver medications are special made stainless steel lockable cabinets and are approximately $500 per cabinet(priced in 2009), each facility has roughly 100-200 cassettes depending on population of residents. If these cassettes were to be have to be replaced, it would run the State roughly $50,000-$100,000 per facility. All pharmacies have seen a raw material shortage for supplies needed to manufacture unit dose drug cassettes. This has kept them from replacing the cassettes or its components. By not replacing, the overall condition of the cassettes is fair to poor and sharing supply amongst pharmacies has been tough. Each pharmacy will see a reduction in annual drug costs by going to bulk purchasing and will see a reduction in inventory value when using the automation. It is on average 25% cheaper to purchase bulk medications versus purchasing medications that are in unit dose form. Workflow efficiencies will also improve with the use of these machines. This is very important when staffing at these four pharmacies has been difficult to maintain. Pharmacists will have more time to focus on the clinical aspects of their job and be able to focus on treatment other medication options versus having to manually check each patients daily medication doses to insure zero medication errors occur. Patient safety is enhanced with the use of these machines due to less possibility of medication errors. Two machines will be used to replace current 10 year old repackaging machines at Ludeman and McFarland pharmacies. These two machines are aging and starting to need more frequent and costly repairs. There is a discount on the machine cost when a five (5) year repair and maintenance is purchased at the same time as the machine.

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Bulletin Reference Number 20-444DHS-MIS44-B-13733

Requesting Agency/University Illinois Department of Human Services

2. Provide a list and describe in detail the specifications required to satisfy the need:

6 ATP2 480 Canisters with unit dose or multi-dose packaging (includes replenishment kit, value $3500 and 1 case of paper & ribbon) 12 ULT Smart TrayRx Systems (12 ULT smartTrayRx docking stations, 12 ULT Smart TrayRx Clients, 12 Scanners, 12 Touch Screens, 12 BioMetrics, 12 UPS's, 12 Adjustable leg Kits, & 36 ULT Smart TrayRx-64 Trays.

6 Automatic Spoolers, 6 tabletop stand, 6 rolling stand and 6 cases of acrylic spools 6 ATP2 Wide lower packaging unit for ATP 2 6 ATP Series Equipment Interface to pharmacy information system.

6 On site implementation and installation training package for ATP Series.

6 five year annual service agreement for ATP with Greater than 192 canister capacity.

6 five year anual service agreement for ATP Lower Packaging Unit.

6 HEPA Vacuum for ATP Cleaning 6 HEPA replacement filter 4 ATP workflow Unit - 2 bay workstation 6 Canister Calibration Kits including the AVF-1 6 shipping expenses.

3. Provide detail explaining the justification selected in Section IV to explain why the requested supplies or services are the only ones available that can satisfy the agency or university requirements?

IDHS purchased an automated pharmacy operations system in 2010. This purchase was made through a competitive bidding process(IFB). The FastPak EXP machines are a integral part of the automated pharmacy system (RX Works), which is a proprietary system. RX Works is the pharmacy inventory system that is currently used that was purchased from the same company that held the software for the EXP machines. The EXP machine software provides a detailed inventory report using the same identifying numbering(NDC-National Drug Code & CIN(Cardinal Identifying Number) used as RX Works allowing pharmacy to properly account for all pharmacy inventoried medications in the fast and secure way. The canisters that hold each medication are calibrated by weight and the software knows exactly how many pills are in each canister in any given time. The purchase of the additional FastPak EXP/ATP2 drug packaging machines will use the existing inventory software program and after hours cabinets used in all DHS facilities. TCGRx/ Parata bought the EXP line, upgraded it and are now calling it an ATP2, TCGRx/Parata is the sole company authorized to sell and service the ATP2 Pouch packaging equipment. They are also the sole provider of the current software operating the ATP2 and EXP machines currently used in DHS pharmacies(6 machines total). Therefore, any software updates and upgrades can only be administered by TCGRx/Parata. When DHS purchased the first EXP machines back in 2010, the machine software had to be able to accept a batch system conversion file process. DHS IT at the time wrote conversion code for the Unit Dose System so that patient information can be fed into the repackaging machines via a data file. Our current Unit Dose System that is used to track daily patient medication dispensing for Medicare Part D reimbursements and general patient prescription orders and information is 30+ years old and is a batch system. If the new machines are not capable of accepting a batch system conversion, patient orders would not be able to be fed into the machines rendering them useless. If a new vendor was selected that had their own software on their own machine, the machine would have to be able to accept a batch system. The batch system data file conversion would need to be rewritten to work with the new software. If the batch system data files need to be rewritten, it would take one IT person approximately 30-45 days at 8 hours per day to rewrite the software needed to make the machines run correctly. If DoIT had staff with the knowledge to do the work at $60 per hour it would cost the State (35 days)280 hours @ $60.00/hr=$16,800, (45 days)360 hours @ $60.00/hr=$21,600. If DoIT doesn't have the staff and the knowledge to perform the tasks, the State will have to hire a contractor to perform the tasks needed. Contractor IT programmer rates are $120/hour which brings what the state will have to spend up to $33,600-$43,200 and the possibility of it taking an additional 30-45 days after the purchase of the machines to actually have them up and functional and ready to use.

4. What are the unique features of the supplies or services that are not available in any other product or by any other vendor? Provide specific quantifiable factors/qualifications:

The FastPak EXP/ATP2 drug dispensing machine is the only machine that can be used with the current automated pharmacy system in use by IDHS. These machines are integrated into the current pharmacy dispensing system(Unit Dose System) and the inventory system (RX Works). The FastPak EXP/ATP2 machines contain an inventory of medications, that inventory is maintained and replenished along with the rest of the pharmacy inventory. With a unit dosing machine other than the FastPak EXP/ATP2, that feature would not be available due to RX Works being a proprietary system, without that feature available; pharmacists have to spend more time managing inventories. Any new packaging machines from another vendor would need to be adapted to work with the Unit Dose System and RX Works. The adaptation of any machine other than the ones currently in use(if it could even be done) would be extremely time consuming(up to 45 days) and costly(up to $43,200) to the State of Illinois.

5. Has the Agency or University considered alternative supplies or services to satisfy their need? Yes No

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Bulletin Reference Number 20-444DHS-MIS44-B-13733

Requesting Agency/University Illinois Department of Human Services

5a. If no, why weren't alternatives evaluated?

This machine is part of an automated pharmacy system that IDHS has already purchased.

6. Are there resellers or distributors?

Yes No N/A

7. What efforts were made to get the best possible price (i.e. did the agency/university negotiate) and how did you determine the price for this purchase is considered fair and reasonable?

This price is in-line with the cost of the similar machines purchased via the competitive bid in 2010 and also the pricing from the purchase in 2015 and 2019.

The 2010 purchase of the machine through the IFB process was $265,322.00 per machine(without additional features). The 2015 purchase for the machine was $179,000 per machine (without additional features) and the 2019 price per machine was $190,000. The purchase price per machine in 2020 is $190, 220. The increase is less than 6% over 4 years. Pricing is discounted 23% under MSRP.

In 2019, two ATP2 automated medication packaging machines and the maintenance for the machines, was purchased for Elgin MHC and Murray DC Pharmacies. The cost of this purchase was $709,474.12. The 2020 proposed purchase for Madden, Choate, Alton, Chester, Ludeman & McFarland is a minimal increase per machine, mainly shipping costs, putting the 2020 purchase price at $2,121,674.46.

In addition, were DHS to replace the entire pharmacy automation system, the State would have to replace the current seven machines up and running and would loose the State's initial investment of 2.6 million dollars as listed above in section V. Along with any leftover packaging supplies currently stocked.

8. Will this purchase obligate the State to this vendor for future purchases such as maintenance, licensing or continuing need?

Yes No

9. What will be the financial or other impact to the State if this sole source is not approved and a competitive bid is required?

To buy a new machine not compatible with the current system, IDHS would need to buy an entirely new system to support the one machine. That would increase the cost. IDHS currently has these machines up and running at various locations throughout the State, if this Sole Source was not approved or made to go the competitive bidding process, pharmacy would have to continue using its outdated, labor intensive system that leaves a higher risk of medication errors to the IDHS resident population. This outdated system uses old deteriorating medication cassettes that will need costly repair very soon. If bid out; If the winning bidder can't provide a compatible machine, IDHS would be forced to spend money on the adaptation of the machines and their software to work with the current 35 year old drug dispensing system that IDHS is using.

10. Is there any additional information you would like to add to justify this sole source?

No.

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Bulletin Reference Number 20-444DHS-MIS44-B-13733

Requesting Agency/University Illinois Department of Human Services

Section VII

Requesting Department Representative

Requesting Department Signature Required

I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed.

Date Jan 24, 2020

Printed Name Lisa Akers E-mail Address lisa.akers@illinois.gov

Phone Number 217-785-9513

State Agency Bureau/Division Head or University Purchasing Director Approval and Signature Required

I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed. (All prior form fields will lock once this e-signature is completed)

E-mail Address jean.sandstrom@illinois.gov

Phone Number 217-557-9298 Date Mar 9, 2020

Printed Name Jean Sandstrom

Agency Bureau/Division Head or University Purchasing Director and Not a Designee

SPO Approval and Signature Required

I have reviewed and understand the contents of this Sole Source Justification and agree with the State Agency or University determination.

I have reviewed and understand the contents of this Sole Source Justification and do not agree with the State Agency or University determination. As a result, the State Agency or University must explore other sourcing methods to satisfy their need.

State Purchasing Officer Signature Phone Number Date Mar 11, 2020

Printed Name Richard (Dick) Welch E-mail Address Richard.Welch@Illinois.gov

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Bulletin Reference Number 20-444DHS-MIS44-B-13733

Requesting Agency/University Illinois Department of Human Services

Sole Source Justification Form - Part II Section I - General Information

Project Title Automated medication packaging machines (6) Madden/Choate/Alton/Chester/Ludeman/McFarland

Vendor The Chudy Group/ dba TCG Rx Pharmacy Workflow Solutions

Initial Date of Procurement Bulletin Posting

Was a Sole Source hearing held per 30 ILCS 500/20-25?

Yes - Complete Section II and III below (Section II will only be visible when this option is selected)

No - Section II not required, go to Section III below Section III - CPO Approval and Signature Required

Based on my review, I authorize the Agency/University to proceed in accordance with the published Notice referenced above.

Based upon my review, I authorize the Agency/University to proceed with the following Changes.

Based on my review, the Agency/University is not authorized to proceed with this sole source as presented and my recommendation is that it be cancelled.

Other

CPO Signature CPO Phone (217) 558-2231

Printed Name Ellen H. Daley Date

CPO E-mail Ellen.H.Daley@illinois.gov

Version 7.01 Page of Sole Source Justification Form - Part I Section I - General Information Will this Sole Source amend a Professional or Artistic Services contract?

If yes, what was the original contract value?

*Sole Source may not be used for amendments for Professional or Artistic Services if the amendment would increase the value by more than 5% of the initial award or extend the term by more than 60 days.

Section II - Proposed Term If a Term Contract, does the term, including renewals, exceed 12 months?

If yes, provide a detailed justification including any economic benefit received for agreeing to a multi-year term:

Section III - Funding Source Select the type of funding to be used (Check all that apply):

Section IV - Sole Source Justification Are there secondary justification(s) for this sole source?

Section V - Purchase History Has the Agency or University Purchased these supplies or services in the past?

Term Term From Term To Value Description Contract Number Type Section VI - Business Rationale

1. Provide a detailed explanation of the need for the supplies or services:

2. Provide a list and describe in detail the specifications required to satisfy the need:

3. Provide detail explaining the justification selected in Section IV to explain why the requested supplies or services are the only ones available that can satisfy the agency or university requirements?

4. What are the unique features of the supplies or services that are not available in any other product or by any other vendor? Provide specific quantifiable factors/qualifications:

5. Has the Agency or University considered alternative supplies or services to satisfy their need?

5a. If yes, name the alternative vendors whose supplies or services were evaluated:

5b. If yes, what were the alternatives for each vendor and why were they unacceptable? Be specific with regard to features, characteristics, requirements, capabilities and compatibility:

5c. Explain how the market evaluation was conducted?

*This evaluation is to determine available options within a market. If the evaluation is to determine quality or best suited option, this is not the appropriate source selection. Under no circumstances shall the evaluation consist of testing alternative options. These activities must be conducted in a competitive transparent environment (i.e. IFB or RFP).

5a. If no, why weren't alternatives evaluated?

6. Are there resellers or distributors?

7. What efforts were made to get the best possible price (i.e. did the agency/university negotiate) and how did you determine the price for this purchase is considered fair and reasonable?

8. Will this purchase obligate the State to this vendor for future purchases such as maintenance, licensing or continuing need?

8a. If yes, please provide details regarding future obligations and/or needs:

9. What will be the financial or other impact to the State if this sole source is not approved and a competitive bid is required?

10. Is there any additional information you would like to add to justify this sole source?

Section VII Requesting Department Signature Required I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed.

State Agency Bureau/Division Head or University Purchasing Director Approval and Signature Required I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed. (All prior form fields will lock once this e-signature is completed) SPO Approval and Signature Required Sole Source Justification Form - Part II Section I - General Information Was a Sole Source hearing held per 30 ILCS 500/20-25?

Section II - Sole Source Hearing Details The State posted to the Illinois Procurement Bulletin a description of the State's need, the justification for the sole source decision, and information regarding the opportunity to submit comments and testify at a public hearing. Notice of the hearing was also posted outside of the hearing room 48 hours prior to the hearing.

The public hearing was conducted for the purpose of receiving testimony regarding the sole source determination. The Hearing Officer recommends the following:

The following relevant documents are attached:

Section III - CPO Approval and Signature Required 9.0.0.2.20101008.1.734229 Ellen.H.Daley@illinois.gov

12 ULT Smart TrayRx Systems (12 ULT smartTrayRx docking stations, 12 ULT Smart TrayRx Clients, 12 Scanners, 12 Touch Screens, 12 BioMetrics, 12 UPS's, 12 Adjustable leg Kits, & 36 ULT Smart TrayRx-64 Trays.

6 Automatic Spoolers, 6 tabletop stand, 6 rolling stand and 6 cases of acrylic spools 6 ATP2 Wide lower packaging unit for ATP 2 6 ATP Series Equipment Interface to pharmacy information system.

6 On site implementation and installation training package for ATP Series.

6 five year annual service agreement for ATP with Greater than 192 canister capacity.

6 five year anual service agreement for ATP Lower Packaging Unit.

6 HEPA Vacuum for ATP Cleaning 6 HEPA replacement filter 4 ATP workflow Unit - 2 bay workstation 6 Canister Calibration Kits including the AVF-1 6 shipping expenses.

The 2010 purchase of the machine through the IFB process was $265,322.00 per machine(without additional features). The 2015 purchase for the machine was $179,000 per machine (without additional features) and the 2019 price per machine was $190,000. The purchase price per machine in 2020 is $190, 220. The increase is less than 6% over 4 years. Pricing is discounted 23% under MSRP.

In 2019, two ATP2 automated medication packaging machines and the maintenance for the machines, was purchased for Elgin MHC and Murray DC Pharmacies. The cost of this purchase was $709,474.12. The 2020 proposed purchase for Madden, Choate, Alton, Chester, Ludeman & McFarland is a minimal increase per machine, mainly shipping costs, putting the 2020 purchase price at $2,121,674.46.

In addition, were DHS to replace the entire pharmacy automation system, the State would have to replace the current seven machines up and running and would loose the State's initial investment of 2.6 million dollars as listed above in section V. Along with any leftover packaging supplies currently stocked.