RFR MED47 RxPrime 10-6-15Rev1.doc

The Commonwealth of Massachusetts

Executive Office For Administration and finance

Operational Services Division

One Ashburton Place, 10th Floor, Room 1017, Boston, Massachusetts 02108-1552

Request for Response (RFR) Document Title: Pharmaceutical Prime Vendor ASK "RFR Number/Document Number" \* MERGEFORMAT Agency Document Number: MED47 COMMBUYS Bid#: BD-16-1080-OSD03-OSD03-00000005237 10/06/15 Rev1-Change to Reference Letter Requirements

RFR Introduction and General Description

11.1 Procurement Scope and Description

11.2 Background information

21.3 Applicable Procurement Law

21.4 Number of awards

21.5 Adding Contractors after initial Statewide Contract award

21.6 Prime Vendor Must Supply PGPO and all other Pharmaceuticals

21.7 Eligible Entities

31.8 Acquisition Method(s)

31.9 Own Use Statement

31.10 Contract Duration

31.11 Estimated Value of the Contract

31.11.1 Basis for estimated dollar value for this Statewide Contract (including all options to renew)

Estimated Procurement Calendar

42.1 Written questions via the Bid Q&A on COMMBUYS

52.2 Locating Bid Q&A

52.3 Oral Presentations

52.4 Debriefing

Specifications

63.1 Bidder Qualifications

63.1.1 Company certifications and affiliations

63.1.2 Company experience

73.1.3 Financial stability including bankruptcy, litigation and contract defaults

73.1.4 References and reference information and/or requirements

83.2 Commodity Specifications

83.2.1 Approvals and standards (UL, CE, FCC, FDA, ASTM, IEEE)

8A Bidder must only sell pharmaceuticals that are FDA approved or exempt from FDA approval.

83.2.2 Warranties and guarantees

83.2.3 Emergency response plans/preparedness

83.2.4 Emergencies Beyond Control of Contractor or Eligible Entity

83.2.5 Geographic service and delivery areas

83.3 Environmental Specifications

83.3.1 Executive Order 515, Establishing an Environmental Purchasing Policy

93.3.2 Environmental plan

103.4 Compensation Structure/Pricing

123.5 Supplier Diversity Program (SDP) Plan

133.5.1 Supplier Diversity Program Subcontracting Policies

133.6 Participation in the OSD’s Annual Marketing Event, MASSbuys

143.7 Requirements for Doing Business after a Contract Has Been Awarded

143.7.1 Statewide Contract Administration Fee and Report

163.7.2 Additional Report Requirements Engagement (Sales) and SDP Spend & Due Dates

173.7.3 Real Time Reports Through Prime Vendor

173.7.4 Continued qualification based on performance

173.7.5 Contract Management (Contractor’s interface with Commonwealth’s Contract Manager)

203.7.6 Primary Contact for State Office of Pharmacy Services (SOPS)

203.7.7 Orders (Contractor’s Interface with Commonwealth Agencies)

233.7.8 Alternatives

Evaluation criteria

244.1 Mandatory requirements

244.2 Desirable specifications

244.3 Alternatives

244.4 Evaluation Components

244.4.1 Price 75% Weight

254.4.2 Supplier Diversity Plan (formerly Affirmative Market Plan) 10% Weight

254.4.3 Other desirable or optional specifications 15% Weight

25Environmentally Preferable Products (Form posted with COMMBUYS Bid), Pass Through Shipping from a majority of a Bidders manufacturers (mandatory question on COMMBUYS), Access to bidders own generic Rx and OTC primary contracts (mandatory question on COMMBUYS).

HOW TO SUBMIT A QUOTE / RESPOND TO THIS BID

265.1 Quote Submission Method

265.2 COMMBUYS Quote Submission Training and Instructions

265.3 COMMBUYS Support

275.4 Bid Opening Date/Time

275.5 Quote Contents

275.5.1 RFR Submission Checklist

275.5.2 Additional Quote Terms

285.6 Quote Materials

285.6.1 Electronic Signatures

285.6.2 Ink Signatures

285.7 Limits and Restrictions

285.7.1 Document Pages

295.7.2 File Naming Conventions

295.7.3 File Format Restrictions

295.8 Withdrawing a Quote

295.8.1 Prior to Bid Opening Date/Time

295.8.2 After Bid Opening Date/Time

APPENDIX 1 – Required Terms for all Statewide RFRs

306.1 General Procurement Information

306.1.1 Alterations

306.1.2 Bidder’s Contact Information

306.1.3 COMMBUYS Market Center

306.1.4 COMMBUYS Subscription

316.1.5 Multiple Quotes

316.1.6 Quote Content

316.1.7 Costs

316.1.8 Electronic Funds Transfer (EFT)

316.1.9 Executive Order 509, Establishing Nutrition Standards for Food Purchased and Served by State Agencies

326.1.10 Minimum Quote Duration

326.1.11 Ownership of Submitted Quotes

326.1.12 Prohibitions

326.1.13 Public Records Law

326.1.14 Reasonable Accommodation

326.2 Evaluation – Best Value Selection and Negotiation

336.3 Terms and Requirements Pertaining to Awarded Statewide Contracts

336.3.1 Commonwealth Tax Exemption

336.3.2 Contractor’s Contact Information

336.3.3 Contractual Status of Orders and Service Contracts

336.3.4 Emergency Standby Commodities and/or Services

336.3.5 HIPAA: Business Associate Contractual Obligations

346.3.6 Pricing: Federal Government Services Administration (GSA) or Veteran’s Administration Supply

346.3.7 Pricing

346.3.8 Publicity

346.3.9 SaveSmart Program ($ave$mart)

346.3.10 Statewide Contractor Marketing Requirements

356.3.11 Subcontracting Policies

356.3.12 Transaction Fee

APPENDIX 2 - Instructions for Execution and Submission of Commonwealth Standard Forms

367.1 Commonwealth Standard Contract Form

367.2 Commonwealth Terms and Conditions

377.3 Request for Taxpayer Identification Number and Certification (Mass. Substitute W9 Form)

377.4 Contractor Authorized Signatory Listing

387.5 Supplier Diversity Program (SDP) Plan Form #2 – Declaration of SDP Partners

387.6 Supplier Diversity Program (SDP) Plan Form #1 – SDP Plan Commitment

387.7 Additional Environmentally Preferable Products / Practices

387.8 Business Reference Template

387.9 No Form Provided

APPENDIX 3 - Instructions for Vendors Responding to Bids Electronically through COMMBUYS

GLOSSARY

1 RFR Introduction and General Description

1.1 Procurement Scope and Description

The Commonwealth of Massachusetts and the Pharmaceutical Prime Vendor Strategic Sourcing Services Team (SSST) are soliciting Bidders for the acquisition of prescription pharmaceuticals, non-prescription pharmaceuticals, and related pharmaceutical supply items and equipment such as pill counters, Med Carts or an MTS system from vendors/manufacturers either commonly owned by the bidder’s parent company or outside companies. The resulting Contract will be the primary Statewide Contract used by Executive Agencies of the Commonwealth for the goods and services covered by the Contract. The Statewide Contract will also be available for use by other Eligible Entities listed below. Each Commonwealth Agency and eligible entity is responsible for executing its own purchase orders and paying its own invoices for goods and/or services acquired from this Statewide Contract. Contractors will be responsible for marketing their goods and/or services to Commonwealth Agencies and other Eligible Entities.

1.2 Background information

The Commonwealth, since 1992, has purchased most of its pharmaceuticals from the Prime vending method of distribution. The Commonwealth’s current Prime vending SWC MED38 with Cardinal Health began on July 1, 2009 and will end on June 30, 2016.

Since 1994 the Commonwealth has used a Pharmaceutical Group Purchasing Organization (PGPO) to establish the Acquisition Price (see Glossary) for most drugs with their manufacturer. The current (PGPO) contract SWC MED48 with Managed Health Care Associates (MHA) of Florham Park, NJ will end on June 30, 2021 The Commonwealth has the right to change PGPO during the life of the Prime Vending contract. .

More detailed information about SWCs MED38 and MED48 is available on www.commbuys.com

State Office of Pharmacy Services (SOPS): There are 12 State facilities and 35 State correctional facilities whose pharmacy services are managed by SOPS. The average combined daily patient census is approximately 30,000. The Pharmacy Distribution Center (PDC) located in Tewksbury Massachusetts dispenses 24 million solid dosage units a year either as unit doses (UD) in Pyxis Medstations or bingo cards. The PDC purchases over 75% of the dollar volume of the current contract. The Lemuel Shattuck Hospital a facility under SOPS located in Jamaica Plain Boston MA does its own dispensing and purchases over 15% of the dollar volume.

Historically over 90% of the purchases from the current Prime Vendor have been from the facilities paying 7 days from receipt of a weekly statement. Payment periods for the contract resulting from this RFR will be: 45, 30, 20, 15, 10 days from receipt of invoice AND 7 days from receipt of weekly statement (not individual invoice). Paying from the weekly statement averages the payment of invoices greater than 7 days from invoice receipt date with payment of invoices earlier than 7 days from invoice receipt date.

In the current contract, pricing is the Acquisition Price (see Glossary) of a drug minus the Prime Vendor’s discount percentage (also called a negative markup) ranging from: Acquisition Price minus 2.97% for payment 45 days from receipt of invoice to Acquisition Price minus 4.10% for payment 7 days from receipt of weekly statement. If no Acquisition Price is established, then the item’s Acquisition Price will never exceed the drug’s manufacturer published Wholesale Acquisition Cost (WAC). When a Purchaser requests that the vendor order a product it does not carry or list on its online catalog to be dropped shipped directly from a manufacturer to the Purchaser, the Prime Vendor’s discount percentage (also called a negative markup) will be zero percent (0%) in determining the Net Price (the Purchaser pays the vendor the same price the manufacturer charged the vendor).

1.3 Applicable Procurement Law

This Bid is issued under MGL c. 7, § 22; c. 30, § 51, § 52; and 801 CMR 21.00 (Goods and Services)

1.4 Number of awards

The target maximum number of Contractors is one. This is a target number; the SSST may award more Statewide Contracts if it is in the best interests of the Commonwealth to do so.

1.5 Adding Contractors after initial Statewide Contract award

If, over the life of the Contract, the SSST determines that additional Contractors should be added, these may first be drawn from qualified companies which responded to this Bid but were not awarded contracts. If necessary to meet the requirements of the Commonwealth, the Bid may be reopened to obtain additional Quotes.

1.6 Prime Vendor Must Supply PGPO and all other Pharmaceuticals

The Prime Vendor must also provide pharmaceuticals that are not obtained though PGPO contracts. All products must be provided at the same Acquisition Price minus the Prime Vendor’s discount percentage (also called a negative markup).

All Pharmaceuticals and related items that are commonly sold by drug wholesalers are considered to be on contract and may be purchased from the Prime Vendor. If no Acquisition Price is established for an item then the Acquisition Price used will never exceed the published Wholesale Acquisition Cost (WAC).

In some cases the Prime Vendor may be able to provide the Commonwealth a lower price than is available through a PGPO contract. If the Prime Vendor can offer special lower pricing the Commonwealth may take advantage of it.

The Commonwealth in certain cases can obtain an Acquisition Price lower than the PGPO can. Drug manufacturers on certain products offer significantly lower prices to State governments than they will offer through a PGPO. In other cases the Commonwealth has achieved a lower Acquisition Price because we have been able to provide high market share on certain drugs.

1.7 Eligible Entities

Any Contract resulting from this Bid will be open for use by the following types of entities:

1. Cities, towns, districts, counties and other political subdivisions;

2. Executive, Legislative and Judicial Branches, including all Departments and elected offices therein;

3. Independent public authorities, commissions and quasi-public agencies;

4. Local public libraries, public school districts and charter schools;

5. Public hospitals owned by the Commonwealth;

6. Public institutions of higher education;

7. Public purchasing cooperatives;

8. Non-profit, UFR-certified organizations that are doing business with the Commonwealth;

9. Other states and territories with no prior approval by the State Purchasing Agent; and

10. Other entities when designated in writing by the State Purchasing Agent.

Each eligible entity is responsible for executing its own purchase orders and paying its own invoices for goods and/or services acquired from this Contract. Contractors will be responsible for marketing their goods and/or services to Commonwealth Agencies and other Eligible Entities.

1.8 Acquisition Method(s)

The acquisition method to acquire goods and/or services from this Bid is outright purchase.

1.9 Own Use Statement

All Pharmaceuticals purchased in accordance with this Contract are for use within Commonwealth of Massachusetts Agencies, and Eligible Entities, and will be dispensed in accordance with the guidelines of Abbott Labs v Portland Retail Druggists Association Inc. 96 S.Ct. 1305 (1976) for Hospital exemption under the Robison-Patman Act. Absolutely no products will be resold or redistributed outside the aforementioned governmental agencies, i.e. the products shall be used for the institutions “own use” as defined in Abbott Labs v Portland Retail Druggists Association Inc. 95 S.Ct 2655 1974. Furthermore, all goods and materials purchased in accordance with the Contract will be used in “traditional governmental functions” as that term is used in Jefferson County Pharmaceutical Association v Abbott Labs 103 S.Ct 1011 (1993)

Eligible Entities that are eligible to purchase legend drugs (drugs requiring a physician’s prescription) will be restricted to those facilities having a licensed pharmacy or equivalent such as; the Massachusetts Department of Public Health purchasing vaccine and tuberculosis drugs for free distribution to various boards of health and clinics.

1.10 Contract Duration

The initial term of this Contract is five years. In addition, this Contract has two options to renew of up to one year each with a maximum Contract term of seven years (including the initial term and all possible renewal options).

1.11 Estimated Value of the Contract

The estimated value of purchase(s) resulting from this Bid including option years is $225 million. The Commonwealth makes no guarantee that any commodities or services will be purchased from any Contract resulting from this Bid. Any estimates or past procurement volumes referenced in this Bid are included only for the convenience of Bidders, and are not to be relied upon as any indication of future purchase levels.

1.11.1 Basis for estimated dollar value for this Statewide Contract (including all options to renew) This Estimated Value was derived by reviewing Contractor sales reports to Commonwealth of Massachusetts Eligible Entities for FY 14 and FY15.

2 Estimated Procurement Calendar

Times are Eastern Standard/Daylight Savings (US), as displayed on the COMMBUYS system clock displayed to Bidders after logging in. If there is a conflict between the dates in this Procurement Calendar and dates in the Bid’s Header, the dates in the Bid’s Header on COMMBUYS shall prevail. Bidders are responsible for checking the Bid record, including Bid Q&A, on COMMBUYS for Procurement Calendar updates.

2.1 Written questions via the Bid Q&A on COMMBUYS

The “Bid Q&A” provides the opportunity for Bidders to ask written questions and receive written answers from the SSST regarding this Bid. All Bidders’ questions must be submitted through the Bid Q&A found on COMMBUYS (See “Locating Bid Q&A,” below). Questions may be asked only prior to the Deadline for Submission of Questions stated in the Estimated Procurement Calendar. The issuing department reserves the right not to respond to questions submitted after this date. It is the Bidder’s responsibility to verify that the questions entered into the Bid Q&A are recorded in COMMBUYS and appear on the Bid Q&A page.

Please note that any questions submitted to the SSST using any other medium (including those that are sent by mail, fax, email or voicemail, etc.) will not be answered. To reduce the number of redundant or duplicate questions, Bidders are asked to review all questions previously submitted to determine whether the Bidder’s question has already been posted.

Bidders are responsible for entering content suitable for public viewing, since all of the questions are immediately accessible to the public. Bidders must not include any information that could be considered personal, security sensitive, inflammatory, incorrect, collusory, or otherwise objectionable, including information about the Bidder’s company or other companies. The SSST reserves the right to edit or delete any submitted questions that raise any of these issues or that are not in the best interest of the Commonwealth or this Bid.

All answers are final when posted. Any subsequent revisions to previously provided answers will be dated.

It is the responsibility of the prospective Bidder and awarded Contractor to maintain an active registration in COMMBUYS and to keep current the email address of the Bidder’s contact person and prospective contract manager, if awarded a contract, and to monitor that email inbox for communications from the Purchasing Department, including requests for clarification. The Purchasing Department and the Commonwealth assume no responsibility if a prospective Bidder’s/awarded Contractor’s designated email address is not current, or if technical problems, including those with the prospective Bidder’s/awarded Contractor’s computer, network or internet service provider (ISP) cause email communications sent to/from the prospective Bidder/Awarded contractor and the Purchasing Department to be lost or rejected by any means including email or spam filtering.

2.2 Locating Bid Q&A

Log into COMMBUYS, locate the Bid, acknowledge receipt of the Bid, and scroll down to the bottom of the Bid Header page. The “Bid Q&A” button allows Bidders access to the Bid Q&A page.

2.3 Oral Presentations

If the SSST deems it necessary, selected Bidders who are asked to participate in Oral Presentations will be expected to prioritize this in their schedules. The SSST will make every effort to find a mutually convenient time for the Bidder and the SSST. However, failure to appear at the scheduled time of the presentation/demonstration may result in disqualification, reduction of points or other action that the SSST deems appropriate.

2.4 Debriefing

The SSST will conduct debriefings for unsuccessful Bidders, if requested within 14 calendar days of the resulting Master Blanket Purchase Order being posted on COMMBUYS. The SSST will provide debriefing guidelines in advance of each debriefing.

3 Specifications

Additional required terms appear in the Appendices to this RFR.

3.1 Bidder Qualifications

Bidders may in their response provide additional statements and proofs of their qualifications and capacity to meet the needs of the Commonwealth as a Pharmaceutical Prime Vendor. The Commonwealth may at any time during the evaluation process request the additional information from a Bidder. The Commonwealth is aware of 3 national drug wholesalers with apparent qualifications and capacity to meet its needs: AmerisourceBergen, Cardinal Health, and McKesson. The Commonwealth will consider bids from other drug wholesalers that can show they have the qualifications and capacity to be evaluated as the Commonwealth’s Pharmaceutical Prime Vendor.

3.1.1 Company certifications and affiliations

Statutory, certification and license requirements A Bidder must be licensed as a Drug Wholesaler in Massachusetts and have both Federal and Massachusetts DEA licenses.

3.1.2 Company experience

Business background A Bidder must be a Drug Wholesaler and show it has the capacity and the experience to meet the needs of the Commonwealth for a Pharmaceutical Prime Vendor. The Bidder must be knowledgeable and experienced in all the major aspects of pharmacy, contracting, distribution, Prime Vending, charge backs, computer data (information technology) as it relates to this RFR. The Bidder must have an excellent reputation and proven track record in managing contracts with the industry. The Bidder must also have existing relationships and work routinely with most drug manufacturers and pharmaceutical group purchasing organizations. The SSST reserves the right to disqualify bidders with references averaging below a level of “Good” as not meeting existing relationships requirements (see reference Templates posted on COMMBUYS with this Bid). Please note that the SSST reserves the right to speak to Bidders manufacturer suppliers and Group Purchasing Organizations not submitting references as well as those who did submit them. Such additional references independently contacted by the SSST will be asked the same questions as the Reference Template and averaged into the overall referencing rating of a bidder.

Existing Relationships with Pharmaceutical Group Purchasing Organizations (PGPOs)

A Bidder must currently have established working relationships with major Pharmaceutical Group Purchasing Organizations. In the event the Commonwealth uses a PGPO that the Bidder currently does not have a relationship with the Bidder must agree to establish a relationship with the selected PGPO. The current Commonwealth PGPO is Managed Healthcare Associates (MHA) of Florham Park, NJ. The Commonwealth has the right to change PGPO during the life of the Prime Vending contract.

Years in the industry of the Bid A Bidder must have been engaged in the business of a U.S. Pharmaceutical Wholesaler Prime Vendor for at least (5) five years at the time of Quote submission.

3.1.3 Financial stability including bankruptcy, litigation and contract defaults

Financial information

Bidders must have sufficient sales and financial stability as described in this section to demonstrate their capacity to meet the needs of the Commonwealth Mandatory questions about this section posted in COMMBUYS must be answered for a Quote to be considered. The SSST reserves the right to disqualify bidders as not meeting capacity requirements based on sales volume, or bankruptcy/litigation information, or days past terms to pay.

Gross annual U.S. revenue for most recently completed fiscal year During their most recently completed Fiscal Year, a Bidder must have had at least $10 Billion in U.S. Pharmaceutical sales.

Last bankruptcy and current/pending litigation

Bidders must indicate the date if any of their last bankruptcy filing, and status of the filing. Bidders must also list the creditor and amount of any current litigation over unpaid bills.

Current days to pay <supplier invoices> Bidders must certify that during the previous 12 months, they did not exceed 120 days past terms to pay.

3.1.4 References and reference information and/or requirements

Bidders must upload with their bid a minimum of three (3) and a maximum of five (5) letters of reference from their most recent year largest dollars billed customers. Additional categories of optional reference letters which may be uploaded: a maximum of fifteen (15) letters of reference from your most recent year largest dollar volume manufacturer suppliers; a maximum of ten (10) letters of reference from your most recent year largest dollar volume Pharmaceutical Group Purchasing Organizations. The reference letters must be on the references’ letterhead signed by a principal of the reference organization, using the template with instructions provided on COMMBUYS. Download this template and have it completed; then include the signed references with your online submission. References from MA state government are desirable, but not required. Please note that the SSST reserves the right to speak to Bidders manufacturer suppliers and Group Purchasing Organizations not submitting references as well as those who did submit them.

The following list of SSST Members/Advisors cannot be utilized as references:

3.2 Commodity Specifications

3.2.1 Approvals and standards (UL, CE, FCC, FDA, ASTM, IEEE)

A Bidder must only sell pharmaceuticals that are FDA approved or exempt from FDA approval.

3.2.2 Warranties and guarantees

A Bidder must only buy pharmaceuticals directly from the drug’s manufacturer and/or have an effective program in place that tracks the pedigree of the drug from time of manufacture to sale.

(See Definition of pedigree in the Glossary)

3.2.3 Emergency response plans/preparedness

In a declared state of emergency where the safety and wellbeing of Commonwealth citizens are at risk, contractors may be asked to supply the Commonwealth with the commodities and/or services under the Statewide Contract on a priority basis. The Bidder’s Quote should include the following:

Indicate whether there is a written Continuity of Operations Plan (COOP) that describes how the company will continue to do business in case of an emergency.

A list of emergency contact information including name, position/title, phone, email and cell phone.

A list of the Bidder’s building location (s) that would be available to serve the Commonwealth during an emergency.

A description of the areas of Massachusetts that the Bidder could supply in the event of an emergency (e.g., Entire State, Specific City or Region).

This information will not be considered in the evaluation of the Quote.

3.2.4 Emergencies Beyond Control of Contractor or Eligible Entity

As specified in item 4 of the Commonwealth Terms & Conditions: “Upon immediate notification to the other party, neither the Department nor the Contractor shall be deemed to be in breach for failure or delay in performance due to Acts of God or other causes factually beyond their control and without their fault or negligence. Subcontractor failure to perform or price increases due to market fluctuations or product availability will not be deemed factually beyond the Contractor's control.”

3.2.5 Geographic service and delivery areas

A Bidder must be able to meet delivery requirements listed elsewhere in this RFR for any location in Massachusetts.

3.3 Environmental Specifications

3.3.1 Executive Order 515, Establishing an Environmental Purchasing Policy

Products and services purchased by state agencies must be in compliance with Executive Order 515, issued October 27, 2009. Under this Executive Order, Executive Departments are required to reduce their impact on the environment and enhance public health by procuring environmentally preferable products and services (EPPs) whenever such products and services perform to satisfactory standards and represent best value, consistent with 801 CMR 21.00. In line with this directive, all contracts, whether departmental or statewide, must comply with the specifications and guidelines established by OSD and the EPP Program. EPPs are considered to be products and services that help to conserve natural resources, reduce waste, protect public health and the environment, and promote the use of clean technologies, recycled materials, and less toxic products. Questions concerning the EO or the appropriate specifications may be directed to OSD’s EPP Procurement Program, www.mass.gov/epp. The Order can be seen at http://www.mass.gov/governor/docs/executive-orders/executive-order-515.pdf.

3.3.2 Environmental plan

Beginning the first year of the Statewide Contract and throughout the life of the Statewide Contract, awarded Bidders must agree to work with OSD and the SSST to examine the feasibility of implementing an environmental plan. The objective of this requirement is to actively encourage suppliers to incorporate sustainable practices throughout their business operations and further market such practices to Contract users. Such a plan may include, but not be limited to, the following:

Implementing energy efficiency initiatives at the corporate level in line with Executive Order 484, such as lighting retrofits, purchase of energy from renewable sources, use of bio-heat fuel, and other energy reduction technologies.

Encouraging environmental initiatives at a corporate and/or manufacturing level for the purpose of reducing the impact of manufacturing on the environment; such as clearly identifying recycled content of packaging on the packaging, providing product life cycle assessments, working toward the elimination of ozone depleting chemical usage in the manufacturing or refining process (where applicable), and conducting internal environmental auditing related to pollution control.

Adopting standards and/or obtain certifications, where applicable, for product development and manufacturing processes such as but not limited to LEED, ISO 14001, Cradle to Cradle (C2C) Protocol, Green Seal, Environmental Choice and others.

Using alternative fuel vehicles for delivery or transportation purposes and/or vehicles equipped with diesel emission control devices and operating such vehicles with guidance on anti-idling initiatives.

Working with the SSST to develop and distribute information and/or materials to Commonwealth customers on the Awarded Bidder’s environmental practices and initiatives throughout the term of the Contract.

Developing a plan to implement the recycling of materials used or produced in normal business operations.

The SSST may award points to Bidders who provide evidence that measures and initiatives such as these are already in place within their operations, and/or for written proposals submitted with their Quote detailing a commitment to action contingent upon receipt of a Contract award. (See the Additional Environmentally Preferable Products / Practices form on COMMBUYS).

3.4 Compensation Structure/Pricing

The Acquisition Price (see Glossary) minus the Prime Vendor’s discount percentage (also called a negative markup) will establish the Net Price a Commonwealth Purchaser will pay for a drug. This Net Price structure is in place in the current MED38 Pharmaceutical Prime Vendor contract.

3.4.1 Tiered percentage markup based on payment dates

The Commonwealth’s Standard Payment Term is 45 days from receipt of invoice. In addition to pricing for the 45 day payment a Bidder is expected to offer lower prices (larger negative percentage markup) for payments 30 days, 20 days, 15 days, 10 days from receipt of invoice AND 7 days from receipt of a weekly statement. The 7 day payments will be from the date of receipt of a weekly statement. Currently SOPS and Shattuck Hospital are committed to payments within 7 days of receipt of a weekly statement.

The Bidder must recognize and agree that at the start of a Commonwealth Fiscal Year when Purchasers may not be able to meet their commitments to their usual payment schedule; that for July, August and September, the Bidder will not increase the price to that of a longer payment period. Once a Purchaser receives its budgeted funds, it will quickly bring payments up to date and return to its usual payment schedule.

In the event a Purchaser consistently fails to meet its commitment, after notification to the OSD Contract Manager and SOPS, the Prime Vendor may move that Purchaser to the markup % for the payment schedule actually being met.

State Law prohibits the Commonwealth from making payments for Goods or Services it has not yet received. Therefore, we cannot take advantage of any lower percentage markups the Bidder might be able to offer for common in the industry pre-paying.

3.4.2 Tiered discounts – generic drugs

The awarded Contractor is expected to offer tiered discounts in addition to the negative markup for purchase of different percentages of a Purchaser’s generic drug needs from the Contractors own generic product line.

3.4.3 Process HDAP Reimbursements for SOPS

The awarded Contractor must at no charge receive checks from the Massachusetts Department of Public Health’s HIV Drug Assistance Program that is administered by the Community Research Initiative on behalf of SOPS facilities eligible for these funds, and issue a credit to SOPS to be used by the PDC to purchase drugs from the Prime Vendor.

3.4.4 Statewide Contract Administration Fee

This Statewide Contract is subject to a 1% Contract Administration Fee, which is created pursuant to MGL c. 7, § 3B, 801 CMR 4.02. For information on the Statewide Contract Administration Fee, please see the “Statewide Contract Administration Fee and Report” section in the “Requirements for Doing Business After a Contract Has Been Awarded” section below.

3.4.5 Use of PGPO Contract Pricing

The PGPO contract price in many cases establishes the Acquisition Price of a drug used in a pricing formula to determine what the Commonwealth pays a Pharmaceutical Prime Vendor. The Commonwealth pays the Acquisition Price minus the Prime Vendor’s discount percentage (also called a negative markup) (see Glossary).

The PGPO will notify the Prime Vendor in a timely manner about its contracts and changes to contracts so the contracts can be loaded and maintained in the Prime Vendors ordering system. The PGPO will assist the Prime Vendor in receiving notifications of eligible Purchasing Entities so the Prime Vendor can link the account of the eligible Purchasing Entities to the PGPO contract. The PGPO and Prime Vendor must collaborate to make sure the account data in their systems match.

It is the responsibility of the PGPO to notify all its manufacturers of Eligible Purchasing Entities that procure pharmaceuticals in order that the Prime Vendors charge backs be honored by the manufacturer.

The Commonwealth’s PGPO will not charge the Prime Vendor any type of fee or charge for use of the PGPO’s contracts for purchases made through this Contract.

3.4.6 Prime Vendor Sales Reports to PGPO

The Prime Vendor will be required to report monthly all contract sales resulting from the Pharmaceutical Prime Vending Contract to the PGPO including those sales that didn’t derive from use the PGPO’s contracts.

The PGPO using this sales data prepares a series of reports for the Commonwealth: Price Discrepancy Report, OSD Contract Managers Monthly Sales Report, and Better Buying Report. In addition the PGPO seeks rebate dollars from the manufacturers on behalf of the Commonwealth.

The PGPO uses its expertise in monitoring Net Prices being charged and identifies opportunities for better buying for the Commonwealth.

3.4.7 Shipping FOB Destination

All deliveries containing prescription drugs must be made directly to the Pharmacy. The Prime Vendor will be required to deliver orders of Two Hundred Fifty (250) dollars or more free of delivery charge. For orders under $250, the Prime Vendor may access a delivery charge up to $50 providing the Prime Vendor has contacted the Purchaser and received approval for the delivery charge before shipping the order.

3.5 Supplier Diversity Program (SDP) Plan

Massachusetts Executive Order 524 established the Supplier Diversity Program within the Supplier Diversity Office of the Operational Services Division in order to promote the award of State Contracts in a manner that develops and strengthens Minority and/or Women Business Enterprises (M/WBEs). More recently, Executive Order No. 546 established the Service-Disabled Veteran Owned Business Enterprise Program (“SDVOBE Program”), which is designed to promote access and equity of opportunity to Commonwealth business opportunities to SDVOBE qualifying businesses. As a result, M/WBEs and SDVOBEs are strongly encouraged to submit Quotes in response to this Bid, either as prime vendors, joint venture partners or subcontractors. All Bidders, regardless of their certification status, are required to submit a completed SDP Plan Form #1 – SDP Plan Commitment as part of their Quote for evaluation. It is required that Supplier Diversity Program participation accounts for no less than 10% of the total points in the evaluation.

The SSST requires Bidders to make a significant commitment to partner with certified Minority-, Women-, and Service-Disabled Veteran-Owned Businesses in order to be awarded a Contract. Bidders must identify a commitment in the form of a specific percentage of sales made under the resulting contract that will be spent with a Certified Partner(s), using SDP Plan Form #1 – SDP Plan Commitment. This percentage commitment will extend for the life of any resulting contract. Please note that no Bidder will be awarded a Contract unless and until they submit a completed SDP Plan Form #1.

After contract execution, if any, Contractors must submit a completed SDP Plan Form #2 – Declaration of SDP Partners, identifying a Certified Partner(s) no later than 30 days after contract execution. Failure to submit a completed SDP Plan Form #2 by the deadline may result in penalties including contract suspension, termination, and/or award to the next apparent successful bidder.

An SDO-certified (formerly SOMWBA-certified) Bidder may not list itself or an affiliate as being a Supplier Diversity Partner to its own company.

Once an SDP Plan is submitted, negotiated and approved, the SSST will then monitor the Contractor’s performance.

Resources available to assist Prime Bidders in finding potential Minority Business Enterprises (MBE) and Women Business Enterprises (WBE) partners can be found at: Supplier Diversity Plan

Resources available to assist Prime Bidders in finding potential Service-Disabled Veteran-Owned Business Enterprise (SDVOBE) partners can be found: on the SDO webpage www.mass.gov/sdo or the Veterans Affairs webpage https://www.vip.vetbiz.gov/ (search only for SDVOSB).

The Supplier Diversity Program offers training on the SDP Plan requirements. The dates of upcoming trainings can be found at: http://www.mass.gov/anf/budget-taxes-and-procurement/procurement-info-and-res/osd-events-and-training/osd-training-and-outreach.html In addition, the SDP Webinar can be located on the SDP website at www.mass.gov/SDP.

The Bidder(s) awarded contracts pursuant to this RFR must provide Quarterly reports of all their purchases from their Supplier Diversity Partner(s) made under this contract using the form posted with this bid. This is in addition to the 1% Administration Fee Report. The Contract Manager and SSST may request the Contractor to provide special customized reports during other times than the Quarterly due date.

3.5.1 Supplier Diversity Program Subcontracting Policies

In addition to the Subcontracting Policies (See Subcontracting Policies section below and see Section 9, Subcontracting By Contractor, in the Commonwealth Terms and Conditions) that apply to all subcontracted services, agencies may define specific required deliverables for a contractor’s SDP Plan, including, but not limited to, documentation necessary to verify subcontractor commitments and expenditures with Minority- or Women-Owned Business Enterprises (M/WBEs) and Service-Disabled Veteran-Owned Business Enterprises (SDVOBE) for the purpose of monitoring and enforcing commitments made in a contractor’s Supplier Diversity Program (SDP) Plan.

3.6 Participation in the OSD’s Annual Marketing Event, MASSbuys

OSD hosts an annual marketing and training trade show, usually in late April or early May, to educate public purchasers and contract end-users on the commodities and services available on statewide contracts, highlight innovative environmentally preferable (green) products and provide marketing and networking opportunities to the business community. The event, recently renamed MASSbuys, represents the blending of two highly successful long running OSD trade shows, the Statewide Training And Resource (STAR) Exposition and the Environmentally Preferable Products (EPP) Vendor Fair and Conference.

The attendees at these events have included public purchasers and contract end users representing all Commonwealth agencies, cities and towns across the state, independent authorities, higher education and eligible not for profit human and social service organizations. The venue for MASSbuys has significant marketing value and is extremely cost effective as it provides exceptional opportunities for statewide contractors to market directly to thousands of attendees.

The MASSbuys Exposition is scheduled each year at either the Boston Convention & Exhibition Center (BCEC) or the DCU Center in Worcester and is 100% supported by statewide contractors as exhibitors. The cost to exhibit is approximately $1100. OSD believes that the show is important because it provides public purchasers and end users with an opportunity to meet over 300 statewide contractors and receive important information on new products, particularly those that save energy, conserve water or other resources, reduce waste as well as the use of toxic substances and may also contain recycled materials. It provides statewide contractors with the unparalleled opportunity to establish and renew business relationships with existing customers and to market their business to approximately 2,000 attendees, many of whom represent potential new customers.

Please note that exhibiting at the MASSbuys Exposition is not required and no points will be awarded to those Bidders who commit to participate. However, Bidders who indicate their willingness to exhibit at MASSbuys in their Quotes will be required to honor their commitment for the duration of their contract, if awarded a contract.

3.7 Requirements for Doing Business after a Contract Has Been Awarded

The requirements below are specific to the Statewide Contract, if any, awarded as a result of this Bid. Awarded Bidders (Contractors) must also comply with the requirements stated in Terms and Requirements Pertaining to Awarded Statewide Contracts.

3.7.1 Statewide Contract Administration Fee and Report

This Statewide Contract is subject to a 1% Contract Administration Fee, which is created pursuant to MGL c. 7, § 3B, 801 CMR 4.02 and the Transaction Fee section in this Bid and/or incorporated by reference into Statewide Contracts with the Operational Services Division (OSD). The price stated in any Bidder’s Quote price and any Contractor’s Statewide Contract shall be inclusive of this fee and Contractors shall not reflect this fee as a separate line item on customer invoices.

This fee will be based on 1% of the total dollar amounts, adjusted for credits or refunds, paid by Eligible Entities to the Statewide Contractor based on your statewide contract. All ”Statewide Contracts” awarded and all purchase orders and purchases made pursuant to this RFR are subject to this fee regardless of whether the contract was awarded for statewide or regional coverage. Eligible Entities include, but are not limited to: a) Cities, towns, districts, counties and other political subdivisions; b) Executive, Legislative and Judicial Branches, including all departments and elected offices therein; c) Independent public authorities, commissions, and quasi-public agencies; d) Local public libraries, public school districts, and charter schools; e) Public hospitals owned by the Commonwealth; f) Public institutions of higher education; g) Public purchasing cooperatives; h) Non-profit, UFR-certified organizations that are doing business with the Commonwealth; i) Other states and territories with no prior approval by the State Purchasing Agent required; and j) Other entities when designated in writing by the State Purchasing Agent. For a list of other entities that are eligible to use your specific Statewide Contract see Section 1 of this RFR.

Note that if the 1% Administration Fee is deductible as a business expense for federal income tax purposes, it is also deductible as an expense for Massachusetts tax purposes.

Quarterly Fee Payment:

For each Payment Period, Statewide Contractor shall pay to OSD a fee equal to one percent (1%) of the total payments (adjusted for credits or refunds) received from all Eligible Entities that have purchased from the Statewide Contractor pursuant to this Agreement. All payments will be based on full calendar quarters (Payment Periods) and must be received by OSD on or before 45 days after the last day of the Payment Period (as specified below) or a Contractor will be considered in breach of contract:

Quarterly payments will include any periods less than a full calendar quarter if a contract does not start at the first day of a quarter or end on the last day of the quarter.

Payments are to be made through a web-based secure payment center, which can be accessed through a link provided to Statewide Contractors by OSD. All Administration Fee payments are to be made directly through the secure payment center. The secure payment center allows payments to be made via Automatic Clearing House (ACH) or by using one of the following credit cards: American Express, Discover, MasterCard and/or Visa.

Please note that there is no charge to vendors to use ACH as OSD covers the nominal fee charged by the secure payment center for using the ACH payment method. OSD will NOT cover the convenience fee for selecting to pay by credit card. This is a fee the contractor is responsible for paying and is non-refundable; the fee is over and above the 1% Administration Fee and it is calculated at 2.49% of the 1% Administration Fee to be paid. Prior to the due date for the Statewide Contractor’s Administration Fee payment, the Statewide Contractor will receive an e-mail communication from OSD that includes all required information the Statewide Contractor must use to submit payments via the secure payment center. Electronically submitting your payment, which is comprised of the 1% administration fee of the total payments received by the Contractor from all Eligible Entities for the Quarter, will serve as the Statewide Contractor Administration Fee Report. If the total Administration Fees due for the Payment and Reporting Period are less than $50, a Statewide Contractor may carry over that balance to the next Payment and Reporting Period until the cumulative amount owed is $50 or greater (see Quarterly Reporting below for instructions).

Quarterly Reporting:

Contractor shall submit one Statewide Contractor Administration Fee Report for each Statewide Contract for each Payment Period. If an amount greater than $50 is due for the Payment Period, then the electronic submission of the payment shall serve as submission of the Statewide Contractor Administration Fee Report, as referenced in the Quarterly Fee Payment section above. However, if the total Statewide Contractor Administration Fee due is between $0 and $50, then the Contractor must submit one Statewide Contractor Administration Fee Report for each Statewide Contract for each Payment Period. If you are submitting this report, it must be completely filled out, signed by the Statewide Contractor via electronic signature under the pains and penalties of perjury and emailed to osdfeeadministrator@massmail.state.ma.us.

Audit:

During the term of this Agreement and for a period of six years thereafter, the Operational Services Division, its auditors, the Office of the Inspector General or other authorized representatives shall be afforded access at reasonable times to Contractor's accounting records, including sales information on any system, reports or files, in order to audit all records relating to goods sold or services performed pursuant to this Agreement. If such an audit indicates that Contractor has materially underpaid OSD, then the Contractor shall remit the underpayment and be responsible for payment of any costs associated with the audit.

Other Terms:

Contractors are responsible for compliance with all other contract reporting requirements including, but not limited to, contract detailed spend, Supplier Diversity Program (SDP) and other contract reports, as required by this contract.

All amounts payable by the Contractor to OSD under this Agreement that are not received by the due date specified shall bear simple interest from the date due until paid. The Late Payment Interest Rate is set by the Office of the State Comptroller on an annual basis and can be found by selecting the fiscal year in question on the Comptroller’s Fiscal Year Updates webpage.

In the event of the Contractor’s breach of this policy including, but not limited to, non-reporting, non-payment, late reporting/payment, under-reporting/payment, the Commonwealth reserves the right to pursue any and all recourse and penalties available including, but not limited to, contract suspension and contract termination. The Commonwealth is allowed to suspend, terminate or debar pursuant to Massachusetts General Laws Chapter 29, Section 29F, as amended, and pursuant to Section 4 of the Commonwealth Terms and Conditions. In addition, in the event the Contractor fails to make any payment when due, the Contractor shall be liable to the Commonwealth for all expenses, court costs, and attorneys' fees (including inside counsel) incurred in enforcing the terms and conditions of this Agreement.

3.7.2 Additional Report…