Supplier Contact and Negotiation
Supplier Contact and Negotiation
Policy #: ADM-15
The purpose of this policy is to ensure that negotiations for purchase of goods or services on behalf of Beth Israel Deaconess Medical Center (BIDMC) are led by duly authorized administrators and involve users and medical staff in efficient and appropriate ways. This policy relates to non-salary goods and service expenses (including capital expenses) only and does not pertain to revenue or payor negotiations.
All negotiations for goods or services entered into on behalf of BIDMC must be executed in accordance with this policy. All contract negotiations are to be conducted only by duly authorized Medical Center staff.
Authority to negotiate. Only employees and Medical Staff authorized to sign and execute contracts in accordance with BIDMC's ADM-14 Signature Authorization Policy or their designees are authorized to enter into formal negotiations. Designees may include employees and Medical Staff.
General Guidelines. BIDMC employees and Medical Staff are required to inform and seek the guidance and counsel of management to determine the appropriate methodology, approach and review process for supplier (vendor) contacts and/or negotiation. All employees and Medical Staff involved in supplier contacts and negotiations are required to act in the best interests of BIDMC when conducting business with and/or negotiating with vendors and potential vendors. All employees and Medical Staff are required to conduct BIDMC business in a responsible and ethical manner. See BIDMC Compliance Program Policy Manual for more information and guidelines.
Business Discussions with Suppliers. BIDMC recognizes that the input and involvement of stakeholders, including clinicians and practitioners, contribute to a successful business engagement. However, these individuals may be unaware of advantageous or standard contract terms used by BIDMC, as well as the checks and balances that are a meaningful part of due process and objective, third party review used by BIDMC. BIDMC employees and Medical Staff are advised that business discussions with current or potential suppliers whether formal or informal, can easily precipitate serious financial obligations for BIDMC. Thus, all employees and Medical Staff are required to refer all business discussions with respect to pricing, contract terms, expressed or implicit commitments for delivery and installation, as well as solicited and unsolicited proposals, to the BIDMC Contracting Department for review and disposition as soon as discussion of such business terms arise or should be broached.
Contracting Department. The BIDMC Contracting Department is authorized to negotiate contracts for non-salary goods and services within limits established by this policy and BIDMC's ADM-14 Signature Authorization Policy. All BIDMC employees and Medical Staff are expected to utilize the resources of the Contracting Department in developing, negotiating and managing supplier relationships.
Negotiation of contracts. Individuals negotiating on behalf of BIDMC are expected to have knowledge of all contractual provisions and will be held accountable for the negotiating process and outcome.
Conflict of Interest. As stated in the CareGroup, Inc. and Affiliate Entities Corporate Conflict of Interest Policy dated 2002,
"Individuals may have or develop personal interests which create a conflict between those personal interests and the interest of CareGroup or one of the Affiliates, or which could be perceived as creating such a conflict…" and further, "Such perceived or actual conflicts can best be addressed through full disclosure and review by appropriate individuals, together with a process for the approval of business decisions and transactions by non-interested decision makers."
BIDMC employees and Medical Staff involved in vendor contact or negotiation, as well as suppliers entering into contracts, are required to fully disclose personal interests and relationships with suppliers as follows:
Employees and Medical Staff. Beth Israel Deaconess Medical Center employees and Medical Staff are required to fully disclose equity positions, consulting, design or other remuneration relationships they may have with suppliers when the supplier and the individual engage in business discussions and/or negotiations. Disclosure must be made in writing to the individual's manager and to the contracting staff involved. The manager has the responsibility to review the matter with the individual, to seek other counsel as provided by the Medical Center and if deemed necessary, to refer the material to the Office of Business Conduct or the Office of General Counsel for further review. All BIDMC employees and Medical Staff must remove him/herself from discussions and/or negotiations with suppliers when the individual is in any position to materially benefit (as defined in the CareGroup, Inc. and Affiliate Entities Corporate Conflict of Interest Policy dated 2002) from BIDMC business that may be awarded to a supplier. Failure to do so may result in termination of employment or withdrawal of medical staff privileges.
Suppliers. It is the policy of BIDMC that during discussions and negotiations, suppliers are required to identify BIDMC employees and Medical Staff who are participating in the discussions and/or negotiations and who also have equity positions, consulting or other remuneration relationships with the supplier. Contracting staff, who act as the Medical Center's delegates during negotiations, are required to request this disclosure. A supplier's failure to disclose in accordance with this policy may result in disqualification of the supplier during discussions and/or negotiations, and following the execution of any contract and for the contract term, will be considered a breach of contract and possible cause for termination.
7. Solicitation of Business Proposals, Price Agreements and Contracts. Third party representatives (sales representatives, account managers and others) may construe meetings or discussions regarding business opportunities as a precursor to or the execution of a business obligation that obligates BIDMC. BIDMC employees and Medical Staff involved with current or potential suppliers must therefore use discretion in the solicitation of business proposals, price agreements, contracts and/or other offerings to conduct business with BIDMC. Contracts, price agreements, proposals and other supply or service offerings are only valid when executed by a duly authorized BIDMC employee as outlined in the Signature Authorization Policy.
8. Solicitation of free goods or other financial support. The acceptance and utilization of free goods and/or other financial support can expose BIDMC to a variety of risks including Medicare/Medicaid Fraud and Abuse, financial obligation, accusations and/or perceptions of inducement, deterioration of BIDMC's ethical standing and a loss of competitive advantage. Individuals involved in ongoing business and/or negotiations with suppliers, business partners or potential suppliers are strongly cautioned with respect to the solicitation of evaluation products, free goods or other financial support and are required to comply with the following:
8.1.1. Consumable goods used for evaluation purposes must be provided free of charge (with all applicable freight costs absorbed by the supplier), approved by the Director of Contracting and covered by a no-cost purchase order issued through BIDMC's Purchasing Department. Consumable goods brought in under these circumstances must be sequestered from regularly distributed goods and the quantity received should be for a defined term, limited evaluation period.
8.1.2. Capital Equipment brought into BIDMC for evaluation purposes must be covered by a no-charge purchase order, free of freight or any other handling, installation or service charges, for a clearly stated period, and should not be used beyond that period, or for purposes outside of the evaluation's scope. All no-charge purchase orders must be approved by the Director of Contracting. Any no-charge equipment Purchase Orders that will or may lead to increased consumable supply expenditures must also be approved by the respective Vice President whose cost center will be affected.
8.1.3. Software and computer hardware brought into BIDMC for evaluation purposes must be for a limited license period and must be approved in advance by the BIDMC/CareGroup IS department.
8.1.4. Services arranged on a trial basis must be for a limited time period, with a defined scope of work and clearly stated outcome. No exit costs may be included.
8.1.5. Approval -- All requests for evaluation products must be reviewed by BIDMC's Director of Contracting to assess potential financial and/or other obligations. If warranted, the Director of Contracting will advise with respect to any other necessary approvals or reviews prior to evaluation.
8.2. Promotional Products and Other Financial Support
8.2.1. Promotional Products from vendors/supplies may not be used in the course of business, distributed to employees or staff, or accepted as gifts unless allowed by the BIDMC Compliance Program Policy.
8.2.2. Financial Support in the form of honorariums, program funding or any transfer of funds must be structured in the context of a specific event or use. . Any transfer of funds of this nature must reflect a clear and audit-worthy paper trail. If such financial support from a vendor is in any way related to a proposed or actual purchase and/or contract, that support must (a) reviewed by the Director of Contracting who may request review from the Office of Business Conduct as well (b) be directed financially to BIDMC, unless otherwise approved by the President/CEO of BIDMC, and (c) must not compromise the integrity of the competitive contracting process.
8.2.3. In general, promotional products or requests for funding should only be solicited for use in a philanthropic, hospital-wide or other public, charitable event. All solicitations should be directed to a supplier's marketing, advertising or public affairs department by BIDMC's Development Department. Such support should never be solicited from suppliers involved in active or pending negotiations.
General Assistance and Guidance.
BIDMC employees and Medical Staff are urged to seek the assistance and guidance of senior management, as well as the BIDMC Contracting Department. These individuals are prepared to advise and counsel employees and Medical Staff so that the best interests of BIDMC are served.