1. Introduction and General Instructions.doc

Minnesota Multistate Contracting Alliance for Pharmacy(MMCAP)

State of MinnesotaDepartment of Administration

REQUEST FOR PROPOSALFOR

PHARMACEUTICAL PRODUCT PRIME VENDOR DISTRIBUTION SERVICES

For all questions about this RFP contact:Almena Dees, Procurement & Contract Officer

[email protected]

RELEASED:

December 1, 2008

DUE DATE:

Monday, December 22, 2008 at 2:00 P.M. Central Time

1

Table of Contents1. Introduction and General Instructions...........................................................................................................................5

1.1 Purpose of Procurement..........................................................................................................................................51.2 Background.............................................................................................................................................................51.3 Definitions...............................................................................................................................................................51.4 Procurement Process Overview and Timeline........................................................................................................61.5 Procurement Timeline of Events.............................................................................................................................61.6 Questions.................................................................................................................................................................7

2. Submission Guidelines.................................................................................................................................................82.1 Submittal Instructions.............................................................................................................................................82.2 Proposal Checklist...................................................................................................................................................82.3 Proposal Due Date and Time...................................................................................................................................82.4 Number of Copies and Submission Requirements..................................................................................................8

3. Proposal Rejection, Addenda and Oral Communication..............................................................................................93.1 Rejection of Proposals.............................................................................................................................................9

4. Evaluation.....................................................................................................................................................................94.1 Evaluation Review Process.....................................................................................................................................94.2 Proposal Evaluation Criteria................................................................................................................................11

5. General RFP and Proposal Terms...............................................................................................................................126. Supporting Data...........................................................................................................................................................157. Statement of Work – Prime Vendor Requirements.....................................................................................................16

7.1 Mandatory Requirements......................................................................................................................................167.2 Definition of Terms...............................................................................................................................................187.3 Service Area..........................................................................................................................................................207.4 Customer Service..................................................................................................................................................21

A. Customer Service to MMCAP Office................................................................................................................21B. Customer Service to MMCAP Participating Facility.........................................................................................22

7.5 New Accounts.......................................................................................................................................................237.6 Inventory Management..........................................................................................................................................24

A. MMCAP-Contracted Vendors...........................................................................................................................24B. Vendor’s Business Requirements....................................................................................................................27C. MMCAP Contract Products............................................................................................................................27D. Stock Outs.......................................................................................................................................................28E. Manufacturer Backorders....................................................................................................................................28F. Service Level Calculations..................................................................................................................................28

7.7 Management of MMCAP Contract Products........................................................................................................29A. Price Loading..................................................................................................................................................30B. Product Additions/Deletions..............................................................................................................................30C. Convenience Contracts.......................................................................................................................................31

7.8 Ordering Equipment..............................................................................................................................................31A. Ordering System..............................................................................................................................................31B. Hardware, Software, and Devices.....................................................................................................................31C. Installation.........................................................................................................................................................31D. Training...........................................................................................................................................................31E. Ordering System(s) Back-up Service, Maintenance and Repair.......................................................................32F. Label and Marking.............................................................................................................................................32

7.9 Order Placement....................................................................................................................................................327.10 Delivery...............................................................................................................................................................35

A. Routine Delivery.............................................................................................................................................35B. Drop Ship........................................................................................................................................................36C. Delivery for Special Products............................................................................................................................36

2

D. Pedigree..............................................................................................................................................................37E. Delivery of Bulky Items......................................................................................................................................39

7.11 Inventory at an MMCAP Participating Facility..................................................................................................397.12 Contract Compliance...........................................................................................................................................397.13 Invoicing..............................................................................................................................................................41

A. Order Invoice......................................................................................................................................................41B. Invoice Rounding................................................................................................................................................42C. Cash Discount.....................................................................................................................................................42D. Credits................................................................................................................................................................43E. Rebills.................................................................................................................................................................44F. Chargeback Denials............................................................................................................................................44G. 810 EDI Invoices and Auditing..........................................................................................................................45H. Goods Returned to the PPV................................................................................................................................45I. Reverse Distribution Processor (currently Guaranteed Returns).........................................................................45J. Recalls..................................................................................................................................................................46

7.14 Payment..............................................................................................................................................................467.15 Emergency Order, Placement and Delivery........................................................................................................467.16 Other Value Added Services...............................................................................................................................46

A. MMCAP Participating Facility Negotiated Contracts.....................................................................................46B. Value Added Services.....................................................................................................................................47C. Vendor’s Generic Drug Program....................................................................................................................47

7.17. Mandatory Reports.............................................................................................................................................48A. Sales Data Report............................................................................................................................................48B. Monthly Payment Report...................................................................................................................................51C. Kill/Fill Report..................................................................................................................................................53D. Contract Change Report...................................................................................................................................54E. Contract Audit Report.......................................................................................................................................54F. Off-contract with Alternative On-contract Report............................................................................................54G. Raw and Adjusted Fill Rate Report..................................................................................................................55H. Vendor Member Listing....................................................................................................................................55I. Manufacturer Backorders...................................................................................................................................56J. Vendor Reports Available to MMCAP Participating Member Facilities..........................................................56

7.18 Implementation Period........................................................................................................................................567.19 Business Interruption Plan...................................................................................................................................577.20 Fees......................................................................................................................................................................57

8. Check List of Required Documents Making Up the Complete Proposal....................................................................599. Responder’s Experience..............................................................................................................................................60

9.1 Responder’s Experience........................................................................................................................................609.2 Responder’s References........................................................................................................................................609.3 Terminations or Contract Cancellations................................................................................................................609.4 References.............................................................................................................................................................609.5 Business Litigation................................................................................................................................................619.6 Financial Statements..............................................................................................................................................61

10. Contract Provisions...................................................................................................................................................6210.1 Exceptions to Contract Terms and Conditions....................................................................................................6210.2 Contract Terms and Conditions...........................................................................................................................63

11. Certification Regarding Lobbying.............................................................................................................................7312. Affidavit of Noncollusion.........................................................................................................................................7413. Affirmative Action Certification...............................................................................................................................7514. Location of Service and Disclosure Certification.....................................................................................................7715. Immigration Status Certification...............................................................................................................................7816. Taxpayer Identification.............................................................................................................................................79

3

17. Preference to Targeted Group & Economically Disadvantaged Businesses & Individuals......................................8018. Conflicts of Interest Disclosure & Acknowledgment...............................................................................................81

4

1. Introduction and General Instructions

1.1 Purpose of Procurement

The State of Minnesota, Department of Administration on behalf of the Minnesota Multistate Contracting Alliance for Pharmacy (State or MMCAP) is issuing this Request for Proposal (RFP) to establish an MMCAP contract with qualified prime vendors who will provide pharmaceutical distribution services to MMCAP Participating Facilities. Specifically, the selected vendor(s) will distribute all pharmaceutical, OTC, nutritional, and vaccines (other than influenza vaccines).

This RFP shall not be construed to obligate or limit MMCAP’s right to award one or more contracts, to reject all proposals, cancel the solicitation or to negotiate with more than one Responder if it is considered to be in its best interest. MMCAP reserves the right to accept or reject any or all responses or parts of responses and to waive informalities therein.

1.2 BackgroundMMCAP is a voluntary group purchasing organization made up of governmental entities which contracts for pharmaceutical products and services. MMCAP’s membership is currently made up of 45 participating states plus the Cities of Chicago and Los Angeles (MMCAP Member) with approximately 2,000 facilities actively participating in the pharmaceutical distribution contracts (MMCAP Participating Facilities). These members purchase approximately $1.2 billion per year in pharmaceuticals.

Current MMCAP Members

Alabama Alaska Arizona Arkansas Colorado

Delaware Florida Georgia Hawaii IdahoIndiana Iowa Kansas Kentucky LouisianaMaine Maryland Michigan Minnesota MississippiMissouri Montana Nebraska Nevada New HampshireNew Mexico New York North Carolina North Dakota OhioOklahoma Oregon Pennsylvania Rhode Island South CarolinaSouth Dakota Tennessee Utah Vermont VirginiaWashington West Virginia Wisconsin Wyoming City of Chicago

City of Los Angeles

MMCAP reserves the right to add and delete other Members during the life of the contracts. California does not currently participate in the PPV program.

Participation in MMCAP is limited to facilities with statutory authority to purchase goods and services from their home state’s contracts. Types of facilities include, but are not limited to: city, county, and state-operated facilities; such as correctional facilities, regional psychiatric treatment facilities, student health services, public health services, veterans’ nursing homes, and public hospitals.

1.3 Definitions

Throughout this RFP, the following terms are used as defined.

“MMCAP Member” – Any of the 45 member states plus the Cities of Chicago and Los Angeles and any other members added or deleted during the life of the contracts.

“MMCAP Participating Facility” - Any facility listed by the MMCAP Office as an active participant of MMCAP program. A current listing of MMCAP Facilities is provided to all MMCAP vendors monthly.

“MMCAP Office” - The administrative staff of the MMCAP Program responsible for initiating and administering all

5

MMCAP contracts. Located at:

MMCAPMinnesota Department of AdministrationMaterials Management Division112 Administration Building 50 Sherburne AvenueSt. Paul, MN 55155

“Pharmaceutical Prime Vendor (PPV)” – The RFP Responder that is interested in providing pharmaceutical distribution services to MMCAP Members as further described in this RFP.

1.4 Procurement Process Overview and TimelineA. RFP Issued. Every five years, the MMCAP Office issues an RFP for pharmaceutical prime vendor services to provide access to the contracted pharmaceuticals (described below).

This RFP is made up of three sections:

a. RFP Instructions and Supporting Data

b. Scope of Work – Prime Vendor Requirements

c. Required Documents Making up a Complete Proposal

Biennially, the MMCAP Office solicits contracts directly with pharmaceutical manufacturers for their products. The MMCAP Office has two year contracts with generic pharmaceutical manufacturers and four year contracts with branded pharmaceutical manufacturers; therefore there is a contract roll every two years. (Contracted Pharmaceutical Prime Vendors (PPVs) do not participate in the product solicitation or selection process.) Contracted PPVs then deliver the contracted products to MMCAP Participating Facilities. The contracted PPVs must maintain an adequate supply of and distribute all MMCAP-contracted products.

B. MMCAP Proposal Evaluation and Short List. Once the MMCAP Office receives proposals from the PPV RFP, an initial compliance screening is performed by the Procurement and Contracts Officer. Proposals that do not meet the submission requirements as set forth in Section 4.1 Evaluation: Phase I are subject to rejection without further evaluation. Next an evaluation panel, made up of representatives from MMCAP Members, evaluate the pre-screened proposals and creates a short list of qualified vendors. The short list is anticipated to be no more than five PPVs.

C. MMCAP Member PPV Interviews. Designated contacts within each MMCAP Member create an internal evaluation process to decide which short listed PPVs to interview. Being on the short list does not guarantee an interview by any MMCAP Member. The PPVs must not initiate contact with the MMCAP Members or MMCAP Participating Facilities for meetings and failure to comply may result in the PPVs disqualification and removal from the short list. MMCAP Members will notify selected PPVs of the time and location for these activities, and may supply agendas or topics for discussion. The MMCAP Office and/or MMCAP Members reserve the right to ask additional questions during oral presentations, site visits, and or demonstrations to clarify the scope and content of the written proposal. The PPV’s oral presentation, site visit, and/or demonstration must substantially represent material included in the written proposal, and should not introduce new concepts or offers unless specifically requested by the MMCAP Participating Facility.

D. MMCAP Member PPV Selection. Each individual MMCAP Member makes a determination of which short listed PPV will provide service to its MMCAP Participating Facilities. In other words, each member state selects one vendor to provide services to ALL of the participating facilities within that state. The MMCAP Member then notifies the MMCAP Office of its final selection.

E. MMCAP Contract Negotiations. Upon written notification of a selected PPV by the individual MMCAP Member, the MMCAP Office will begin contract negotiations.

F. Transition. The contracted PPVs begin transition processes with new MMCAP Participating Facilities immediately upon contract execution.

1.5 Procurement Timeline of Events

The timeline set out herein represents the MMCAP Office’s best estimate of the schedule that will be followed. However, delays to the procurement process may occur which may necessitate adjustments to the proposed schedule. If a component of this timeline, such as the close date, is delayed, the rest of the schedule may be shifted as appropriate. Any changes to the

6

dates up to the closing date of the RFP will be sent out as an official, written addendum prior to the closing date of this RFP. After the close of the RFP, the MMCAP Office reserves the right to adjust the remainder of the proposed dates, including the dates for evaluation, negotiations, contract award and the contract term on an as needed basis with or without notice.

PROCUREMENT TIMELINE OF EVENTS

Description Date Time

Release of RFP 12/1/2008 N/A

Deadline for Written Questions

12/12/08 2:00 p.m. Central Time

Responses to Written Questions Posted


Proposal Due Date 12/22/08 3:00 p.m. Central Time

Shortlist Notification to Prime Vendors and MMCAP Members


Short Listed Distributor Presentations to MMCAP Members

1/21/09 - 4/3/09 5:00 p.m. Central Time

Notice of Intent to Award Based on MMCAP Member Selections

No later than 4/10/09

5:00 p.m. Central Time

Contract Execution and Transition Period

No later than 5/1/09

5:00 p.m. Central Time

Contractor Work Begins 7/1/09

Pharmaceutical distribution services to MMCAP Participating Facilities must be implemented and operational by this date. This includes providing all services as outlined in the RFP.

1.6 Questions

All questions regarding this RFP must be submitted in the following format:

Company Name

Question #1, (include the question along with the citation of relevant section of the RFP)

Question #2, (include the question along with the citation of relevant section of the RFP)

Responders must notify the MMCAP Office of any ambiguity, conflict, discrepancy, exclusionary specification, omission or other error in the RFP by the deadline for submitting questions and comments. If a Responder fails to notify the MMCAP Office of these issues, it will submit a proposal at its own risk, and if awarded a contract: (1) shall have waived any claim of error or ambiguity in the RFP or resulting contract, (2) shall not contest the MMCAP Office’s interpretation of such provision(s), and (3) shall not be entitled to additional compensation, release or time by reason of the ambiguity, error, or its later correction.

Questions must be directed in writing via e-mail to:

Almena Dees, Procurement & Contracts Officer

[email protected]

All questions must be received no later than 2 p.m., December 12, 2008.

7

With the exception of current working arrangements for continuity of service, from the issue date of this RFP until the short list of PPVs is announced, Responder(s) must not have any communications regarding this RFP or its contents for any reason with the MMCAP Office, MMCAP Members, MMCAP Participating Facilities, or any staff of the above, except as provided for in this RFP.

The MMCAP Office reserves the right to reject the proposal of any Responder(s) violating this provision. All questions concerning this RFP must be submitted in writing. No response other than written will be binding upon the State.

2. Submission Guidelines

2.1 Submittal Instructions

Preparing a Response: Each Responder interested in competing and winning an award must complete and submit a response to this RFP. The Responder is responsible for ensuring all questions have been answered appropriately and that all necessary documents have been submitted. The entire RFP is located on the MMCAP website. To retrieve a copy of the RFP from the website, go to mmcap.org, click on “Vendors and RFPs.”

2.2 Proposal Checklist

A complete list of all documents making up a complete proposal can be found in the Check List of Required Documents Making Up the Complete Proposal section of this RFP.

2.3 Proposal Due Date and Time

Sealed proposals must be received and time stamped by the Materials Management Division's receptionist no later than 3:00 p.m., Central Time, Monday, December 22, 2008. Fax and e-mail proposals will not be considered. Late proposals will not be considered. All costs incurred in responding to this RFP will be borne by the Responder.

2.4 Number of Copies and Submission Requirements

Submit:

1. One complete original proposal; an authorized representative must sign the original proposal in ink for a proposal to be considered by the MMCAP Office.

2. 16 copies of the complete proposal with the Pricing and Fees excluded.3. Separately sealed package containing 16 copies of the Pricing and Fees:

a. All of the Responder’s RFP pricing and fees information inserted in the Pricing and Fee Matrix Information Worksheet (worksheet can be downloaded from the MMCAP website www.mmcap.org, under "Vendors and RFPs” (http://www.mmd.admin.state.mn.us/perlscript/current_rfps.pl) and the MMD website www.mmd.admin.state.ms.us, click on “Solicitation Announcements,” and “Goods and Services Solicitations” ( http://www.mmd.admin.state.mn.us/process/admin/postings.asp).

b. Labeled as described in the “Label Instructions” below with the addition that the envelope contain the words "Fees/Price Proposal."

3. One (1) electronic copy of the entire proposal (including the pricing and fees proposal) on portable media, such as a compact disk, compatible with Microsoft Office 2003. Any disparities between the contents of the original printed proposal and the electronic proposal will be interpreted in favor of MMCAP.

Label Instructions:

The envelope should be labeled with:

Proposal Title: MMCAP Pharmaceutical Prime Vendor Product Distribution Services RFP

Company Name: __________________

8

http://www.mmd.admin.state.mn.us/process/admin/postings.asp

http://www.mmd.admin.state.mn.us/perlscript/current_rfps.pl

http://www.mmcap.org/

Physical Address for overnight, commercial mail, and hand delivery copies of the proposal to:

MMCAP Pharmaceutical Prime Vendor Product Distribution Services RFP

State of Minnesota, Department of Administration

50 Sherburne Avenue, Suite 112

St. Paul, MN 55155

Response Requirements:

All proposals must be:

• clearly legible;

• sequentially page-numbered and include the Responder’s name at the top of each page;

• organized in the same sequential order as the Statement of Work (“SOW”) section of this RFP, stating the paragraph number, then specification, then the vendor's response.

• bound in a notebook or 3 ring binder;

• correctly identified with the RFP number and submittal deadline;

• responsive to all RFP requirements; and

• Arial or Times New Roman font, size 11 or 12 for normal text, no less than size 10 for tables, graphs and appendices

• proposals may not include materials or pamphlets not specifically requested in this RFP.

3. Proposal Rejection, Addenda and Oral Communication

3.1 Rejection of Proposals

The MMCAP Office reserves the right to reject any or all proposals, to waive any irregularity or informality in a proposal, and to accept or reject any item or combination of items, when to do so would be to the advantage of the MMCAP Program or the State. It is also within the right of the MMCAP Office to reject proposals that do not contain all elements and information requested in the RFP. The MMCAP Office reserves the right to cancel this RFP at any time. The MMCAP Office will not be liable for any cost/losses incurred by the Responder throughout this process.

3.2 Addenda and Oral CommunicationThe MMCAP Office may modify or clarify the RFP by issuing one or more addenda to all parties who have received the RFP. Any such addenda will be posted on the MMCAP website http://www.mmd.admin.state.mn.us/perlscript/current_rfps.pl and/or the MMD website http://www.mmd.admin.state.mn.us/process/admin/postings.asp. Each Responder must follow the directions on the addendum. Addenda will be numbered consecutively in the order they are issued. Each Responder must have the addenda signed and submitted with the response unless otherwise noted in the addendum.

Any oral communication concerning this RFP will neither be binding, nor cause for protesting any language of this procurement, nor in any way excuse the Responder from its obligations.

4. Evaluation

4.1 Evaluation Review ProcessThe MMCAP Office will facilitate the evaluation of all submitted proposals. The evaluation will be completed by a committee of selected representatives from MMCAP Members and MMCAP Participating Facilities.Responders may not communicate with the evaluation committee before or during the evaluation of the proposals, which will begin after the scheduled opening. Failure to comply may mean rejection of the Responder’s proposal.

9



The evaluations will be conducted in six phases:

Phase I - Review and Select Responsive, Compliant Proposals (Pass/Fail). The purpose of this phase is to determine if each proposal responds to the mandatory and administrative requirements of this RFP. Evaluation in this phase will be conducted by the MMCAP Office at the time of bid opening. A pass/fail criteria will be used to check for the presence or absence of required information in conformance with the submission requirements of this RFP.

Phase II - Evaluate Proposals for Service and Technical Requirements and Price (Scored). Only those proposals found to be responsive under Phase I will be considered in Phase II. The evaluation team, made up of MMCAP Members (“Evaluation Team”), will conduct a detailed evaluation of each proposal and create a short list of qualified vendors – not more than five. Notwithstanding the foregoing, the MMCAP Office reserves the right to limit the number of proposals in the competitive range to the greatest number that will permit an efficient competition among the most highly rated proposals. Evaluation of the cost proposals will be conducted independently and separately from evaluation of the service and technical proposals. The cost proposal evaluations will not be conducted until after the technical proposals have been scored. In addition, the Evaluation Team may contact client references provided by the Responder to determine client satisfaction. Responders will be notified in writing when the short list of vendor award(s) has been made.

Again, the MMCAP Office may submit a list of detailed comments, questions, and concerns to one or more Responders. The total scores may be revised as a result of the responses.

Phase III - Interviews. MMCAP Members will interview as many or as few short listed vendors as desired and make a final selection of a PPV to provide service to ALL MMCAP Member Facilities within that Member State. The MMCAP Member notifies the MMCAP Office of its final selection.

Phase IV – MMCAP Negotiates Contracts with Selected PPVs. The MMCAP Office reserves the right to request a BEST AND FINAL OFFER if it is deemed necessary. Responders will be notified of their selection or non-selection in writing.

Phase V - Execute Contracts With Selected PPVs.

Phase VI – Transition period with MMCAP Participating Facilities.

10

4.2 Proposal Evaluation Criteria

The maximum points available are 1000 points. The evaluation is comprised of the following:

Areas Criteria Points/Percent

Cost/Pricing/Fees 1. Cost of products and services proposed 400 points: 40%

Administrative Requirements 2. Administrative Requirements Pass/Fail

Mandatory Requirements 3. Mandatory Requirements Pass/Fail

Service & Technical Requirements 4. Service & Technical Requirements found in the Scope of Work

600 points: 60%

Total 1000 points: 100%

* Targeted Group and Economically Disadvantaged Businesses (TG/ED) submitting proposals as Prime Vendors will receive the equivalent of a 6% preference in the evaluation of their proposals (reference Section 5: General RFP and Proposal Terms for a complete definition of TG/ED)*

Below are brief descriptions of the evaluation scoring criteria:

1. “Cost /Pricing/ Fees” of Services Proposed

Responders’ proposed cost may be scored at the category or subcategory level relative to other proposals. When applicable, the MMCAP Office may utilize lowest cost, lowest total cost or greatest savings to determine the best Responder. The Responder deemed to have the most competitive cost proposal, as determined by the MMCAP Office and the Evaluation Team, will receive the maximum weighted score for the cost criteria. Other proposals will receive a percentage of the weighted score based on the percentage differential between the most competitive cost proposal and the specific proposal in question.All cost proposals will be scored independently from the technical proposals. The MMCAP Office will not disclose the cost proposals or the cost analysis to the Evaluation Team until after the technical proposals have been scored.

The price evaluation will be based on the overall cost to the MMCAP Program after considering possible combinations of individual State/region offers and alternate offers for multiple-State/regions proposals. The MMCAP Office recognizes that accepting a multi-State/region offer may entail some State/regions paying higher or lower prices than accepting individual offers for a State/region. The MMCAP Office will determine the overall best value for the MMCAP Program as a whole for price analysis purposes by considering multi-State/region offers versus individual State/region pricing. The overall best price to the MMCAP Program as a whole will be determined irrespective of whether multi-State/regions or individual region(s) are awarded

2. “Administrative Requirements”

Responders’ proposals will be screened on a pass/fail basis for the following administrative requirements:

1. All required documents listed in the Check List of Required Documents Making Up the Complete Proposal section of the RFP have been submitted.

2. Service and technical statement of work submissions do not include any pricing from the Cost Proposal.

3. All service & technical requirement questions have been answered.

4. All proposals have been submitted by the RFP deadline.

3. “Mandatory Requirements”

Responders’ proposals will be reviewed on a pass/fail basis for all Mandatory Requirements. Only those Responders’ that indicate a “yes” response for all mandatory requirements will receive a passing score.

4. Service and Technical Requirements”

11

The Evaluation Team will evaluate and score the Responder‘s ability to meet or exceed the RFP’s Service and Technical Requirements listed in the Scope of Work (SOW). In addition, the Evaluation Team reserves the right to contact client references provided by the Responder to determine client satisfaction and/or evaluate any other requirements as listed in the Additional Required Documents section of this RFP and score on a pass/fail basis.

5. General RFP and Proposal Terms

This RFP does not commit the State to award any contract or to pay any costs incurred by the vendors responding. The State reserves the right to accept or reject any or all responses or parts of responses and to waive informalities therein.

1. PREPARATION OF RESPONSE

a. Proposal Submission. By submitting a proposal, Responders agree that the proposal or any part thereof, is an irrevocable offer for 120 days following the submission deadline date unless stated otherwise in the RFP. It is understood and agreed that the response or any part thereof, when accepted by the State in writing, may become part of a legal and binding contract between the undersigned Responder and the MMCAP Office.

b. Alterations. Responder must NOT modify the RFP questions, charts, or forms in its proposal. The proposal must strictly follow the RFP order. In the event the MMCAP Office discovers any modifications to the questions, charts, or forms, the proposal may be rejected. In the event a Responder has a question about any part of the RFP, it must submit a request for clarification according to Section 1.6 above.

c. Authorized Signature. The response must be in the legal name of the firm or business and must be fully and properly executed and signed by an officer or other authorized representative who shall state his/her title.

Proof of authority of the person signing the response shall be furnished upon request. If the Responder is a corporation, a secretarial certificate of an excerpt of the corporate minutes showing that the signing officer has authority to contractually obligate the corporation shall be furnished. Where the corporation has designated an attorney-in-fact, the ordinary power of attorney should be furnished. If the Responder is a partnership, a letter of authorization shall be furnished, signed by one of the general partners. If the Responder is a proprietor, and the person signing the response is other than the owner, a letter of authorization signed by the owner shall be furnished.

2. COMPLETION OF RESPONSES. A response may be rejected if it is conditional or incomplete. Responses that contain conflicting, false, or misleading statements or that provide references that contradict or do not support an attribute or condition stated by the Responder, may be rejected.

3. ACTING IN CASES OF DOUBTFUL RESPONSIBILITY. If the MMCAP Manager, on the basis of available evidence, concludes that a particular Responder appears to be insufficiently responsible to ensure adequate performance, the response may be rejected.

4. NONRESPONSIVE RESPONSES. Responses that do not comply with the provisions in the RFP may be considered nonresponsive and may be rejected.

5. ADDENDA TO THE RFP. Any addendum issued will become a part of the RFP and will be posted on the MMCAP website www.mmcap.org, under "Vendors and RFPs” (http://www.mmd.admin.state.mn.us/perlscript/current_rfps.pl) and the MMD website www.mmd.admin.state.ms.us, click on “Solicitation Announcements,” and “Goods and Services Solicitations” ( http://www.mmd.admin.state.mn.us/process/admin/postings.asp).The State may modify or clarify the RFP by issuing one or more addenda to all parties who have received the RFP. Each Responder must follow the directions on the addendum. Addenda will be numbered consecutively in the order they are issued.

6. PROPOSAL WARRANTY. By submission of a proposal, Responder warrants that the information provided is true, correct and reliable for purposes of evaluation for potential contract award. The submission of inaccurate or misleading

12




information may be grounds for disqualification from an award as well as subject the Responder to suspension or debarment proceedings and other remedies available by law.

7. DISPOSITION OF RESPONSES. All materials submitted in response to this RFP will become property of the State and will become public record after the evaluation process is completed and an award decision made. If the Responder submits information in response to this RFP that it believes to be trade secret materials, as defined by the Minnesota Government Data Practices Act, Minnesota Statutes Section 13.37, the Responder must:

a. clearly mark all trade secret materials in its response at the time of the response is submitted,b. include a statement with its response justifying the trade secret designation for each item, andc. defend any action seeking release of the materials it believes to be trade secret, and indemnify and hold harmless

the State, its agents and employees, from any judgments awarded against the State in favor of the party requesting the materials, and any and all costs connected with that defense. This indemnification survives the State’s award of a Contract. In submitting a response to the RFP, the Responder agrees that this indemnification survives as long as the trade secret materials are in possession of the State. The State is required to keep all the basic documents related to its Contracts, including responses to RFPs, for a minimum of seven years.

The State will not consider the prices submitted by the Responder to be trade secret materials.

8. PROPOSAL REPRODUCTION & PUBLICATION WAIVER. The MMCAP Office reserves the right to use, reproduce and publish proposals in any manner necessary for MMCAP Members to access the responses, including but not limited to photocopying, State Intranet/Internet postings, broadcast faxing, and direct mailing. In the event that the response contains copyrighted or trademarked materials, it is the Responder’s responsibility to obtain permission for the MMCAP Office to reproduce and publish the information, regardless of whether the Responder is the manufacturer, service provider, or reseller of the products listed in the materials. By signing its response, the Responder certifies that it has obtained all necessary approvals for the reproduction and/or distribution of the contents of its response and agrees to indemnify, protect, save and hold the MMCAP Office, its representatives and employees harmless from any and all claims arising from the violation of this section and agrees to pay all fees (including but not limited to legal fees) directly and indirectly incurred by the MMCAP Office in the defense of any such action.

9. RIGHTS RESERVED. Notwithstanding anything to the contrary, the State reserves the right to:a. reject any and all responses received;b. select, for contracts or for negotiations, responses other than that with the lowest cost;c. waive or modify any informalities, irregularities, or inconsistencies in the responses received;d. negotiate any aspect of the proposal with any Responder and negotiate with more than one Responder;e. request a BEST and FINAL OFFER, if the State deems it necessary and desirable; and

f. terminate negotiations and select the next response providing the best value for the State, prepare and release a new RFP, or take such other action as the State deems appropriate if negotiations fail to result in a successful Contract.

10. CONFLICT OF TERMS. In the event of any conflict between the general RFP Terms and Conditions and the Statement of Work – Prime Vendor Responsibilities” the “Statement of Work – Prime Vendor

Responsibilities” shall govern.

11. DISPUTE RESOLUTION PROCEDURES. Any issue a Responder has with the RFP document must besubmitted in writing to the MMCAP prior to the proposal due date and time. Any issue a Responder has withthe Contract award must be submitted in writing to MMCAP within five working days from the time the Contractaward is made public. The State will respond to any protest received that follows the above procedure.

12. TG/ED PREFERENCE. In accordance with Minnesota Statutes Section 16C.16, subdivisions 6 and 7, eligible certified targeted group (TG) businesses and certified economically disadvantaged (ED) businesses will receive a six percent preference on the basis of award for this RFP. The preference is applied only to the first $500,000 of the response to the RFP. Eligible TG businesses must be currently certified by the State of Minnesota, Department of Administration’s Materials Management Division prior to the proposal opening date and time.

To verify TG/ED certification, refer to the Materials Management Division’s web site at www.mmd.admin.state.mn.us under “Vendor Information, Directory of Certified TG/ED Vendors.”

13

To verify TG eligibility for preference, refer to the Materials Management Division’s web site under “Vendor Information, Targeted Groups Eligible for Preference in State Purchasing” or call the Division’s Help Line at 651.296.2600.

13. ORGANIZATIONAL CONFLICTS OF INTEREST. The Responder warrants that, to the best of itsknowledge and belief, and except as otherwise disclosed, there are no relevant facts or circumstances which could give rise to organizational conflicts of interest. An organizational conflict of interest exists when, because of existing or planned activities or because of relationships with other persons:

A Responder is unable or potentially unable to render impartial assistance or advice to the State; The Responder ‘s objectivity in performing the work is or might be otherwise impaired; or The Responder has an unfair competitive advantage.

The Responder agrees that if an organizational conflict of interest is discovered after award, an immediate and full disclosure in writing shall be made to the MMCAP Manager that shall include a description of the action the Responder has taken or proposes to take to avoid or mitigate such conflicts. If an organizational conflict of interest is determined to exist, the State may, at its discretion, cancel the Contract. In the event the Responder was aware of an organizational conflict of interest prior to the award of the Contract and did not disclose the conflict to MMCAP, the State may terminate the Contract for default.

14. CERTIFICATION REGARDING DEBARMENT, SUSPENSION, INELIGIBLITY, AND VOLUNTARY EXCLUSION

A. Certification regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion and Lower Tier Covered

Transactions. Instructions for certification:

1. By signing and submitting this RFP proposal, the prospective lower tier participant /Responder is providing the certification set out below.

2. The certification in this clause is a material representation of fact upon which reliance was placed when this transaction was entered into. If it is later determined that the prospective lower tier participant/Responder knowingly rendered an erroneous certification, in addition to other remedies available to the federal government, the department or agency with which this transaction originated may pursue available remedies, including suspension and/or debarment.

3. The prospective lower tier participant/Responder will provide immediate written notice to the person to whom this RFP proposal response is submitted if at any time the prospective lower tier participant/Responder learns that its certification was erroneous when submitted or had become erroneous by reason of changed circumstances.

4. The terms covered transaction, debarred, suspended, ineligible lower tier covered transaction, participant, person, primary covered transaction, principal, proposal, and voluntarily excluded, as used in this clause, have the meaning set out in the Definitions and Coverages section of rules implementing Executive Order 12549. You may contact the MMCAP AMS to which this RFP proposal is submitted for assistance in obtaining a copy of those regulations.

5. The prospective lower tier participant/Responder agrees by submitting this response that, should the proposed covered transaction be entered into, it must not knowingly enter into any lower tier covered transaction subcontract equal to or exceeding $25,000 with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by MMCAP with which this transaction originated.

6. The prospective lower tier participant/Responder further agrees by submitting this RFP proposal that it will include this clause titled, Certification Regarding Debarment, Suspension, Ineligibility, and Voluntary Exclusion Lower Tier Covered Transaction, without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions.(This only applies if you/Responder have been debarred, etc.)

7. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that it is not proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, ineligible, or voluntarily excluded from covered transactions, unless it knows that the certification is erroneous. A participant may

14

decide the method and frequency by which it determines the eligibility of its principals. Each participant may, but is not required to, check the list of parties excluded from federal procurement and non-procurement programs.

8. Nothing contained in the foregoing will be construed to require establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of a participant/Responder is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings.

9. Except for transactions authorized under paragraph 5 of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, suspended, debarred, ineligible, or voluntarily excluded from participation in this transaction, in addition to other remedies available to the Department of Administration/MMCAP with which this transaction originated may pursue available remedies, including suspension and/or debarment.

B. Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion - Lower Tier Covered Transactions.

1. The prospective lower tier participant/Responder certifies, by submission of this proposal, that neither it nor its principals is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency.

2. Where the prospective lower tier participant/Responder is unable to certify to any of the statements in this certification, such prospective participant/Responder must attach an explanation to this RFP proposal.

6. Supporting Data

Estimated Spend and UsageThe following reports are available as supporting data for this RFP. Reports may be downloaded from the website located at: http://www.mmd.admin.state.mn.us/process/admin/postings.asp or http://www.mmd.admin.state.mn.us/perlscript/current_rfps.pl.

MMCAP Pharmaceutical purchases by state and month for state fiscal year 2008 (7/1/07 – 6/30/08) MMCAP Pharmaceutical purchases by facility and month for state fiscal year 2008 (7/1/07 – 6/30/08) MMCAP Pharmaceutical sales by GCN_SEQ number for state fiscal year 2008 (7/1/07 – 6/30/08) MMCAP Pharmaceutical units sold by generic name for state fiscal year 2008 (7/1/07 – 6/30/08) MMCAP Pharmaceutical sales by generic name for state fiscal year 2008 (7/1/07 – 6/30/08) MMCAP membership listing dated 11/05/2008 MMCAP contracted item portfolio as of 11/05/08 MMCAP current contract vendors as of 11/05/08 MMCAP State Contract list 11/05/08

15



7. Statement of Work – Prime Vendor RequirementsInstructions: Responder must NOT modify the RFP questions, charts, or forms in its proposal. The proposal must strictly follow the RFP order. In the event the MMCAP Office discovers any modifications to the questions, charts, or forms, the proposal may be rejected. In the event a Responder has a question about any part of the RFP, it must submit a request for clarification according to Section 1.6 above.

7.1 Mandatory Requirements.

By checking Yes, Vendor acknowledges that it will comply with the following requirements.Reference Number &Search Word

Mandatory Requirements Yes No RFP Section Reference

1 Inventory Management

Vendor must have agreements with all MMCAP- contracted vendors necessary to provide all MMCAP contract products.

SOW 7.6 A.


Vendor will not remove any MMCAP contract products from its database without prior written approval from the MMCAP Office.

SOW 7.7 B.

3 Licenses, Permits, and Registration Requirements

Prior to the start and during the life of the contract, Vendor must have and maintain all necessary licenses, permits and registrations required by state, local and federal agencies. Vendors must make such documentation available upon request.

Sample Contract Section 36

4 Customer Service

At a minimum, Vendor will provide a representative for the MMCAP Office, facility representatives for the MMCAP Participating Facilities, and a Customer Service Department that will serve all MMCAP members.

SOW7.4

5 DEA License/HIN

The Vendor must not require an MMCAP Participating Facility to have a DEA number in order to obtain products unless the facility places orders for controlled substances. MMCAP Participating Facilities will have HIN numbers assigned by the MMCAP Office.


6 New Accounts All new MMCAP accounts must be established and ready to receive deliveries within a maximum of thirty (30) days of receiving all required documentation from the MMCAP Participating Facility.

SOW7.5


Vendor must stock all MMCAP contract products. SOW7.6

8 Product Expiration Dating

At a minimum, expiration dating of all products delivered under this contract must have a minimum shelf life of six (6) months expiration dating remaining upon delivery to the MMCAP Participating Facilities. Shipment of product with expiration dating of less than 6 months requires the prior approval of the MMCAP Participating Facility before release and delivery of the order.


9 810 EDI Invoices

Vendor must have the ability to provide 810 EDI invoices to the MMCAP Office, MMCAP Participating Facilities, and any other entities designated by the MMCAP Office.

SOW 7.13 G.

10 Financial Statements

Vendor must provide financial statements for the three most recent fiscal years.

Required Documents

11 Delivery Vendor must be willing to provide free delivery for all SOW

16

MMCAP Participating Facilities when individual orders net $750 or more.

7.10

12 Audits Vendor must agree that the MMCAP Office and any MMCAP Participating Facility it serves have the right to audit Vendor to determine the validity of invoice pricing. Audits may be conducted by representatives of the State of Minnesota in collaboration with other state and federal authorities.

Sample Contract Section 7.2

13 Reports Vendor must agree to supply the data reports listed in the Scope of Work, Section XV, Mandatory Reports. All electronic files supplied to the MMCAP Office must be in a row and column format so they can be integrated into the MMCAP Office’s software system.

SOW7.17

14 New Accounts Vendor must supply a copy of all forms that an MMCAP Participating Facility must sign in order to set up an account.

SOW7.5 A. 6.

15 Shareback obligation

Vendor must agree to manage, at no additional cost to the MMCAP Office or the MMCAP Participating Facilities, the MMCAP annual shareback obligation (“credit”). The MMCAP Office will provide the Vendor with a list of MMCAP Participating Facilities receiving a shareback credit, the shareback credit amount for each facility, and a check or EFT for the total amount of all shareback credits to be provided. Vendor must apply the shareback credit to all listed MMCAP Participating Facilities within 15 business days of the receipt of the funds. Within 30 business days of the receipt of the funds, Vendor must provide the MMCAP Office with a listing of the invoice or credit memo numbers for each MMCAP Participating Facility for which the credit was applied.


16 Fees Vendor must agree that all changes to the MMCAP Service Fee Matrix will be communicated to the MMCAP Office in writing with a minimum of five business days notice. Vendor service fees may only change on a quarterly or less frequent basis.


17 Additional Fees Vendor must agree to not add any fee, percentage, or other cost to the products purchased under the MMCAP contract unless the fee, percentage, or cost is defined and approved in writing by MMCAP in the contract or by amendment to the contract.


18 Stand-Alone Agreements

Vendor must agree that all piggyback or stand-alone agreements with MMCAP Members or MMCAP Participating Facilities that relate to the services provided under any resulting contract must be negotiated and approved by the MMCAP Office. Any such authorized agreements will be executed as an amendment to the MMCAP contract.


17

7.2 Definition of Terms.

For the purpose of this solicitation, and any resultant contract(s), the following words or terms are used as defined.

340B Drug Pricing Program (340B) - The 340B Drug Pricing Program resulted from enactment of Public Law 102-585, the Veterans Health Care Act of 1992, which is codified as Section 340B of the Public Health Service Act. Section 340B limits the cost of covered outpatient drugs to certain federal grantees, federally-qualified health center look-alikes and qualified disproportionate share hospitals. Several MMCAP participating facilities are eligible and participate in the 340B Drug Pricing Program.

Adequate Supply- A supply of items made available to the MMCAP Participating Facilities that allow conformity with the delivery requirements set forth in the solicitation, “Delivery,” within the parameters of the fill rate and historical purchase patterns.

Closed Distribution Products (CDP) - Closed distribution is either required by the manufacturer or by the FDA. Reasons for the closed distribution of a product include patient safety, product stability, or the product is new to the market. Most orders for closed distribution products are passed through the Vendor for delivery directly by the product supplier. Confirmation Printback/Order Confirmation - An electronic confirmation report generated from the Vendor’s ordering system and sent electronically back to the ordering facility indicating that the requested items are available, on manufacturer back order, out of stock, or deleted, etc. Also referred to as the Confirmation Printback Report.

Controlled Substance Ordering System (CSOS) - Allows for secure electronic transmission of Schedule I-V controlled substance orders without the supporting paper DEA Form 222.

Drop Shipments - Products ordered by the MMCAP Participating Facilities through the Vendor and shipped directly to the MMCAP Participating Facilities from the manufacturer/product supplier. The manufacturer/product supplier notifies and bills the Vendor, who then invoices and receives payment from the MMCAP Participating Facility.

EDI - Electronic Data Interchange. Inter-process (computer to computer application) communication of business information in a standardized electronic form.

Implementation Period - A sixty (60) day calendar period from the date of contract award. This implementation period will be used as a phase-out, phase-in transition period of the old contract to the new contract. Transition period may be referred to synonymously with Implementation Period.

Manufacturer Back Order (MBO) - A physical order placed by the Vendor to a pharmaceutical manufacturer and which is not shipped to the Vendor from the pharmaceutical manufacturer within seven (7) calendar days.

MMCAP Member(s) – Any of the, currently, 45 MMCAP member states plus the Cities of Chicago and Los Angeles and any other members added or deleted during the life of the contracts.

MMCAP Participating Facility - Any facility listed by the MMCAP Office as an active participant of MMCAP program. A current listing of MMCAP Facilities is provided to all MMCAP vendors monthly.

MMCAP Office – The administrative staff of the MMCAP Program responsible for initiating and administering all MMCAP contracts. Located at:

MMCAPMinnesota Department of AdministrationMaterials Management Division

18

112 Administration Building 50 Sherburne AvenueSt. Paul, MN 55155

MMCAP State Contacts – purchasing and pharmacy professionals are designated by MMCAP Member States to serve as liaisons between MMCAP and the MMCAP Participating Facilities in each State. A list of MMCAP State Contacts is available at http://www.mmd.admin.state.mn.us/mmcap/background_current_states.htm.

National Drug Code (NDC) – a unique 11-digit number which is a universal product identifier for human drugs. The NDC identifies the labeler code, product code (strength, dosage form, and formulation), and package code (package size and type). All NDCs reported to the MMCAP Office must be in the 5-4-2 configuration.

Next Day Delivery - Orders placed Sunday through Thursday by MMCAP Participating Facilities by the designated time as proposed by the Vendor which will be delivered the next business day. Orders placed on Friday or Saturday must be delivered on the following Monday.

Next Scheduled Delivery Day - Based on the terms outlined in the solicitation and any resultant contracts, the next scheduled delivery day is the day agreed upon by the PPV and the MMCAP Participating Facility for delivery of products. For some MMCAP Participating Facilities, the next scheduled delivery day may not necessarily denote that the delivery will be made within 24 hours.

Non-Contract Item - Any product not under a current MMCAP contract or the 340B contract.

Pedigree - Is a record containing information regarding each transaction resulting in a change of ownership of a given medication, from sale by a manufacturer, through acquisition and sale by one or more wholesalers, manufacturers, or pharmacies, until final sale to a pharmacy or other person furnishing, administering, or dispensing the medication.

Pharmaceutical Prime Vendor (PPV) - Also referred to as Vendor or Prime Vendor, is a business that functions as a purchaser’s source of distribution for a wide array of pharmaceutical and related products as identified by the customer. A PPV is responsible to maintain an adequate supply of and distribute pharmaceuticals and related items and any other items contracted for that are dispensed through the MMCAP Participating Facilities’ pharmacy service.

Products - Synonymously used to denote the merchandise requested by the MMCAP Participating Facilities to be delivered through the Vendor.

Stock Outage - An occurrence wherein the Vendor cannot make available an adequate supply of the customers requested products. As opposed to a MBO situation, the Vendor will be held responsible for stock outages.

19

http://www.mmd.admin.state.mn.us/mmcap/background_current_states.htm

7.3 Service Area

Vendor will provide either national (ALL MMCAP Members) or regional distribution services to MMCAP Members and will provide the full range of contracted services to all requesting MMCAP Participating Facilities within the contracted service area. A Vendor proposing service in a regional area must identify whole (not partial) states it proposes to service and must be able to provide service to a minimum of two (2) complete states in a geographical area. Proposals offering partial coverage to any state will NOT be considered for that state. The MMCAP Office reserves the right to add or delete states at any time during the life of the resulting contracts.

1. Indicate whether Vendor is proposing national or regional distribution. a. _____ National b. _____ Regional (Indicate which states Vendor proposes to service on

the table below.)

2. For the proposed service area(s), include the primary distribution center(s) that will provide service to that MMCAP Member (the primary distribution center identified must meet all regulatory requirements to service that MMCAP Member).

Yes NoProposed Distribution

Center(s)

1. National Distribution

2. Regional Distribution

Alabama Alaska Arizona Arkansas Colorado Delaware Florida Georgia Hawaii Idaho Indiana Kansas Kentucky Louisiana Maine Maryland Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Mexico New York North Carolina North Dakota

20

Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming City of Chicago City of Los Angeles

7.4 Customer Service

A. Customer Service to MMCAP Office

1. Primary Account Representative. Describe Vendor’s designated Account Representative for the MMCAP Office. Provide:

a. The name(s) and title(s) of the specific individual(s) b. A description of his/her principal responsibilities, including all other

accounts servicedc. The individual’s credentials, education, and experience, in curriculum vitae

formatd. The number of years of wholesale distribution experience, including any

government and GPO experiencee. The location of this individual’s position within the corporate structure,

including an organizational chart (include names, titles, areas of responsibilities, contact details).

f. A schedule and agenda of proposed Vendor-initiated meetings with the MMCAP Office

g. A description of the process for measuring this individual’s customer service levels

h. A description of how he/she will be empowered to provide the required responsibilities

i. An alternate Account Representative (include individual’s title) who is designated to act on behalf of the Account Representative while that person is absent or otherwise unavailable

j. Describe an escalation procedure for the MMCAP Office if MMCAP determines the Primary Account Representative to be non-responsive

2. Business Review. Provide a description of Vendor’s business review to MMCAP Office.a. How often will the reviews occur?b. Where will they take place?c. What will they cover?

3. Additional Contacts. Provide functional contacts from Vendor’s company for the following, including names and contact information:

21

a. Contract issues/discrepancies (product stocking, product loading, pricing)

b. Class of trade issues (contract eligibility, denials, etc.)c. Issues concerning MMCAP’s invoice auditing serviced. Vendor distribution service feese. Data/reporting issuesf. Electronic invoice auditing dispute resolution

B. Customer Service to MMCAP Participating Facility

1. Customer Service Department. Describe the customer service department available to MMCAP Participating Facilities, including the following:

a. Overall operation. Is the department a centralized call center or is it housed at individual distribution centers?

b. Principal responsibilities of the customer service representativesc. Minimum education required for the customer service representativesd. Minimum job qualifications. Include the average number of years of

customer service experience for the customer service department(s) (experience is limited to the years serving in wholesale distribution).

e. Training provided, including continuing education opportunitiesf. Hours of operation, include time zonesg. Average call lengthh. Average wait time to reach a representativei. Average response time to problem resolutionj. Detailed breakdown of the types of calls that are received (e.g., stocking

issues, billing inquiries, etc.).k. Schedule coverage (e.g., average number of people working during the hours

of operation, peak coverage, etc.)l. MMCAP Participating Facilities’ points of access (e.g., telephone, e-mail,

etc.)m. Technical support and hoursn. After hours emergency optionso. Organizational chart of the Customer Service Department (name titles, areas

of responsibilities, contact details).p. A description of the process for measuring customer service levels

2. MMCAP Participating Facility Customer Account Representative. Describe the Customer Account Representative contact available to MMCAP Participating Facilities and MMCAP State Contacts, including the following:

q. Principal responsibilitiesr. Minimum education requireds. Minimum job qualifications. Include the average number of years of

wholesale distribution account representative experiencet. Training provided, including continuing educationu. Organizational chart of Customer Account Representatives (name titles,

areas of responsibilities, contact details)v. Types of customer contact, telephone calls or on-site visitsw. Complete the Customer Account Representative Visit table below:

22

Monthly Purchasing Volume Frequency of Contact (in days) Type of Contact (telephone, on-site visit, etc.)

$0 - $5,000

$5,001 - $10,000

$10,001 - $15,000

$15,001 – $20,000

$20,001 - $25,000

$25,001 – $30,000

$30,001 - $35,000

$35,001 - $40,000

$40,001 - $45,000

$45,001 - $50,000

$50,001 - $55,000

$55,001 - $60,000

$60,001 and Up

x. Propose a schedule of Vendor-initiated meetings to discuss the following with the MMCAP Office and representatives from each Member State:

i. Customer satisfactionii. Vendor performance

iii. Other pertinent topics

7.5 New AccountsDescribe, in detail, the entire process for setting up new accounts from the point a new facility joins MMCAP to the point of first order through Vendor. Include:

1. A detailed, numbered list describing the entire process for setting up a new

MMCAP Participating Facility account, include an average time for completion of each step

2. Clearly indicate if there are any differences between new accounts being set up during the transition period (May-June 2009) from those set up after transition but during the contract term

3. Levels of automation for the account set-up process (electronic/online versus manual)

4. Vendor’s new account representative, include names and contact information, as well as an alternate contact

5. A description of how Vendor ensures MMCAP Participating Facilities are attached to and receive the proper contract pricing

6. Provide a complete set of any and all documents an MMCAP Participating Facility will be required to execute in order to obtain Vendor’s services (e.g., credit application, software license, returned goods certification, etc.)

23

7.6 Inventory Management

A. MMCAP-Contracted Vendors. Vendor must have agreements with all MMCAP-contracted vendors necessary to provide all MMCAP contract products.

1. Indicate on the table below with which of the current MMCAP-contracted vendors you have agreements. Note: MMCAP’s generic pharmaceutical contracts will be subject to change in the next contract cycle effective July 1, 2009.

2. If Vendor does not currently have an agreement with an MMCAP-contracted vendor, when will an agreement be put into place?

MMCAP-Contracted Vendors Yes No

Abbott Laboratories, PPD-HPD

Abbott Labs, Diagnostics

Abbott Nutrition

Actavis

Akorn, Inc.

American Health Packaging

American Regent

Amgen

Amneal Pharmaceuticals

Amphastar Pharmaceuticals

Apotex Corp

Apothecus Pharm

Applied Nutrition Corporation

APP Pharmaceuticals (formerly Abraxis)

Astra/Zeneca Pharmaceuticals

Aurobindo Pharma

Axcan Pharma US, Inc.

Azur Pharma

B. Braun Medical Inc.

Barr Labs/Pliva

Bausch & Lomb Pharmaceuticals

Baxter Healthcare

Baxter Global Pharmaceutical Injectables

Baxter Global Anesthesia & Critical Care

Bedford Labs

Berna Products Corp

Beutlich, Lp

Birchwood Labs

Boca Pharmacal

Boehringer Ingelheim

Bradley Pharm

24

Braintree Laboratories

Breckenridge Pharm

Bristol-Myers Squibb

Caraco Pharmaceutical Labs

Carolina Medical Products

CB Fleet & Co

Cetylite Industries

Combe, Inc.

Core Pharma

Cura Pharm

Cypress Pharm

DAVA Pharm

Dermarite

Dey Laboratories

Duramed

Dr. Reddys Labs

EBEWE Parenta Pharm

Eisai, Inc.

Eli Lilly & Co

Ethex Corporation

Falcon Pharmaceuticals

Ferndale Pharm

Forest Pharmaceuticals (Inwood)

Fougera & Co.

G & W Laboratories

Geri-Care

Geritrex Corp.

Glades Pharmaceuticals

Glenmark Pharm

Graceway Pharm

Greenstone

GSK (Glaxo Smith Kline)

Hi-Tech Pharmacal

Home Diagnostics

Hospira Worldwide

Humco

Johnson & Johnson HCS

JHP Pharmaceuticals

Kerr Group

Konsyl Pharmaceuticals

KVK-Tech

Lannett

25

Major Pharmaceuticals

Mallinckrodt Inc.

McKesson Packaging Services (Sky)

Mead Johnson

Medicure Pharma

Medique Products

MedPointe Pharmaceuticals (Meda Pharmaceuticals)

Merck & Co.

Merck Vaccine Division

Monarch Pharmaceuticals (King)

Morton Grove Pharmaceuticals, Inc.

MSP Distribution Services

Mylan Pharmaceuticals

Nephron Pharm

Nestle HealthCare Nutrition

Nestle Nutrition, A Division of Nestle USA

Novartis Consumer

Novartis Pharmaceuticals Corp

Novartis Vaccines & Diagnostics

Novo Nordisk

Paddock Labs

Par Pharm

Perrigo Pharm.

Pfizer U.S.

Pharmaceutical Associates, Inc.

PharmaDerm

Plus Pharma

Prasco LLC

Precision Dose

Procter & Gamble

Purdue Pharma, LP

Qualitest Pharmaceuticals, Inc.

Ranbaxy Pharmaceuticals Inc.

Richmond Pharm

Rising Pharm

Roche Diagnostics

Roche Labs

Roxane Labs Inc.

Sandoz Pharmaceuticals

Sanofi Aventis

Sanofi Pasteur

26

Santarus Inc.

Savage Labs

Schering Corp

Schwarz Pharma, Inc.

Sepracor

Sigma-Tau Pharmaceuticals

Silarx Pharm

Solvay Pharmaceuticals

Stanbio Lab

Stratus Pharm

Takeda Pharmaceuticals

Talecris Biotherapeutics Inc.

TAP Pharmaceuticals

Taro Pharmaceuticals

TEVA Pharm USA

TEVA Specialty

Ther-Rx Corporation

Three Rivers Pharm

UCB Pharma, Inc.

UDL Laboratories

Ulmer Pharmacal

United Research Labs-Mutual Pharm.

Upsher Smith Labs

Versapharm Inc.

Vista Pharmaceuticals

Watson Pharmaceuticals

West-ward Pharmaceuticals

Wockhardt USA

Wyeth Pharmaceuticals

X-Gen

B. Vendor’s Business Requirements. Describe the requirements a pharmaceutical manufacturer must meet in order to do business (have products stocked) with the Vendor.

C. MMCAP Contract Products. Describe how Vendor will maintain an inventory of MMCAP-contract items sufficient to meet the needs of the MMCAP Participating Facilities. MMCAP has provided usage information in the Excel File entitled “PPV RFP Data 112508.xls” available for download at: http://www.mmd.admin.state.mn.us/solicitations.htm or http://www.mmd.admin.state.mn.us/perlscript/current_rfps.pl. Please note, past contracts and purchasing patterns are subject to change and are therefore not an absolute indication of future performance. Describe the following in detail:

1. The method used by the Vendor to monitor usage after the start of the MMCAP contract period. How are the MMCAP usage data and the Vendor’s own usage

27


http://www.mmd.admin.state.mn.us/solicitations.htm

data used to assure that sufficient inventories are available to supply the average monthly usage of the MMCAP Participating Facilities?

2. The method for addressing a special request from an MMCAP Participating Facility, such as large quantities of identical lot numbers, etc.

3. How are unanticipated increases in orders managed (e.g., orders that exceed the prior 30-day usage by 150%), such as governmental entities placing large orders at the end of their fiscal years.

4. Vendor’s policy for discontinuing MMCAP contract products from distribution center inventories for non-movement. What is the minimum number of units sold per month that would cause Vendor to consider the product for non-movement? What does the Vendor do to ensure that these items are truly non-movement items and that MMCAP Participating Facilities are not purchasing equivalent non-contract alternatives?

5. Vendor’s policy for adding an MMCAP contract product to inventory at each distribution center. Provide the average number of days this process takes, including both new-to-market products and previously existing products.

6. Describe the process, including timeframes, for adding to inventory any previously non-stocked MMCAP-contract item requested by any MMCAP Participating Facility.

D. Stock Outs. Describe Vendor’s process for securing and providing MMCAP contract products in the event a distribution facility is out of inventory of a product that is not on manufacturer backorder. State the expected time frame for the described process(es) (e.g., average number of days, etc.). Would the MMCAP Participating Facility be subject to any Vendor-assessed fees (e.g., minimum order, additional delivery fee, etc.) for inventory transfers in a stock out situation that is not due to a manufacturer backorder? If so, fees associated with transferring products between Vendor distribution centers must be included in the service fee structure.

E. Manufacturer BackordersDescribe how and when (e.g., during ordering, on the order confirmation report, etc.) MMCAP Participating Facilities are notified of any ordered item that is on backorder. How can an MMCAP Participating Facility or the MMCAP Office tell the difference between an MBO caused the Vendor and an MBO caused by the manufacturer?

F. Service Level Calculations Raw and Adjusted Fill Rates will be individually calculated on a monthly basis for each MMCAP Participating Facility’s account(s) (including 340B accounts) serviced by the Vendor. The Vendor must submit a Raw and Adjusted Fill Rate Report using the calculations defined below (Service Level Definitions) by distribution center to the MMCAP Office on a monthly basis. See Reporting Section for more information regarding this report.

Vendor stock outages due to cancellations/backorders/non-movement by the Vendor will be considered a failure to perform by the Vendor and may be considered grounds for termination of the contract.

In the event the awarded Vendor fails to maintain its committed fill rates for two consecutive months, the Vendor will credit the affected MMCAP Participating Facilities in an amount equal to one fifteenth of one percent (0.15%) of the aggregate net purchases by such facility for the two months of reduced service. So long as the awarded Vendor is current in the crediting of such amounts, such failure will not in itself constitute a default. Failure to meet Raw and Adjusted Fill Rates for any MMCAP Participating Facility will

28

be officially recorded as part of the Vendor’s contract performance, which is available for public review and may be used as past performance in any future MMCAP awards.

If the Vendor fails to make prompt shipment of MMCAP contract products due to Vendor-related stock outages, cancellations, backorders, or non-movement, the ordering MMCAP Participating Facility may buy an alternate equivalent (generic) substitute product on the open market for the period in which the Vendor is unable to provide the product. The Vendor will be liable to the MMCAP Participating Facility for any excess cost over the MMCAP contracted price and the alternate price of the non-contract product. This will be in effect for 90 days from the date the Vendor is first unable to supply the product to an MMCAP Participating Facility. Vendor must provide the information necessary to make this type of claim and the Vendor contact to which claims should be submitted. Credits due to an MMCAP Participating Facility based on excess product procurement costs caused by a Vendor stock outage or cancellation/backorder, other than MBOs, will be routed from the Vendor, back to the participating MMCAP Participating Facility.

The MMCAP Office retains the right to investigate the backorder situation to determine the cause and responsibility of the backorder and to assist the Vendor and the MMCAP Participating Facilities during the MBO period.

1. Using the Adjusted and Raw Fill Rate Calculations as defined below, provide:a. Monthly Raw and Adjusted Fill Rates for each distribution center for the

period of May 2008 through October 2008.b. The Vendor’s committed monthly Raw and Adjusted Fill Rates for the term

of the contract.

2. Service Level Definitions

Raw Fill Rates will be calculated by dividing the number of units delivered by the number of units ordered.Raw Fill Rate = Number of Units Delivered Number of Units Ordered

Adjusted Fill Rates will be calculated by dividing the number of units delivered by the number of units ordered minus the number of manufacturer backorder (MBO) units.Adjusted Fill Rate = Number of Units Delivered Number of Units Ordered - MBO Units

a. In order for the Vendor to include a MBO Unit in the above Adjusted Fill Rate Calculation, an MBO Unit must be equal to or greater than the number of units ordered on the MMCAP Participating Facility’s order. If requested, the Vendor must provide documentation to the MMCAP Office that it has attempted to maintain product availability from the manufacturer. Examples of supporting documentation could include, but is not limited to, documentation that supports the existence of an outstanding purchase order between the Vendor and the product manufacturer/supplier for the requested products. In order for the Vendor to include an MBO Unit in the above Adjusted Fill Rate Calculation, the outstanding purchase order between the Vendor and the product supplier must have been in existence for no less than three calendar days prior to the MMCAP Participating Facility’s request.

b. Product quantities of the most recent month in question that exceed the prior 30-day usage by 150% will be exempt from the calculation.

c. Partially filled lines (greater than 50% of the quantity ordered) which are reordered and completely filled within two days will be excluded from the service level calculations.

29

d. Vendor stock outages due to cancellations, backorders, or non-movement by the Vendor on products that have met the prerequisites of the formula will be included in both the Raw and Adjusted Fill Rate calculations.

7.7 Management of MMCAP Contract Products

A. Price Loading. The Vendor will be responsible for monitoring MMCAP’s Contract Updates, which will be sent at a minimum on a weekly basis, to obtain product/pricing updates. In the event that the Vendor makes any product/price changes without prior written notification to the MMCAP Office, the Vendor will be responsible to the MMCAP Participating Facilities for the difference in cost between what the MMCAP Participating Facilities were invoiced and the actual MMCAP contract price. Describe the following:

1. Given an effective date of five business days out from receiving the contract update, propose both an expected timeframe and a maximum amount of time in which Vendor will have MMCAP contract changes (e.g., price changes, product additions/deletions, contract extensions, contract expirations, NDC changes, etc.) loaded in its system.

2. Provide all assumptions in calculating the timeframes above.3. Describe any barriers that would prevent the product/pricing updates from

being loaded by the timeframes proposed above.4. Provide the Vendor’s committed time for loading contract updates for

the term of the contract. All exceptions to the committed time for price loading must be approved in writing by the MMCAP Office.

B. Product Additions/Deletions

1. MMCAP Contract Database. Vendor may not remove any MMCAP contract products from its database without prior written approval from the MMCAP Office. Any notice received from a manufacturer or MMCAP Participating Facility of price changes for products on MMCAP contracts will be forwarded to the MMCAP Office for validation. Vendor will provide the MMCAP Office with a weekly report of all MMCAP contract activity which lists any changes made to the MMCAP contract. See Scope of Work, Section XV., Mandatory Reports, for more information regarding this report.

Provide detailed responses for the following:

a. How will Vendor ensure that contract products are not removed without prior written knowledge to the MMCAP Office?

b. Propose damages for removing MMCAP contract products before they should be removed.

c. What steps, including a timeframe for each step, do you take to ensure there is adequate inventory for a product that is added due to a change in the NDC number, deletion, replacement of a product by the manufacturer, or in situations where the Vendor is notified that MMCAP has determined a need to switch its procurement selections to the only available contract priced product.

d. What type of notification will be provided to the MMCAP Office, and how often will it be sent, if an MMCAP-contracted vendor reports a price change that has not been reported by the MMCAP Office.

e. Provide a sample of the contract activity report requested above. Data fields should include, but are not limited to:

30

Item Description NDCCurrent Price Previous PricePackaging ManufacturerEffective DateChange Type (e.g., Addition, Change, Price Increase, etc.)

f. When an MMCAP Participating Facility requests to add an MMCAP contract product to the distribution center’s inventory, commit to an average number of days in which the product will be adequately stocked based on usage.

C. Convenience Contracts. MMCAP has several convenience or access contracts in place with various manufacturers for Wholesale Acquisition Cost minus zero percent (WAC – 0%). These purchases must be counted as on-contract purchases.

1. Does Vendor have the ability to report all WAC – 0% pricing as on-contract purchases to the MMCAP Office, MMCAP-contracted vendors, and MMCAP Participating Facilities?

2. Will these products be included in each MMCAP Participating Facility’s Service Fee Discount?

7.8 Ordering Equipment

A. Ordering System. Provide a detailed description of Vendor’s ordering system(s) and any value added offering for these.

B. Hardware, Software, and Devices

1. Describe in detail the hardware, hardware configurations, software operating system(s), and version that will be provided and their associated fees, if any. Be sure to include this information ONLY in the Pricing and Fee Information Worksheet. DO NOT list any fee information in this section.

2. Describe Vendor’s peripheral equipment (scanners, hand held devices, printers, etc) necessary for electronic order entry and bar code scanning capability. The equipment to be furnished by the Vendor will be fully installed and perform to manufacturers’ specifications.

3. Describe Vendor’s procedure for communicating and providing updates or systems changes and training on these changes as they occur throughout the term of the contract.

C. Installation. Describe the installation of the above cited equipment and software.

D. Training. Describe Vendor’s orientation and training program for Vendor-furnished equipment and automated ordering systems using the minimum training requirements for MMCAP Participating Facilities (include both initial training during implementation period and ongoing training as requested by MMCAP Participating Facilities during the contract term). Include timelines for all events.

MMCAP’s preferred training will include:1. Proper use of order entry devices including computer and hand held units2. How to access and interpret Vendor’s inventory status3. Order placement process (product inquiry, placement, order edit, printback

confirmation, etc.)4. Any required ordering system maintenance5. Downloading price changes

31

6. Performing file maintenance7. Requesting or printing bar code labels8. Download/Run/Print/Export contractually required reports9. Operation of Inventory Management program10. Identifying MMCAP contract products (e.g., contract ranking)11. Any other commercially available training in use of the equipment or ancillary items12. Contact information in case of questions regarding ordering13. Training guides or manuals and system operating manuals, accessible on line

(including all updates), for all equipment and software furnished by the Vendor to each individual ordering facility

14. Assigning of account login IDs and passwords15. Item Return Processing Training

E. Ordering System(s) Back-up Service, Maintenance and Repair. Describe all available emergency service and repair services for the ordering system(s) and include any fees. Include all timelines for service and back-up ordering procedures if repair cannot be completed immediately or is not feasible. Be sure to include fee information ONLY in the Pricing and Fee Information Worksheet. DO NOT list any fee information in this section.

F. Label and Marking. Describe Vendor’s ability to provide bar coded shelf labels, and any associated services. Specifically address the following:

1. Describe the Vendor’s ability to provide bar coded shelf labels.2. Are shelf labels able to be printed from Vendor’s online software system?3. Can MMCAP contract product status be clearly indicated on Vendor’s shelf labels?4. Provide examples of shelf labels.

7.9 Order Placement

A. Vendor will provide to each MMCAP Participating Facility an ordering method that allows the facility to quickly and accurately order MMCAP contract products, within the technological capabilities of the MMCAP Participating Facility. At a minimum, the Vendor’s ordering systems should provide the following functionalities

Clearly identify all MMCAP contract products and whether these products

are in stock Build and place electronic orders Review pending orders for correctness and contract compliance Provide online allocation of ordered amounts Receive order confirmation report

1. Describe in detail all the pharmaceutical ordering systems available to MMCAP Participating Facilities (Internet, phone orders, hand held electronic ordering device, fax orders, etc.). Are all ordering systems available for each distribution center?

2. For each system, describe the setup, implementation, training, and plans for maintenance.

3. Describe how the needs of MMCAP participating facilities, with differing levels of technological sophistication, can all be met by the Vendor’s systems.

4. Describe any associated fees for these systems in the Pricing and Fee Information Worksheet, if any. DO NOT list any fee information in this section. Include any criteria used (e.g., total annual purchases, etc.).

5. For Internet ordering, provide access to the ordering site and allow the RFP evaluation panel the ability to submit a simulated order. Scoring: speed and ease of operation

32

6. Indicate whether Vendor’s online ordering system is able to display the following information.

Data Field Yes No

MMCAP Participating Facility’s nameVendor assigned account numberProduct NameVendor’s Product NumberGeneric Name Product Description Strength Packaging Manufacturer Unit dose indicator Form (e.g, tablet, capsule, etc.)National Drug Code (NDC) for applicable productsWholesale Acquisition CostAverage Wholesale CostOrange Book RatingUniversal Product Number (UPN), where applicableUniversal Product Code (UPC), where applicableProduct Control Schedule (e.g., CII)DEA number (where applicable)HIN number (where applicable)Type of contract – contract identification or code that identifies product as an MMCAP contract product, non-contract, 340B, or alternate contract product Contract price (specific to the pricing and contract eligibility of each customer).Product denoted as available as a Drop ShipmentProduct inventory status (e.g., stocked, unavailable due to MBO, Vendor Out of Stock, or allocation situations)Real-time product inventory quantity available (product in stock minus those allocated to orders) Alternate product search optionProduct inquiry search optionAutomatic substitution information option

7. How are special orders such as controlled substances (e.g., CIIs), drop ships, and closed distribution shipments, identified on the Vendor’s ordering screen? Is the MMCAP Participating Facility able to review any additional costs associated with the special order prior to finalizing the order?

8. Propose a standard default customized ordering set-up for each MMCAP Participating Facility to ensure MMCAP contract compliance. This default set-up will be approved by the MMCAP Office and required for all MMCAP Participating Facilities prior to being deployed. This default set-up will be implemented for all MMCAP Participating Facilities using the resulting contracts.

9. Several MMCAP Participating Facilities are eligible for the federal 340B Drug Pricing Program.

a. Is Vendor authorized, or otherwise in good standing, to distribute products covered by the 340B Drug Pricing Program to MMCAP Participating Facilities that are eligible for the 340B program?

b. Describe Vendor’s policies for managing 340B sales under any contract with MMCAP resulting from this solicitation (e.g., will the MMCAP Participating Facility maintain two separate accounts [one for MMCAP products and one for 340B products], what are the requirements for the Vendor to manage 340B eligible MMCAP Participating Facility bill-to/ship-to (including drop ship) accounts, etc.).

33

10. Automatic Substitution will only be permitted upon specific request by an MMCAP Participating Facility, with notification to the MMCAP Office. In instances where the Vendor uses the Automatic Substitution process, the MMCAP Participating Facility must be notified of the substitution and the substituted item must be annotated as such on the MMCAP Participating Facility’s order confirmation. Once such an agreement is entered into between the Vendor and the MMCAP Participating Facility, the Vendor will be required to maintain an adequate supply of the alternate product. There will be no commitment to buy the alternate item and any order consisting of alternate items will still require the prior approval of the MMCAP Participating Facility. Automatic Substitution by the Vendor without the customer’s prior approval is prohibited. Upon request, Vendor will supply the MMCAP Office with a list of facilities using Automatic Substitution. Describe Vendor’s automatic substitution policy.

11. Backorders. In the event of any backorder situation, describe Vendor’s backorder and “Kill/Fill” policies and processes.

Specifically address the following situations:

a. Vendor temporarily outi. Transfer from another distribution center

ii. Purchase from pharmaceutical manufacturerb. Manufacturer short term backorderc. Manufacturer long term backorderd. Recallse. Allocationsf. Discontinued Productsg. Partial Fillsh. Maximum inventory allocation reached

12. Confirmation Printback/Order Confirmation - All orders processed thru the electronic ordering system will receive a confirmation printback or order confirmation generated from the Vendor’s system and sent to the ordering MMCAP Participating Facility.

a. Describe the Vendor’s order confirmation process, timeframe, and provide any associated documentation.

b. For special orders requiring non-standard distribution (e.g., drop ships, controlled substances, etc.), are there additional fees, and if so, are notice of these fees and non-standard distribution listed as such on the order confirmation report? Does the order confirmation reflect the total line item cost of the MMCAP Participating Facility’s special order?

c. Provide samples of the confirmation printback report.

13. Controlled Substances Ordering System - Describe Vendor’s controlled substances ordering system (CSOS), if available, for MMCAP participating facilities that are enrolled in this program.

At a minimum, responses should address the following:

a. Paper Method

i. What is Vendor’s typical order turn around time for a paper form of DEA Form 222 for controlled substances?

ii. If a controlled substance is ordered with a paper form of DEA Form 222, is the controlled substance shipped with the rest of the original order, is it held until another order is submitted, or is it shipped separately when

34

Form 222 is received and approved? Are there any additional shipping charges for controlled substances that are shipped separately?

b. Electronic Methodi. If Vendor does not currently have an electronic CSOS, will this

technology be available, and if so, what is the expected availability?ii. What is Vendor’s typical turn around for an order using an electronic

DEA Form 222, if available?iii. If a controlled substance is ordered with an electronic form of DEA Form

222, is the controlled substance shipped with the rest of the original order, is it held until another order is submitted, or is it shipped separately when Form 222 is received and approved?

iv. Are there any additional shipping charges for controlled substances that are shipped separately from another order due to process delays? If so, be sure to include this information in the Pricing and Fee Information Worksheet. DO NOT list any fee information in this section.

v. What would be required for MMCAP Participating Facilities in order to use electronic CSOS technology?

14. Technical Support for Ordering - Describe the Vendor’s technical support available for assistance with ordering. Include hours of operation, available methods of communication, staffing levels, etc.

15. Special Orders - Many MMCAP Participating Facilities often make large, one-time purchases that are inconsistent with their regular ordering patterns (e.g., buy-ins at the end of the state fiscal year, large quantities of identical lot numbers etc.).

a. Describe Vendor’s preferred method for receiving these orders, including a detailed step-by-step procedure to be taken by the MMCAP Participating Facility and/or the MMCAP Office to ensure the order is fulfilled in a timely fashion.

b. How many days notice would be needed by the Vendor to accommodate these types of special orders?

c. Are Special Orders as defined above returnable?

7.10 Delivery

A. Routine Delivery. Vendor must provide free delivery for all MMCAP Participating Facilities when individual orders net more than $750. All delivery costs/fees should be included in the Vendor’s service fee matrix found on the Pricing and Information Worksheet. All routine scheduled order shipments should be F.O.B. destination, freight prepaid.

In addition to the above, describe:

1. For orders less than $750, provide detailed description of Vendor’s delivery charges, including any associated dollar volume requirements. All fee information must be included on the Pricing and Fee Information Worksheet. DO NOT list any fee information in this section.

2. Describe any additional fees for additional deliveries required on non-scheduled delivery days, e.g., Saturday, Sunday, or a holiday. All fee information must be included on the Pricing and Fee Information Worksheet. DO NOT list any fee information in this section.

3. Provide a daily order and delivery schedule.35

4. Provide the cut off time for each distribution facility’s ability to provide next day delivery, with the assumption that orders received on Sunday through Thursday will be delivered on the MMCAP Participating Facility’s next scheduled delivery day and that a Friday or holiday order will be delivered the next business day. State at what time on the following business day the order will be received.

5. Provide Vendor’s holiday schedule for each distribution center for 2009.6. Holiday schedules must be communicated to the MMCAP Participating

Facilities on an ongoing basis throughout the term of any resulting contract. Describe how Vendor will communicate holiday schedules to the MMCAP Participating Facilities.

7. Describe the method (e.g., air, courier, etc.) by which orders will be delivered and if all items constituting an order can be shipped by this method (i.e. aerosols, flammables, etc.). Is Vendor able to provide all legally required documentation for transport of specialized materials such as chemotherapeutic medications and hazardous materials?

8. Describe if same-day delivery is available and what criteria will be used in determining which MMCAP Participating Facilities are eligible for this service.

9. For 1-8 above, include any differences for delivery to MMCAP Participating Facilities in Alaska and Hawaii.

10. Vendor’s shipping terms of sale (e.g., F.O.B. destination freight prepaid, etc.), including an MMCAP Participating Facility’s desired response if lost or damaged products are discovered upon inspection of the order.

B. Drop Ship - The Vendor will be requested to act as a conduit to expedite and simplify the ordering and payment of drop shipped products. Unless approved by the MMCAP Participating Facility, drop shipments directly from product suppliers for recurring orders are prohibited.

1. For an MMCAP Participating Facility’s Drop Shipment request that is initiated with the Vendor either through its electronic ordering system, by phone, or by fax, describe Vendor’s drop ship policy (why certain items are selected to be drop shipped), procedure, and timeframes.

2. Include any additional associated fees and whether service fees will be applied to these deliveries. All fee information must be included on the Pricing and Fee Information Worksheet. DO NOT list any fee information in this section.

3. In the event a drop shipment is required by the Vendor to meet an MMCAP Participating Facility’s order for a quantity of MMCAP contract products because the quantity requested exceeds the Vendor’s inventory, there will be no additional charges for the drop shipment. Describe Vendor’s policy for complying with this requirement.

C. Delivery for Special Products

1. Special Products are those orders/items outside the routine delivery method of the PPV requiring special handling. Examples of these products could include: biological products, vaccines, controlled substances, etc.

Please describe the following in detail:

a. Describe Vendor’s process for appropriately shipping pharmaceuticals that have temperature restrictions.

b. Describe Vendor’s process for using temperature monitors and any fees related to the use of temperature monitors. All fee

36

information must be included on the Pricing and Fee Information Worksheet. DO NOT list any fee information in this section.

c. Clearly identify any products that would be considered outside the routine delivery method and therefore considered Specialty Products. Large categories of products should be broken out so that the MMCAP Office can easily identify which products require special handling.

d. Are there any additional fees for Special Products, as defined above? If so, please describe on the Pricing and Fee Information Worksheet. DO NOT list any fee information in this section.

e. Vendor’s policy for shipment refusal by an MMCAP Participating Facility in the event the product has not been inadequately packaged.

f. Provide a detailed description of the delivery process for orders that include products classified as controlled substances (e.g., will controlled substances be packaged separately from the rest of the delivery order). Specifically how will these items be packaged in accordance with current DEA requirements?

2. Vendors must not distribute MMCAP contract items through associated specialty distributors without the prior written approval of the MMCAP Office or without the manufacturer requiring the Vendor to do so. Describe Vendor’s process for notifying the MMCAP Office and MMCAP Participating Facilities that a product will be shipped through a specialty distributor.

3. MMCAP Office understands that certain manufacturers limit distribution through certain specialty distributors (e.g., Talecris).

a. With which specialty distributors do you have existing relationships? Describe this relationship (e.g., sister corporation, parent/subsidiary, contractual, etc.).

b. Describe how MMCAP Participating Facilities will order products that are only available through a specialty distribution network. Include which partner, in the relationship described in (a), will handle shipping and invoicing.

c. Will service fees be applied to sales processed through a specialty distributor?

D. Pedigree. Many MMCAP Participating Facilities have individual state laws requiring various levels of pedigree restriction. It is the Vendor’s responsibility to ensure that its business practices meet or exceed each MMCAP Member’s pedigree requirements. Vendor must also agree to adhere to any future changes in pedigree laws for all MMCAP Member states.

1. Describe Vendor’s process for staying informed of changes to pedigree laws in each MMCAP Member state.

2. If a new pedigree law requires a change to the current distribution procedure(s) for any MMCAP Member state, how many days notice will the MMCAP Participating Facilities in that state receive before the change occurs? How will new ordering/distribution procedures be communicated to the MMCAP Office and the MMCAP Participating Facilities?

3. Describe Vendor’s contingency plan in the event a new pedigree law requires a distribution procedure(s) with which the Vendor is unable to comply.

4. Complete the chart below for each MMCAP Member state to indicate the Vendor’s ability to provide products according to applicable pedigree laws.

37

Delivery38

E. Delivery of Bulky Items. Bulky items are those products that may be exceptionally cumbersome to deliver. Examples of these products may include cases of nutritional products, IV fluids, etc.

1. Clearly identify and define any and all products that Vendor considers to be

bulky items, if any. Large categories of products should be broken out so that the MMCAP Office and the MMCAP Participating Facilities can easily identify which products are considered bulky items.

2. All fees associated with the delivery of MMCAP contract products that are considered by the Vendor to be bulky items must be included in the Vendor’s service fee proposal. For non-contract items, are there any additional fees for the delivery of bulky items, as defined above? If so, please describe in the Pricing and Fee Information Worksheet. DO NOT list any fee information in this section.

3. Any handling fees for non-MMCAP contract bulky items MUST BE reported as a separate line item on the MMCAP Participating Facilities’ invoices.

4. In the event that the MMCAP Participating Facility approves the Vendor’s request to have bulky items drop shipped, will the product manufacturer and drop-ship notification be annotated on the MMCAP Participating Facility’s order confirmation?

5. The Vendor’s service fee will be applied to orders for bulky items for which MMCAP has a contract. Describe your process for complying with this requirement.

7.11 Inventory at an MMCAP Participating Facility

A. In the event an MMCAP Participating Facility requests assistance with inventory, describe the services (including associated equipment) Vendor is able to provide.

B. Provide any fees associated with these services, if any, in the Pricing and Fee Information Worksheet. DO NOT list any fee information in this section.

7.12 Contract Compliance

A. Vendor must encourage MMCAP Participating Facilities to purchase MMCAP contract products. To ensure overall MMCAP Participating Facility contract compliance, Vendor may be asked to provide, at no cost to the MMCAP State Contacts in each state served by the Vendor, a monthly report containing the following fields:

MMCAP Participating Facility name Agency account numbers (MMCAP Participating Facility ID Number and

Vendor account number) Contract volume (in dollars) by facility Not-on-contract volume (in dollars) by facility Total volume(in dollars) amounts by facility Number of line items shipped to the facility

39

1. The MMCAP Office’s preferred calculations for contract compliance appear below. Provide the calculation(s) that Vendor uses to determine contract compliance and describe how this may differ from MMCAP’s preferred calculations. Include definitions of each component included in the calculation. Vendor must agree to report contract compliance using the MMCAP Office’s preferred calculations whenever contract compliance is reported to the MMCAP Participating Facilities, the MMCAP Office, or any other entities designated by MMCAP.

Raw Contract Compliance:

MMCAP Contract Salesa

Total Salesb

C. MMCAP Contract Sales consist of products the MMCAP Office has negotiated a contract for.

D. Total Sales consist of MMCAP Contract Sales, Alternate Contract Sales, Vendor’s generic drug program pricing, and non-contract sales.

Adjusted Contract Compliance:

MMCAP Contract Salesa + Alternate Contract Salesb

Total Salesc

a. MMCAP Contract Sales consist of products the MMCAP Office has negotiated a contract for.

b. Alternate Contract Sales consist of products purchased under the 340B Program, products purchased from contract individually negotiated by the MMCAP Participating Facilities, or product purchased from the Vendor’s generic drug program pricing.

c. Total Sales consist of MMCAP Contract Sales, Alternate Contract Sales, and non-contract sales.

2. Provide a one-page sample of the Contract Compliance report. State the available frequency and format (e.g., Excel) of the report.

3. Describe what steps the Vendor will take to encourage the use of MMCAP contract items by MMCAP Participating Facilities.

B. Vendor must provide online electronic access to all purchasing data relating to the products that are purchased by each MMCAP Participating Facility to MMCAP and MMCAP Participating Facilities. Electronic access should provide a system for reporting each individual MMCAP Participating Facility’s purchases, as well as be capable of running reports on select groups of facilities. Users must be able to manipulate the data to build reports based on each MMCAP Participating Facility’s individual needs/requirements directly through the system or through the ability to transfer data into spreadsheets in a Microsoft Office compatible format. Common pre-defined reports (e.g., 80/20 reports) must be available.

40

Describe the following in detail:1. Give a complete description of the online reporting tools available.2. Provide examples of common pre-defined reports that are available.3. Describe Vendor’s ability to allow one user (e.g., super-user) to run reports for

several MMCAP Participating Facilities’ accounts at one time.4. Describe any fees associated with online reporting tools. Be sure to include this

information ONLY in the Pricing and Fee Information Worksheet. DO NOT list any fee information in this section.

C. MMCAP has several convenience or access contracts in place with various manufacturers for pricing set at Wholesale Acquisition Cost minus zero percent (WAC – 0%).

1. Does Vendor have the ability to count and report products priced at WAC – 0% as on-contract purchases?2. MMCAP Participating Facilities should receive service fee discounts for all WAC – 0% contract purchases. Describe Vendor’s policy for complying with this request.

7.13 Invoicing

A. Order Invoice

1. Invoicing and Payment. For MMCAP contract products, MMCAP Participating Facilities will be invoiced at the MMCAP contract price, plus or minus the negotiated service fee, throughout the life of this contract. Vendor will submit an invoice with each order. Invoices must be only for the amount of product delivered, not the amount ordered. Quantity ordered and quantity shipped must be based on the packaging associated with the NDC number.

Please describe the following in detail:a. Fill in the chart below indicating which fields will be reflected on the invoice

submitted to the MMCAP Participating Facility.b. Provide a sample invoice that will be submitted to MMCAP Participating

Facilities. c. Indicate Vendor’s flexibility to customize the invoice and what types of

modifications would be available at no cost to the MMCAP Participating Facility.

d. Define each omit code that may be used on Vendor’s invoice.e. Vendor’s policy for charging for non-MMCAP contract products (e.g., explain

whether MMCAP Participating Facilities will be invoiced at WAC or something lower/higher for non-contract products).

f. Will MMCAP Participating Facilities receive service fee discounts on non-MMCAP contract items?

41

B. Invoice Rounding

1. Describe Vendor’s invoice rounding protocols. Maximum points will be awarded for Vendors that round down if the third digit after the decimal is 4 or less.

2. Following the protocol described above, provide Vendor’s rounded answer for the following numbers:a. $15.751b. $15.744c. $15.755 d. $15.757

3. At what point in the invoicing process is the rounding occurring (e.g., total invoice amount or line item)?

C. Cash Discount

i. Does Vendor offer any other discounts for prompt payment outside of those described in the Service Fee Matrix (see Pricing and Fee Information Worksheet)?

ii. If so, describe any or all available discounts (e.g., 2%/10, net 30). All fee information must be included on the Pricing and Fee Information Worksheet. DO NOT list any fee information in this section.

42

D. Credits

1. Describe Vendor’s accounts receivable process and how payment is credited to an account. Give approximate time lines for how long it takes to apply a credit to an account.

2. Provide a copy of Vendor’s credit memo.3. Are credits available to each customer on-line, with the option to print a hard copy?4. How many days after notification will Credit memos for overcharges be issued?5. How often does Vendor issue credits due to a customer? 6. How often does Vendor notify MMCAP Participating Facility of credit balance(s)?7. How long are credits valid?8. Can credits be cashed out?9. Are credits transferable between MMCAP Participating Facility accounts?10. Are there any restrictions on credits?11. Fill in the chart below indicating which fields will be reflected on the invoice

submitted to the MMCAP Participating Facility.12. Describe how the Vendor processes manufacturer credits.13. Describe how the Vendor processes manufacturer recall credits.

14. Respond to each question/statement detailed below. YES NOIs the credit memo clearly identified as a CREDIT MEMO?Does the credit memo contain:

original purchase order, original Vendor invoice number original order date itemized listing of the product(s) affected, any rebill associated with the credit, the reason(s) for the credit (e.g., manufacturer credit,

merchandise return, etc.). net credit amount available to the MMCAP Participating

FacilityThe Vendor will take all necessary steps to ensure that credits that become available close to the end of the MMCAP Participating Facility’s Fiscal Year are available for use by the customer no later than five (5) days prior to the end of the fiscal year.

43

E. Rebills

1. How often are credit/rebills (debit/rebill) for Overcharges/Undercharges processed?

2. Is there a time limit beyond which Vendor will no longer process credit/rebills or debit/rebills? Does it make a difference whether the credit/rebill is due to a chargeback denial or a Vendor error (e.g., late pricing load, etc.)?

3. Respond to each question/statement detailed below. YES NOIs the rebill clearly identified as a *REBILL*?Does the credit memo contain: original purchase order, original Vendor invoice number original order date itemized listing of the product(s) affected credit memo associated with the rebill the reason(s) for the rebill (e.g., manufacturer chargeback denial , pricing error, etc.) the effective date of the price changeThe Vendor will take all necessary steps to ensure that credits that become available close to the end of the MMCAP Participating Facility’s Fiscal Year are available for use by the customer no later than five (5) days prior to the end of the fiscal year.Do rebills reflect the net difference due, after any original credited amount has been applied?Are rebills available to each MMCAP Participating Facility on-line, with the option to print a hard copy?

4. In the event of a Vendor error (e.g., late pricing load, vendor pricing error) that is solely attributable to the Vendor indicate a point at which Vendor will no longer process credit/rebills?

10 days____15 days____30 days____60 days____Other, _____ Explain?

F. Chargeback Denials.

1. Describe in detail how Vendor intends to work with the MMCAP Office in regard to chargeback denials?

44

2. From the time Vendor receives a chargeback denial from a MMCAP-contracted vendor, commit to a time in which all chargeback denials will be communicated to MMCAP Office.

2 days____5 days____10 days____Other, _____ Explain?

G. 810 EDI Invoices and Auditing

Vendor must have the ability to provide 810 EDI invoices to the MMCAP Office, MMCAP Participating Facilities, and any other entity designated by the MMCAP Office.

1. List any requirements that must be completed prior to a party receiving the 810s, include any forms or authorizations and processing instructions.

2. Describe Vendor’s process for working with MMCAP’s contracted invoice auditing vendor. Include details related to discrepancy resolution.

3. Does Vendor have a working relationship with the MMCAP’s contracted invoice auditing vendor (currently eAudit Solutions, Inc.)?

H. Goods Returned to the PPV

1. Provide Vendor’s returned goods policy for accepting returns from the MMCAP Participating Facilities in accordance with applicable laws, regulations, and normal business practices. MMCAP Office expects that there will be no associated fees for the following returns:

Products returned due to Vendor error (e.g., incorrect item or quantity).

Products received through the Vendor with visible or concealed damages.

Recalled products, regardless of level of recall. Products received through the Vendor that have less than six (6)

months shelf life dating at the time of receipt from the Vendor, unless otherwise authorized by the MMCAP Participating Facility.

a. Detail the specific criteria for accepting returns and all associated fees. All fee information must be included on the Pricing and Fee Information Worksheet. DO NOT list any fee information in this section.

b. Provide a timeline for the complete return cycle process (from notification to credit).

c. For products not included in the bulleted list above what is the restocking fee and timeframe?

d. How will the MMCAP Participating Facilities know whether a product that was ordered is returnable to the PPV for credit?

I. Reverse Distribution Processor (currently Guaranteed Returns)

Vendor must have an agreement throughout this contract period with the MMCAP-contracted returned goods processor (currently Guaranteed Returns, Inc.) to allow all MMCAP Participating Facilities to fully participate in the services offered by the

45

MMCAP Returned Goods Contract. The Returned Goods Processor is subject to change at any time.

1. Describe Vendor’s process for managing credit returned to the MMCAP Participating Facilities from the MMCAP-contracted returned goods processor.

2. Does Vendor charge a fee for processing the reverse distribution credit? All fee information must be included on the Pricing and Fee Information Worksheet. DO NOT list any fee information in this section.

J. Recalls

1. If any product distributed under this contract is recalled or removed by the manufacturer or the Vendor itself, or if a recall is suggested or mandated by a regulatory or official Agency, describe the process/method(s) for alerting MMCAP Participating Facilities and the MMCAP Office.

2. How long will Vendor agree to send recall notices (to MMCAP Office and MMCAP Participating Facilities) once product has been recalled? Does Vendor agree to send recall notices for the same time frame after contract expiration?

3. Provide an example of the recall notifications sent to MMCAP participating facilities and the MMCAP Office.

7.14 PaymentA. Does Vendor accept Electronic Funds Transfer (EFT)?B. If so, describe the steps an MMCAP Participating Facility would take in order to pay by

this method (EFT). If not, when does Vendor anticipate having this payment option (EFT) in place?

C. Include any additional discounts for EFT in the service fee pricing matrix, found in the Pricing and Fee Information Worksheet. All fee information must be included on the Pricing and Fee Information Worksheet. DO NOT list any fee information in this section.

D. Will Vendor allow MMCAP Participating Facilities to use State Purchasing Cards (P-cards) as a payment method? If so, please describe.

7.15 Emergency Order, Placement and Delivery. Vendor will be required to provide the MMCAP Office and the MMCAP Participating Facilities, the name, telephone number, and/or pager number of the Vendor’s representative responsible for providing emergency service.

A. Describe Vendor’s procedure for placement of emergency orders during non-business hours.

B. Describe associated fees. All fee information must be included on the Pricing and Fee Information Worksheet. DO NOT list any fee information in this section.

C. What is the expected response time?D. How quickly can orders be delivered (in hours)?E. How often (e.g., weekly, monthly, quarterly) will the Vendor’s contact

information for emergency orders be confirmed or updated?

7.16 Other Value Added Services

A. MMCAP Participating Facility Negotiated Contracts. Upon request of an MMCAP Participating Facility and after review and acceptance of the contract by the Vendor, is the Vendor willing to supply and distribute products acquired under contracts individually negotiated with [e.g., pharmaceutical] manufacturers by MMCAP Participating Facilities? Upon the Vendor’s acceptance to supply and deliver products under the MMCAP program,

46

the Vendor will be required to agree that the ordering, delivery, payment, and reporting terms of any resulting contract will apply to contracts individually negotiated by MMCAP Participating Facilities, including any associated service fees.

B. Value Added Services. List any value added services or products you wish to offer MMCAP or its Participating Facilities. Any proposed programs must be clearly marked as “value added,” and their associated cost must be clearly stated in the sealed “Pricing and Fee Information Worksheet.” These value added services should be carefully separated in your proposal in the “Pricing and Fee Information Worksheet” section so that they can be accepted individually.

C. Vendor’s Generic Drug Program. If Vendor offers in its proposal to this solicitation its generic drug program the following restrictions will apply:

1. The program will not be mass loaded to all MMCAP Participating Facilities. Individual Participating Facilities may request the program, but it may only be loaded upon prior written approval of the MMCAP Office.

2. The MMCAP Office must be provided a weekly update listing all MMCAP Participating Facilities accessing the generic drug program.

3. The Vendor may not solicit business from an MMCAP Participating Facility; the MMCAP Participating Facility must approach the vendor and make the request to be added to the generic drug program.

4. The Vendor-based generic drug program will be used as a back-up to the MMCAP contracts and available ONLY as an alternative if an item is not available because of manufacturer-caused actions.

5. Vendor’s generic source program MUST NOT compete with the MMCAP contract.6. Any generic source program offering must not be ranked in the Vendor’s ordering

system before any MMCAP contract items and MUST be clearly labeled as a secondary contract item.

7. Vendor may be required to identify generic drug program products as such when Vendor reports sales data to the MMCAP Office.

8. Monthly, Vendor will be required to pay an administrative fee to MMCAP of 2.5 percent on all sales of these generic drug program products to the MMCAP Office in addition to any distributor administrative fee payments.

9. In order to audit compliance and non-competitiveness with these requirements, Vendor must provide a report on a monthly basis to the MMCAP Office that details each item that is currently available on the Vendor-based contract program and the product price so that MMCAP can be sure that the Vendor’s program is not competing with the MMCAP contract.

Minimum data fields requiredNDC (11-digit format)Vendor product identification numberProduct description (generic name)PackagingSupplier name (Manufacturer)Quantity PurchasedTotal SalesVendor’s Generic Drug Program Price per Unit

47

7.17. Mandatory Reports The following reports are mandatory requirements in order for the proposal to be evaluated. The Vendor’s ability to comply with these requirements must be noted in the Mandatory Requirements section of this RFP. All electronic files supplied to the MMCAP Office must be in a row and column format so they can be integrated into the MMCAP Office’s software system.

A. Sales Data Report. Vendor must be able to supply to the MMCAP Office accurate monthly sales data on or before the 10th day of the second subsequent month (e.g., June’s data will be due July 10). This data MUST include the following for every transaction between the distributor and the MMCAP Participating Facility:

The first table details the required fields for the sales data report and the second table details the required record layout in fixed record format.

Required Data Field Full NameMMCAP-assigned facility IDMMCAP Facility NameVendor Distribution Center CodeVendor-assigned Account number for the MMCAP FacilityInvoice NumberInvoice Line NumberPurchase Order NumberInvoice date (mmddccyy)Buyer name or equivalent of buyer ID for person submitting the invoicesVendor's (distributor) SKU item numberNDC of purchased product in 5-4-2 format as stored in First DataBank, Inc.Label NameUnit DosePack SizeUnitCase SizeDoseStrengthRouteUnit Price (99999.9999)Quantity ordered (not Vendor repackaged or re-bundled quantity)(999999.9999)Quantity shipped (not Vendor repackaged or re-bundled quantity) (999999.9999)Extension (unit price multiplied by the quantity shipped) EXTENDED PRICE (99999999.999)Type of transaction (MMCAP contract purchase, other contract purchase (340B,PHS), not on contract purchase) 1=contract item, 2=other contract, 3=not on contractBill to Address 1Bill to CityBill to State (2 alpha postal code)Bill to Zip (standard 5-4 format, no dash necessary)Ship to Address 1Ship to CityShip to State (2 alpha postal code)Ship to Zip (standard 5-4 format, no dash necessary)Service Fee (9999.9999)MMCAP Contract Number (MMSxxxxx)

48

Admin fee for not-on-contract items (9999.9999)Credit Indicator (C for credit)

MMCAP Assigned Wholesaler Code (Codes will be assigned to PPV's during implementation period of the contract)Manufacture Name (MFG Name)Class of Trade340b Purchase

49

50

B. Monthly Payment Report. Vendors must be able to supply to the MMCAP Office accurate monthly payment data on or before the 10th day of the second subsequent month (e.g., June’s data will be due July 10th). The first table details the required fields for the Monthly Payment data report and the second table details the required record layout in fixed record format.

MMCAP Payment Data FieldsMMCAP-assigned facility IDMMCAP Facility NameVendor-assigned Account number for the MMCAP FacilityInvoice NumberInvoice Line NumberPurchase Order NumberVendor's (distributor) SKU item number

NDC of purchased product in 5-4-2 format as stored in First DataBank, Inc.Payment Due Date (mmddccyy)Label NamePackaging as associated with NDC NumberDate Payment Credited to Account (mmddccyy)Quantity Purchased-must be expressed in terms of the packaging associated with the NDC (not Vendor repackaged or re-bundled quantity) (999999.9999)Dollar Amount of Transaction-to the third decimal. The dollar amount must be the actual acquisition cost, after any discounts and service fees.Credit Indicator (C for credit)

ID for person making the payment

51

52

C. Kill/Fill Report. Vendor must be able to supply to the MMCAP Office accurate kill/fill data on or before the 10th day of the second subsequent month (e.g., June’s data will be due July 10th). This data must be provided in an Excel format and be submitted electronically to [email protected]. The table details the required fields for the Kill/Fill data report.

Field Long NameMMCAP IDCustomer NamePPV Customer DC NumberCustomer Distribution CenterPPV Customer NumberAddressCityStateNDC of product in 5-4-2 format as stored in First DataBankInvoice NumberInvoice DateShort Reason CodeShort Reason DescriptionProduct Trade NameProduct Generic NamePack QtyPack SizeOrder QuantityShipped QuantityKilled QtyExtended Sales

mailto:[email protected]

D. Contract Change Report. Vendor must be able to supply to the MMCAP Office accurate Contract Change data on or before the first day of each week. This data must be provided in an Excel format (may be zipped) and be submitted electronically to [email protected]. The table details the required fields for the Contract Change Report. This data MUST include the following for every item added to, changed, or deleted from the MMCAP contract:

Long Field Description NameMMCAP Office Assigned PPV NumberContract Start DateContract End DatePharmaceutical Manufacturer Contract NumberVendor Product ID NumberPharmaceutical ManufacturerDescription NDC (11 digit format)PackagingCurrent PricePrevious PriceEffective DateChange Type

E. Contract Audit Report. Vendor must be able to supply to the MMCAP Office accurate contract data on or before the first day of each week. This data must be provided in an Excel format (may be zipped) and be submitted electronically to [email protected]. The table details the required fields for the Contract Audit Report. This data MUST include the following for every item loaded and attached to the MMCAP contract:

Long Field Description NameVendor NameMMCAP Contract NumberProduct Item Unit NumberNDC of product in 5-4-2 format as stored in First DataBankManufacturerItem DescriptionVendor Reference Contract NumberSizeFormUOMMMCAP Contract CostContract Start DateContract End Date

F. Off-contract with Alternative On-contract Report. Vendor must be able to supply to the MMCAP Office accurate Off-contract with Alternative Item On-contract report on or before the 10th day of the subsequent month (e.g., June’s data will be due on or before July 10th). This data must be provided in an Excel format and be submitted electronically to [email protected]. The table details the required fields for the Off-contract with Alternative On-contract Report. This data MUST include the following for every transaction where an MMCAP contract product was available for an off-contract purchase.

Field Long Name

54




MMCAP IDCustomer NamePPV Customer DC NumberCustomer Distribution CenterPPV Customer NumberAddressCityStateNDC of product in 5-4-2 format as stored in First DataBank Off ContractProduct Generic NameProduct Trade NamePack SizeOrder QuantityCostNDC of product in 5-4-2 format On MMCAP contract Product Generic NameProduct Trade NamePack SizeCostDifference in price from off contract to on contract

G. Raw and Adjusted Fill Rate Report. Vendor must be able to supply to the MMCAP Office with a Raw and Adjusted Fill Rate Report. PPV Raw and Adjusted Fill Rate report must be received on or before the 10th day of the subsequent month (e.g., June’s data will be due on or before July 10th). The table details the required fields for the Raw and Adjusted Fill Rate Report. This data must be provided in an Excel format and be delivered electronically to [email protected]. This data MUST include the following fields.

Field Long NameMMCAP IDCustomer NamePPV Customer DC NumberCustomer Distribution CenterPPV Customer NumberAddressCityStateRaw Fill RateAdjusted Fill Rate

H. Vendor Member Listing. Vendor must supply a listing to the MMCAP Office of the MMCAP Participating Facilities attached to the MMCAP contract on or before the 10th day of the subsequent month (e.g., June’s data will be due on or before July 10th). The data must be submitted electronically to [email protected]. The table type and format will be addressed in Addendum #1 to this solicitation.

55



I. Manufacturer Backorders . Vendor will supply to the MMCAP Office, at a minimum, biweekly a listing of all MMCAP contract products backordered due to the manufacturer’s inability to supply the product. The Excel report must be delivered electronically to [email protected] and any other sources MMCAP designates. (e.g., current vendor hosting MMCAP’s web catalog.)

Required MBO Report Fields and Record LayoutProduct DescriptionManufacturer (spelled out, no abbreviations)NDC (11 digit format as defined in First DataBank)Packaging (as associated with NDC)Backorder StatusInformation (short term, long term)Due Date

J. Vendor Reports Available to MMCAP Participating Member Facilities. The following reports must be available in both hard copy and electronic/exportable formats (e.g., Excel). The Vendor may be charged liquidated damages for inaccurate reports that must be adjusted by the MMCAP Office or the MMCAP Participating Facility to ensure accuracy. State which of the listed reports (1-9) will be provided to requesting MMCAP participating facilities. If there is a charge for certain reports, state that cost; MMCAP anticipates there will not be a cost for these reports. Vendor must be able to supply to the MMCAP participating facilities accurate reports with the following information:

1. Monthly, quarterly, and annual reports detailing total purchases (payment amount and units) by individual item (clearly identified via NDC, SKU, vendor, and label name) sorted in both label name and descending dollar order. Units must correspond to the packaging associated with the NDC.

2. Monthly reports listing the purchases of controlled substances and the associated invoice and/or purchase order numbers along with MMCAP Facility name and ID number, NDC number, invoice number, invoice line number, label name, date shipped, amount paid, date payment credited, and DEA number.

3. Velocity report (fastest moving and high dollar) containing forecasted velocity codes with order points and order quantities.

4. Price change report (twice a month), indicating MMCAP contract and not-on-contract items with price changes.

5. Physical inventory reports sorted by AHFS pharmaceutical category and/or alpha generic order. These reports must show the label name, NDC, quantity, cost per unit and the extended cost of the product units on hand.

6. Drug usage (amount paid and units) by American Hospital Formulary Service (AHFS) category. Units must correspond to the packaging associated with the NDC.

7. Daily report of all non-serviced items, delivered or transmitted to the MMCAP Participating Facility the same day it is generated by the same method that the original order was transmitted.

8. Monthly list of discontinued items and new items.9. Any other reports required by law.

7.18 Implementation Period

Schedule and Requirements: Vendor will establish a sixty (60) day implementation schedule, commencing May 1, 2009, for the onset of the distributor contract on July 1, 2009. This plan will detail the phase-in of Vendor’s operations at all of the MMCAP Participating Facilities with a 100% operating level by July 1, 2009, including:

Installation and testing of all electronic ordering equipment Training of employees Bar coding and shelf labeling Price loading of all MMCAP contract products Vendor’s internal inventory preparation and distribution system (prior to implementation period

MMCAP will provide current MMCAP Participating Facilities’ sales and usage data) Vendor’s plan to ensure that stocking and chargeback agreements are in place with all MMCAP-

contracted vendors

56


1. Provide a detailed sixty (60) day implementation plan in timeline chart format, including expected completion dates of tasks and any tasks listed above.

2. What training will be available for each MMCAP Participating Facility? Are there any minimum monthly volume thresholds for certain types of training opportunities?

3. When will the transition for MMCAP Participating Facilities not previously served by the Vendor be completed? Transition means that the new facility will be ready to begin placing and receiving orders even though the contract is not yet available.

Describe how Vendor will provide an inventory of MMCAP contract products sufficient to meet the needs of the MMCAP Participating Facilities from the beginning of the MMCAP [e.g., pharmaceutical] contracting period (biennially July 1). Historical usage data will be provided by MMCAP six weeks prior to the start of the [e.g., pharmaceutical] contract period.

7.19 Business Interruption Plan

Emergency Preparedness and Business Continuity. The Vendor must have in-place an emergency contingency plan for business interruption. Describe Vendor’s business continuity plan.

Include the following:1. A list of all of the Vendor’s distribution centers and alternate distribution centers that are able to distribute

product in each state or region. Make sure to include states with pedigree requirements.2. List the ways to communicate with the MMCAP Participating Facilities in the event of a business

interruption. For instance, if telephone service was unavailable, how would Vendor communicate with an MMCAP Participating Facility?

3. Does Vendor have the capability to develop and ship pre-selected orders, in the event of a national or regional emergency? If so, please describe.

4. Please describe additional measures taken by Vendor to ensure that MMCAP Participating Facilities would continue to receive medications during a regional/national disaster or other unforeseen malfunction in pharmaceutical distribution.

5. Describe Vendor’s experience in responding to natural, technologic, or man-made disasters (e.g., exercise and drills, actual situations, etc.).

7.20 Fees

A. Proposals submitted in responses to this section must be in a separately sealed envelope labeled “Fees/Price Proposal” and must follow the instructions set forth in Section 2. Submission Guidelines outlined in the Instructions section of this RFP.

B. All of the Vendor’s RFP pricing and fee information must be inserted in the Pricing and Fee Matrix Information Worksheet (worksheet can be downloaded from the MMCAP website www.mmcap.org under “Vendors and RFPs” (http://www.mmd.admin.state.mn.us/perlscript/current_rfps.pl) and/or from the MMD website www.mmd.admin.state.mn.us, click on “Solicitation Announcements” and then “Goods and Services Solicitations” (http://www.mmd.admin.state.mn.us/process/admin/postings.asp).

C. Vendor should be aware that payments to lock boxes create problems for many MMCAP Participating Facilities. Also, many MMCAP Participating Facilities are establishing or have established electronic fund transfer (EFT) payment requirements. The EFT payment process, once established, is considered the determinate of timeliness – if the EFT transaction reached the Vendor’s EFT account on time, the payment was on time.

D. Vendor should take all these issues into account when proposing fee schedules and payment requirements. Vendor may be as creative or detailed as they wish; however, there will be no variation permitted within Vendor’s corporation – if the contract indicates “30 days from receipt,” then that is the requirement for each of the Vendor’s distribution centers.

57


http://www.mmd.admin.state.mn.us/



E. The Vendor will pay to the MMCAP Office a quarterly administrative fee on the amount of aggregate product purchases (net of returns and allowances) from Awarded Vendor MMCAP Participating Facilities. Such amount will be payable within sixty (60) days of the close of the quarter in which the fees were earned. Together with such payments the Awarded Vendor will provide a detailed report in a mutually acceptable format substantiating payment.

F. Service Fee Matrix. Describe Vendor’s policy for the Service Fee Matrix outlined on the Pricing and Fee Matrix Information Worksheet. Include the following details, if applicable:

1. On the Pricing and Fee Matrix Information Worksheet, list the complete proposed service fee structure. Include within this fee structure any discounts proposed for promptness of payment and for large volume purchases. Also include all other fees or charges proposed to MMCAP Participating Facilities as indicated. Only fees and charges listed in this proposal will be allowed in any final contract unless specifically negotiated at a later date.

2. All changes to the MMCAP Service Fee Matrix will be communicated to the MMCAP Office in writing with a minimum of five (5) business days notice.

3. Vendor service fees may only change on a quarterly or less frequent basis.4. Vendor service fees must be provided to MMCAP on a quarterly basis in an Excel spreadsheet, delivered

electronically to [email protected]. Service fee reports should list the MMCAP Participating Facility, Vendor account number, address, city, state, zip, service fee, and any other information used to calculate the service fee.

G. Volume Incentive. Propose a Total MMCAP Volume Incentive on the Pricing and Fee Matrix Information Worksheet which is based on the annualized aggregated purchases of MMCAP Members utilizing Vendor as their wholesaler. Please note, it is likely that Volume Incentive will be renegotiated after MMCAP Members make their Vendor selection.

58

8. Check List of Required Documents Making Up the Complete Proposal

1. Statement of Work -- Prime Vendor Requirements

2. Additional Required Documents

Responder’s Experience

Sample Contract Provisions and Exceptions to Contract Terms and Conditions

Certification Regarding Lobbying

Affidavit of Noncollusion

Affirmative Action Certification

Location of Service Disclosure and Certification

Immigration Status Certification

Taxpayer Identification

Preference to Targeted Group & Economically Disadvantaged Businesses & Individuals

Conflicts of Interest Disclosure & Acknowledgment

3. Fees/Price Proposal – Must be in separately sealed envelope

Responder must NOT modify the RFP questions, charts, or forms in its proposal. The proposal must strictly follow the RFP order. In the event the MMCAP Office discovers any modifications to the questions, charts, or forms, the proposal may be rejected. In the event a Responder has a question about any part of the RFP, it must submit a request for clarification according to Section 1.6 above.

59

9. Responder’s Experience

9.1 Responder’s Experience

The awarded Responders must have at least five (5) full consecutive years experience as a pharmaceutical distributor.

Provide the number of Responder’s consecutive years of business ______________.

9.2 Responder’s References Provide a list of top clients, determined by a combination of volume and sales, for whom similar services, as detailed in this RFP, have been provided during the past three (3) years.

Customer Customer 1 Customer 2 Customer 3 Customer 4 Customer 5

Customer Name*

Dates of Service*

Name of Contact Person*

Title of Contact Person*

Telephone Number of Contact Person*

* Answer is required. If desired, the Responder may include additional relevant company experience.

9.3 Terminations or Contract Cancellations

Provide a list of any services that have been terminated by any client(s) in the past three 3 years and the reason(s) for termination.

List any client initiated terminations and explanations:

9.4 ReferencesProvide three (3) corporate references for services similar to those in this RFP that were performed in the past three (3) years.

Reference Reference 1 Reference 2 Reference 3

Corporate Reference Name*

Dates of Service*

Name of Contact Person*

Title of Contact Person*

Telephone Number of Contact Person*

* Answer is required. f you have additional references that you wish to include, please submit them as Supplementary Information.

60

9.5 Business Litigation

Disclose any involvement by the Responder or any officer or principal in any business litigation within the last five (5) years which may have a material impact or effect on the services requested in this RFP.

List any litigation, include an explanation, current status or final disposition:

9.6 Financial Statements

Provide financial statements for the three most recent fiscal years.

61

10. Contract Provisions

10.1 Exceptions to Contract Terms and Conditions

Instructions: Please check the appropriate statement. If you take exception to any of the terms, conditions or language in the Contract Terms and Conditions (10.2 below), you must indicate those exceptions in your response to the RFP; certain exceptions may result in your proposal being disqualified from further review and evaluation. Only those exceptions indicated in your response to the RFP will be available for discussion or negotiation.

_____ Responder has no exceptions to the Contract Terms and Conditions.

_____ Responder has exceptions to the Contract Terms and Conditions. Cite the section heading(s), describe in detail your exception, and provide suggested alternative language.

62

10.2 Contract Terms and Conditions

Responders awarded contracts will be required to execute MMCAP’s contract. Much of the language reflects requirements of Minnesota law. All Minnesota Statutes and Minnesota Rules referenced in this solicitation are available on line at: http://www.leg.state.mn.us/leg/statutes.htmBelow are clauses from MMCAP’s standard contract. Exceptions taken to any of the terms, conditions, or language in the contract, must be clearly documented and included on a separate diskette in Microsoft Word.

Do not attach your boilerplate contract. Any exceptions must be clearly written identified and include suggested alternative language. Taking exception to the entire contract may result in the rejection of the proposal. Numerous and/or onerous exceptions that contradict Minnesota law may result in your proposal being disqualified from further review and evaluation. Only those exceptions indicated in your proposal to the RFP will be available for discussion or negotiation. RESPONDERS ARE CAUTIONED THAT BY TAKING ANY EXCEPTION THEY MAY BE MATERIALLY DEVIATING FROM THE REQUEST FOR PROPOSAL. IF A RESPONDER MATERIALLY DEVIATES FROM THE STANDARD CONTRACT LANGUAGE ITS RESPONSE MAY BE REJECTED. A material deviation is an exception that:

a. Gives the Responder taking the exception a competitive advantage over other vendors, or b. Gives the State something significantly different from that which the State requested.

1 Term of Contract. Effective date: July 1, 2009, or the date the State obtains all required signatures under Minnesota Statutes Section 16C.05, subdivision 2, whichever is later. The Contractor must not begin work under this contract until this contract is fully executed and the Contractor has been notified by the State’s Authorized Representative to begin the work.Expiration date: June 30, 2011, or until all obligations have been satisfactorily fulfilled, whichever occurs first. The contract may be extended for up to three additional one-year periods for a total term not to exceed five years.

2 Assignment. The Contractor may neither assign nor transfer any rights or obligations underthis contract without the prior consent of the State and a fully executed Assignment Agreement,executed and approved by the same parties who executed and approved this contract, or their successors in office.

3 Amendments. Any amendment to this contract must be in writing and will not be effective until it has been executed and approved by the same parties who executed and approved the original contract, or their successors in office.

4 Waiver. If the State fails to enforce any provision of this contract, that failure does not waive the provision or its right to enforce it.

5 Contract Complete. This contract contains all negotiations and agreements between the State and the Contractor. No other understanding regarding this contract, whether written or oral, may be used to bind either party.

6 Liability. The Contractor must indemnify, save, and hold the State, its agents, and employees harmless from any claims or causes of action, including attorney’s fees incurred by the State, arising from the performance of this contract by the Contractor or the Contractor's agents or employees. This clause will not be construed to bar any legal remedies the Contractor may have for the State's failure to fulfill its obligations under this contract. [Note: The State of Minnesota is Constitutionally prohibited from indemnification.]

7 Audits. 7.1 Under Minnesota Statutes Section 16C.05, subdivision 5, the Contractor’s books, records, documents, and accounting procedures and practices relevant to this contract are subject to examination by the State and/or the State Auditor or Legislative Auditor, as appropriate, for a minimum of six years from the end of this contract.7.2 Vendor must agree that the MMCAP Office and any MMCAP Participating Facility it serves have the right to audit Vendor to determine the validity of invoice pricing. Audits may be conducted by representatives of the State of Minnesota in collaboration with other state and federal authorities.

63

8 Government Data Practices. The Contractor and State must comply with the Minnesota Government Data Practices Act, Minn. Stat. Ch. 13, (or, if the State contracting party is part of the judicial branch, with the Rules of Public Access to Records of the Judicial Branch promulgated by the Minnesota Supreme Court as the same may be amended from time to time) as it applies to all data provided by the State under this contract, and as it applies to all data created, collected, received, stored, used, maintained, or disseminated by the Contractor under this contract. The civil remedies of Minn. Stat. § 13.08 apply to the release of the data governed by the Minnesota Government Practices Act, Minn. Stat. Ch. 13, by either the Contractor or the State.

If the Contractor receives a request to release the data referred to in this Clause, the Contractor must immediately notify the State. The State will give the Contractor instructions concerning the release of the data to the requesting party before the data is released.

9 Intellectual Property. (A) Intellectual Property Rights. The State owns all rights, title, and interest in all of the intellectual property rights,

including copyrights, patents, trade secrets, trademarks, and service marks in the Works and Documents created and paid for under this contract. Works means all inventions, improvements, discoveries (whether or not patentable), databases, computer programs, reports, notes, studies, photographs, negatives, designs, drawings, specifications, materials, tapes, and disks conceived, reduced to practice, created or originated by the Contractor, its employees, agents, and subcontractors, either individually or jointly with others in the performance of this contract. Works includes “Documents.” Documents are the originals of any databases, computer programs, reports, notes, studies, photographs, negatives, designs, drawings, specifications, materials, tapes, disks, or other materials, whether in tangible or electronic forms, prepared by the Contractor, its employees, agents, or subcontractors, in the performance of this contract. The Documents will be the exclusive property of the State and all such Documents must be immediately returned to the State by the Contractor upon completion or cancellation of this contract. To the extent possible, those Works eligible for copyright protection under the United States Copyright Act will be deemed to be “works made for hire.” The Contractor assigns all right, title, and interest it may have in the Works and the Documents to the State. The Contractor must, at the request of the State, execute all papers and perform all other acts necessary to transfer or record the State’s ownership interest in the Works and Documents.

(B) Obligationsa. Notification. Whenever any invention, improvement, or discovery (whether or not patentable) is made or

conceived for the first time or actually or constructively reduced to practice by the Contractor, including its employees and subcontractors, in the performance of this contract, the Contractor will immediately give the State’s Authorized Representative written notice thereof, and must promptly furnish the Authorized Representative with complete information and/or disclosure thereon.

b. Representation. The Contractor must perform all acts, and take all steps necessary to ensure that all intellectual property rights in the Works and Documents are the sole property of the State, and that neither Contractor nor its employees, agents, or subcontractors retain any interest in and to the Works and Documents. The Contractor represents and warrants that the Works and Documents do not and will not infringe upon any intellectual property rights of other persons or entities. Notwithstanding Clause 8, the Contractor will indemnify; defend, to the extent permitted by the Attorney General; and hold harmless the State, at the Contractor’s expense, from any action or claim brought against the State to the extent that it is based on a claim that all or part of the Works or Documents infringe upon the intellectual property rights of others. The Contractor will be responsible for payment of any and all such claims, demands, obligations, liabilities, costs, and damages, including but not limited to, attorney fees. If such a claim or action arises, or in the Contractor’s or the State’s opinion is likely to arise, the Contractor must, at the State’s discretion, either procure for the State the right or license to use the intellectual property rights at issue or replace or modify the allegedly infringing Works or Documents as necessary and appropriate to obviate the infringement claim. This remedy of the State will be in addition to and not exclusive of other remedies provided by law.

10 Workers’ Compensation and Other Insurance. Contractor certifies that it is in compliance with all insurance requirements specified in the solicitation document relevant to this Contract. Contractor will not commence work under the contract until they have obtained all the insurance specified in the solicitation document. Contractor will maintain such insurance in force and effect throughout the term of the contract. Further, the Contractor certifies that it is in compliance with Minnesota Statutes 176.181, subdivision 2, pertaining to workers’ compensation insurance coverage. The

64

Contractor’s employees and agents will not be considered State employees. Any claims that may arise under the Minnesota Workers’ Compensation Act on behalf of these employees or agents and any claims made by any third party as a consequence of any act or omission on the part of these employees or agents are in no way the State’s obligation or responsibility.

11 Publicity and Endorsement. 11.1 Publicity. Any publicity regarding the subject matter of this contract must identify the State as the

sponsoring agency and must not be released without prior written approval from the State’s Authorized Representative. For purposes of this provision, publicity includes notices, informational pamphlets, press releases, research, reports, signs, and similar public notices prepared by or for the Contractor individually or jointly with others, or any subcontractors, with respect to the program, publications, or services provided resulting from this contract.

11.2 Endorsement. The Contractor must not claim that the State endorses its products or services.

12 Governing Law, Jurisdiction, and Venue. Minnesota law, without regard to its choice-of-law provisions, governs this contract. Venue for all legal proceedings out of this contract, or its breach, must be in the appropriate state or federal court with competent jurisdiction in Ramsey County, Minnesota.

13 Data Disclosure. Under Minnesota Statutes Section 270C.65, subdivision 3 and other applicable law, the Contractor consents to disclosure of its social security number, federal employer tax identification number, and/or Minnesota tax identification number, already provided to the State, to federal and state agencies and state personnel involved in the payment of state obligations. These identification numbers may be used in the enforcement of federal and state laws which could result in action requiring the Contractor to file state tax returns, pay delinquent state tax liabilities, if any, or pay other state liabilities.

14 Termination.14.1 Termination by the State. The State or commissioner of Administration may cancel this contract at any

time, with or without cause, upon 30 days’ written notice to the Contractor. Upon termination, the Contractor will be entitled to payment, determined on a pro rata basis, for services satisfactorily performed.

14.2 Termination for Insufficient Funding. The State may immediately terminate this contract if it does not obtain funding from the Minnesota Legislature, or other funding source; or if funding cannot be continued at a level sufficient to allow for the payment of the services covered here. Termination must be by written or fax notice to the Contractor. The State is not obligated to pay for any services that are provided after notice and effective date of termination. However, the Contractor will be entitled to payment, determined on a pro rata basis, for services satisfactorily performed to the extent that funds are available. The State will not be assessed any penalty if the contract is terminated because of the decision of the Minnesota Legislature, or other funding source, not to appropriate funds. The State must provide the Contractor notice of the lack of funding within a reasonable time of the State’s receiving that notice.

15 Minnesota Statutes Section 181.59. The vendor will comply with the provisions of Minnesota Statutes Section 181.59 which requires:

Every contract for or on behalf of the state of Minnesota, or any county, city, town, township, school, school district, or any other district in the state, for materials, supplies, or construction will contain provisions by which the contractor agrees: (1) That, in the hiring of common or skilled labor for the performance of any work under any contract, or any subcontract, no contractor, material supplier, or vendor, will, by reason of race, creed, or color, discriminate against the person or persons who are citizens of the United States or resident aliens who are qualified and available to perform the work to which the employment relates; (2) That no contractor, material supplier, or vendor, will, in any manner, discriminate against, or intimidate, or prevent the employment of any person or persons identified in clause (1) of this section, or on being hired, prevent, or conspire to prevent, the person or persons from the performance of work under any contract on account of race, creed, or color; (3) That a violation of this section is a misdemeanor; and (4) That this contract may be canceled or terminated by the state, county, city, town, school board, or any other person authorized to grant the contracts for employment, and all money due, or to become due under the contract, may be forfeited for a second or any subsequent violation of the terms or conditions of this contract.

65

16 Affirmative Action Requirements for Contracts in Excess of $100,000 and if the Contractor has More than 40 Full-time Employees in Minnesota or its Principal Place of Business. The State intends to carry out its responsibility for requiring affirmative action by its Contractors.

16.1 Covered Contracts and Contractors. If the Contract exceeds $100,000 and the contractor employed more than 40 full-time employees on a single working day during the previous 12 months in Minnesota or in the state where it has its principle place of business, then the Contractor must comply with the requirements of Minnesota Statutes Section 363A.36 and Minnesota Rules Parts 5000.3400-5000.3600. A contractor covered by Minnesota Statutes Section 363A.36 because it employed more than 40 full-time employees in another state and does not have a certificate of compliance, must certify that it is in compliance with federal affirmative action requirements.

16.2 Minnesota Statutes Section 363A.36. This statute requires the Contractor to have an affirmative action plan for the employment of minority persons, women, and qualified disabled individuals approved by the Minnesota Commissioner of Human Rights (“Commissioner”) as indicated by a certificate of compliance. The law addresses suspension or revocation of a certificate of compliance and contract consequences in that event. A contract awarded without a certificate of compliance may be voided.

16.3 Minnesota Rules 5000.3400-5000.3600. (A) General. Minnesota Rules 5000.3400-5000.3600 implement Minnesota Statutes Section

363A.36. These rules include, but are not limited to, criteria for contents, approval, and implementation of affirmative action plans; procedures for issuing certificates of compliance and criteria for determining a contractor’s compliance status; procedures for addressing deficiencies, sanctions, and notice and hearing; annual compliance reports; procedures for compliance review; and contract consequences for non-compliance. The specific criteria for approval or rejection of an affirmative action plan are contained in various provisions of Minnesota Rules 5000.3400-5000.3600 including, but not limited to, parts 5000.3420-5000.3500 and 5000.3552-5000.3559.

(B) Disabled Workers. The Contractor must comply with the following affirmative action requirements for disabled workers.

1. The Contractor must not discriminate against any employee or applicant for employment because of physical or mental disability in regard to any position for which the employee or applicant for employment is qualified. The Contractor agrees to take affirmative action to employ, advance in employment, and otherwise treat qualified disabled persons without discrimination based upon their physical or mental disability in all employment practices such as the following: employment, upgrading, demotion or transfer, recruitment, advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship.

2. The Contractor agrees to comply with the rules and relevant orders of the Minnesota Department of Human Rights issued pursuant to the Minnesota Human Rights Act.

3. In the event of the Contractor's noncompliance with the requirements of this clause, actions for noncompliance may be taken in accordance with Minnesota Statutes Section 363A.36, and the rules and relevant orders of the Minnesota Department of Human Rights issued pursuant to the Minnesota Human Rights Act.

4. The Contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices in a form to be prescribed by the commissioner of the Minnesota Department of Human Rights. Such notices must state the Contractor's obligation under the law to take affirmative action to employ and advance in employment qualified disabled employees and applicants for employment, and the rights of applicants and employees.

5. The Contractor must notify each labor union or representative of workers with which it has a collective bargaining agreement or other contract understanding, that the contractor is bound by the terms of Minnesota Statutes Section 363A.36, of the Minnesota Human Rights Act and is committed to take affirmative action to employ and advance in employment physically and mentally disabled persons.

(C) Consequences. The consequences for the Contractor’s failure to implement its affirmative action plan or make a good faith effort to do so include, but are not limited to, suspension or revocation of a certificate of compliance by the Commissioner, refusal by the Commissioner to approve subsequent plans, and termination of all or part of this contract by the Commissioner or the State.

(D) Certification. The Contractor hereby certifies that it is in compliance with the requirements of Minnesota Statutes Section 363A.36 and Minnesota Rules 5000.3400-5000.3600 and is aware of the consequences for noncompliance.

66

17 Foreign Outsourcing. Contractor agrees that the disclosures and certifications made in its Location of Service Disclosure and Certification Form submitted with its proposal are true, accurate and incorporated into this contract by reference.

18 Employee Status. By order of the Governor’s Executive Order 08-01, if this contract, including any extension options, is or could be in excess of $50,000, Contractor certifies that it and its subcontractors:A. Comply with the Immigration Reform and Control Act of 1986 (U.S.C. 1101 et. seq.) in relation to all employees performing work in the United States and do not knowingly employ persons in violation of the United States’ immigrations laws; andB. By the date of the performance of services under this contract, Contractor and all its subcontractors have implemented or are in the process of implementing the E-Verify program for all newly hired employees in the United States who will perform work on behalf of the State of Minnesota.

Contractor will obtain certifications of compliance with this section from all subcontractors who will participate in the performance of this contract. Subcontractor certifications will be maintained by Contractor and made available to the state upon request. If Contractor or its subcontractors are not in compliance with 1 or 2 above or have not begun or implemented the E-Verify program for all newly hired employees performing work under the contract, the state reserves the right to determine what action it may take including but not limited to, cancelling the contract and/or suspending or debarring the contractor from state purchasing.

19 Purchasing Cards. Vendors will accept a purchasing card for order placement, in addition to accepting a purchase order, without passing the processing fees for the purchasing card back to the State.

20 Contingency Fees Prohibited. Pursuant to Minnesota Statutes Section 10A.06, no person may act as or employ a lobbyist for compensation that is dependent upon the result or outcome of any legislation or administrative action.

21 Risk of Loss or Damage. The MMCAP Participating Facility will be relieved of all risks of loss or damage to the goods and/or equipment during periods of transportation, installation, and during the entire time the goods and/or equipment are in possession of the MMCAP Participating Facility, unless and until such time as unencumbered title is vested in the MMCAP Participating Facility and the goods and/or equipment are in exclusive possession of the MMCAP Participating Facility.

22 Jurisdiction and Venue. The Contract, its amendments and supplements thereto, will be governed by the laws of the State of Minnesota, USA. Venue for all legal proceedings arising out of the Contract, or breach thereof, will be in the State or federal court with competent jurisdiction in Ramsey County, Minnesota.

23 Force Majeure. Neither party hereto will be considered in default in the performance of its obligations hereunder to the extent that performance of any such obligations is prevented or delayed by acts of God, war, riot or other catastrophes beyond the reasonable control of the party unless the act or occurrence could have been reasonably foreseen and reasonable action could have been taken to prevent the delay or failure to perform. A party defaulting under this provision must provide the other party prompt written notice of the default and take all necessary steps to bring about performance as soon as practicable.

24 Default. A MMCAP Participating Facility’s purchase order constitutes a binding Contract. All commodities furnished will be subject to inspection and acceptance by the ordering entity after delivery. No substitutions or cancellations are permitted without written approval of the MMCAP Participating Facility contracting agency. Back orders, failure to meet delivery requirements, or failures to meet specifications in the purchase order and/or the Contract authorizes the ordering entity to cancel the Contract or purchase order, or any portion of it, purchase elsewhere, and charge the full increase in cost and administrative handling to the defaulting PPV. In the event of default, the State and the MMCAP Participating Facility reserves the right to pursue any other remedy available by law. A Contract Vendor may be removed from the vendors list, suspended or debarred from receiving a Contract for failure to comply with terms and conditions of the Contract, or for failure to pay the State or the MMCAP Participating Facility for the cost incurred on the defaulted Contract.

67

25 Notices. If one party is required to give notice to the other under the Contract, such notice will be in writing and will be effective upon receipt. Delivery may be by certified United States mail or by hand, in which case a signed receipt will be obtained. A facsimile transmission will constitute sufficient notice, provided the receipt of the transmission is confirmed by the receiving party. Either party must notify the other of a change in address for notification purposes. All notices to the State will be addressed as follows:

MMCAP Manager Vendor50 Sherburne Avenue, Suite 112 Address hereSt. Paul, MN 55155Fax: 651.297.3996E-mail: [email protected]

26 Contract Use and Participating Addenda. The State intends to use this Contract to meet the needs of its MMCAP Members and MMCAP Participating Facilities for goods and services purchased under the authority of the commissioner of Administration. From time to time an MMCAP Member or MMCAP Participating Facility may request that the PPV prepare a “Participating Addendum” (also called “Piggyback Agreement”) to amend this Contract to provide for laws specific to a state or local jurisdiction. If these circumstances exist, the PPV must work with the MMCAP Member or MMCAP Participating Facility to prepare a Participating Addendum to set forth the additional or altered terms and conditions. A Participating Addendum must clearly apply only to the requesting location and will not affect the rights of the other MMCAP Members or MMCAP Participating Facilities. When the specific terms are agreeable to the PPV and the MMCAP Member or MMCAP Participating Facility, the amendment will be presented to MMCAP to be included as an amendment to this contract. No verbal or written instructions from MMCAP Members, MMCAP Participating Facilities, or any of their staff or officials to change any provision of the resulting contract will be accepted by the Vendor without the prior written approval of the MMCAP. The Vendor will immediately report any such requests to the MMCAP Manager who will issue approval or denial in writing.

27 Copyrighted Material Waiver. The State reserves the right to use, reproduce and publish proposals in any manner necessary for State agencies and local units of government to access the responses, including but not limited to photocopying, State Intranet/Internet postings, broadcast faxing, and direct mailing. In the event that the response contains copyrighted or trademarked materials, it is the responder’s responsibility to obtain permission for the State to reproduce and publish the information, regardless of whether the responder is the manufacturer or reseller of the products listed in the materials. By signing its response, the responder certifies that it has obtained all necessary approvals for the reproduction and/or distribution of the contents of its response and agrees to indemnify, protect, save and hold the State, its representatives and employees harmless from any and all claims arising from the violation of this section and agrees to pay all legal fees incurred by the State in the defense of any such action.

28 Severability. If any provision of the Contract, including items incorporated by reference, is found to be illegal, unenforceable, or void, then both the State and the Contract Vendor will be relieved of all obligations arising under such provisions. If the remainder of the Contract is capable of performance it will not be affected by such declaration or finding and will be fully performed.

29 Survivability. The following rights and duties of the State and responder will survive the expiration or cancellation of the resulting Contract(s). These rights and duties include, but are not limited to paragraphs: To Be Determined.

30 Performance While Dispute is Pending. Notwithstanding the existence of a dispute, the parties will continue without delay to carry out all of their responsibilities under the Contract that are not affected by the dispute. If a party fails to continue without delay to perform its responsibilities under the Contract, in the accomplishment of all undisputed work, any additional cost incurred by the other parties as a result of such failure to proceed will be borne by the responsible party.

31 Dispute Resolution.Vendor must agree to handle dispute resolution for unresolved issues using the following policy. An MMCAP Participating Facility may change its PPV even if the rest of the MMCAP Participating Facility’s state does not wish to change its PPV.

68

A. Notification: Either the MMCAP Participating Facility or Vendor may decide that escalation is desirable when resolution of an issue appears irresolvable at the current management level. Either dissatisfied party may contact the MMCAP Office and/or the Vendor’s MMCAP Representative after good faith attempts by both Parties to resolve the issue.

B. Documentation: Both the MMCAP Participating Facility and the Vendor will jointly develop a short briefing document that describes the issue(s), relevant impact, and positions of both parties. The briefing document must be sent by the Vendor to the MMCAP Office, the MMCAP Participating Facility, and the Vendor’s MMCAP Primary Account Representative.

C. Cure Period: The Vendor will have a reasonable amount of time to cure the issue. A teleconference will be scheduled with the MMCAP Office and the Vendor’s MMCAP Primary Account Representative to review the briefing document and develop a proposed resolution and plan of action. The plan and timeline must be agreed to by all parties – the MMCAP Office, the MMCAP Participating Facility, and Vendor.

D. Cancellation: If a reasonable amount of time, at MMCAP’s sole discretion, has elapsed without resolution (in no case later than sixty (60) days from the date of agreed upon resolution) or if ether the MMCAP Participating Facility or the Vendor believe that resolution is not possible under this process the MMCAP Participating Facility or the Vendor can choose to cancel service. In the event of such a cancellation, the Vendor will be entitled to payment, determined on a pro rata basis, for work or services satisfactorily performed or products supplied through the cancellation date.

E. Performance while Dispute is Pending. Notwithstanding the existence of a dispute, except as set forth in Section 25 of this contract, the Vendor must continue without delay to carry out all of their responsibilities under the contract that are not affected by the dispute. If the Vendor fails to continue without delay to perform its responsibilities under the contract, in the accomplishment of all undisputed work, any additional costs incurred by MMCAP and/or MMCAP members as a result of such failure to proceed must be borne by the Vendor.

32 Intellectual Property Indemnification. The Contract Vendor warrants that any materials or products provided or produced by the Contract Vendor or utilized by the Contract Vendor in the performance of this Contract will not infringe upon or violate any patent, copyright, trade secret, or any other proprietary right of any third party. In the event of any such claim by any third party against the State, the State will promptly notify the Contract Vendor. The Contract Vendor, at its own expense, will indemnify; defend to the extent permitted by the Minnesota Attorney General's Office, and hold harmless the State against any loss, cost, expense, or liability (including legal fees) arising out of such a claim, whether or not such claim is successful against the State.

If such a claim has occurred, or in the Contract Vendor's opinion is likely to occur, the Contract Vendor will either procure for the State the right to continue using the materials or products or replacement or modified materials or products. If an option satisfactory to the State is not reasonably available, the State will return the materials or products to the Contract Vendor, upon written request of the Contract Vendor and at the Contract Vendor’s expense. This remedy is in addition to any other remedy provided by law.

33 Insurance Requirements. The Contractor will not commence work under the Contract until they have obtained all the insurance described below and the State of Minnesota has approved such insurance. Contractors under this Contract can provide applicable services to the State of Minnesota and/or MMCAP Participating Facilities, hereinafter referred to as Owner. All policies and certificates will provide that the policies will remain in force and effect throughout the term of the Contract. Contractor’s policy(ies) will be primary insurance to any other valid and collectible insurance available to the State of Minnesota with respect to any claim arising out of this Contract. Contractor will provide the State of Minnesota with thirty (30) days’ advance written notice of cancellations, non-renewals or reduction in limits or coverage or other material change. Contractor is responsible for payment of Contract related insurance premiums and deductibles. If Contractor is self-insured, a Certificate of Self-Insurance must be attached. The insurance companies used must have an “AM Best” rating of A- (minus), Financial Size Category (FSC) VII or better, and be authorized to do business in the state of Minnesota.NOTICE TO CONTRACTORS:

69

The failure of the State of Minnesota to obtain Certificate of Insurance, for the policies required under this Contract or renewals thereof, will not constitute a waiver by the Owner to the Contractor to provide such insurance.The Owner will reserve the right to immediately terminate the Contract if the Contractor is not in compliance with the insurance requirements and the Owner retains all rights to pursue any legal remedies against the Contractor. All insurance policies must be open to inspection by the state, and copies of policies must be submitted to state’s authorized agent upon written request. Notice to Insurer:The Contractor’s insurance company waives its right to assert the immunity of the State as a defense to any claims made under said insurance. POLICY REQUIREMENTS1. Workers’ Compensation Insurance:

A. Statutory Compensation Coverage. If Minnesota Statutes Section176.041 exempts the Contractor from Workers’ Compensation insurance or if the Contractor has no employees in the State of Minnesota, the Contractor must provide a written statement, signed by the authorized signer of the Contract, stating the qualifying exemption that excluded the Contractor from MN Workers’ Compensation requirements.If during the course of the Contract the Contractor becomes eligible for Workers’ Compensation, the Contractor must comply with the Workers’ Compensation Insurance requirements included herein and provide the State of Minnesota with a certificate of insurance.B. Coverage B Employer’s Liability with limits of not less than:

$100,000 Bodily Injury by Disease per Employee $500,000 Bodily Injury by Disease Aggregate $100,000 Bodily Injury by Accident

Evidence of subcontractor insurance will be filed with the Contractor.2. Automobile Liability Insurance:

A. Minimum Limits of Liability: $2,000,000 - Per Occurrence Bodily Injury and Property Damage Combined Single Limit

B. Coverages: Owned Automobile Non-owned Automobile Hired AutomobileOwner named as an Additional Insured

The Contractor and its subcontractors, if any, will maintain insurance to cover liability arising out of the operations, use, or maintenance of all owned, non-owned and hired automobiles.Evidence of subcontractor insurance will be filed with the Contractor.3. General Liability Insurance:

A. Minimum Limits of Liability: $2,000,000 - Per Occurrence $2,000,000 - Annual Aggregate $2,000,000 - Annual Aggregate applying to Products/Completed Operations

B. Coverages: Premises and Operations Bodily Injury and Property Damage Personal & Advertising Injury Blanket Contractual Products and Completed Operations State of Minnesota named as an Additional Insured

The Contractor will maintain insurance to cover claims which may arise from operations under this Contract, whether such operations are by Contractor or Subcontractor or by anyone directly or indirectly employed under this Contract. 4. Professional/Technical, Errors and Omissions, and/or Miscellaneous Liability Insurance (if applicable). The Contractor will be required to carry the following minimum amounts:

$2,000,000 per claim or event$2,000,000 annual aggregate

Any deductible will be the sole responsibility of the Contractor and may not exceed $10,000 without the written approval of the State of Minnesota.

70

This policy will provide coverage for all claims the Contractor may become legally obligated to pay resulting from any actual or alleged negligent acts, errors, or omissions related to the Contractor’s professional services required under the Contract.If the policy is a claims-made form, it will include the following language:The retroactive or prior acts date of such coverage will not be after the effective date of this Contract and include an extended discovery provision of three (3) years following completion of the work

34 Adding New Members. If new Members are added to the MMCAP Program and will participate in MMCAP’s Prime Vendor Program, the new Member will select a PPV to service the all Participating Facilities within the Member. In the event one or more facilities are currently using another PPV a reasonable period of time will be permitted for the Participating Facility to switch to the MMCAP-contracted PPV.

35 Taxpayer Identification Form. Under Minnesota Statutes Section 270C.65, and other applicable law, the Responder must consent to disclosure its social security number, federal employer tax identification number, and/or Minnesota tax identification number, already provided to the State, to federal and state agencies and state personnel involved in the payment of state obligations. These numbers will be available to federal and State tax authorities and MMCAP personnel involved in the payment of MMCAP obligations.

36 Required Licenses, Permits, and Registration. Responders must have in place prior to the start of the contract, and must maintain for the life of the contract, all current licenses, permits and registrations required by state, local and federal agencies. Vendors must make such documentation available upon request by the MMCAP Office.

37 DEA License/HIN. The Vendor must not require an MMCAP Participating Facility to have a DEA number in order to obtain products unless the facility places orders for controlled substances. MMCAP Participating Facilities will have HIN numbers assigned by the MMCAP Office.

38 Product Expiration Dating At a minimum, expiration dating of all products delivered under this contract must have a minimum shelf life of six (6) months expiration dating remaining upon delivery to the MMCAP Participating Facilities. Shipment of product with expiration dating of less than 6 months requires the prior approval of the MMCAP Participating Facility before release and delivery of the order.

39 Shareback Obligation. Vendor must agree to manage, at no additional cost to the MMCAP Office or the MMCAP Participating Facilities, the MMCAP annual shareback obligation (“credit”). The MMCAP Office will provide the Vendor with a list of MMCAP Participating Facilities receiving a shareback credit, the shareback credit amount for each facility, and a check or EFT for the total amount of all shareback credits to be provided. Vendor must apply the shareback credit to all listed MMCAP Participating Facilities within 15 business days of the receipt of the funds. Within 30 business days of the receipt of the funds, Vendor must provide the MMCAP Office with a listing of the invoice or credit memo numbers for each MMCAP Participating Facility for which the credit was applied.

40 Fees. Vendor must agree that all changes to the MMCAP Service Fee Matrix will be communicated to the MMCAP Office in writing with a minimum of five business days notice. Vendor service fees may only change on a quarterly or less frequent basis.

41 Additional Fees. Vendor must agree to not add any fee, percentage, or other cost to the products purchased under the MMCAP contract unless the fee, percentage, or cost is defined and approved in writing by MMCAP in the contract or by amendment to the contract.

41.2 Payment(A) Retainage. If applicable, under Minnesota Statutes Section 16C.08, subdivision 5(b), no more than 90% of

the amount due under this contract may be paid until the final product of this contract has been reviewed by the State’s agency head. The balance due will be paid when the State’s agency head determines that the Vendor has satisfactorily fulfilled all the terms of this contract. If applicable, as required by Minn. Stat. § 16A.1245, the prime Vendor must pay all authorized Vendor subcontractors, less any retainage, within ten (10) calendar days of the prime Vendor's receipt of payment from the State for undisputed services provided by the Vendor(s) subcontractors and must pay interest at the rate of one and one-half percent per month or

71

any part of a month to the Vendors subcontractors on any undisputed amount not paid on time to the Vendor(s) subcontractors.

(B) Federal funds. (Where applicable, if blank this section does not apply) Payments under this contract will be made from federal funds obtained by the State through Title ______ CFDA number _________ of the __________ Act of _____. The Vendor is responsible for compliance with all federal requirements imposed on these funds and accepts full financial responsibility for any requirements imposed by the Vendor’s failure to comply with federal requirements.

42 Conditions of Payment. All services provided by the Contractor under this contract must be performed to the State’s satisfaction, as determined at the sole discretion of the State’s Authorized Representative and in accordance with all applicable federal, state, and local laws, ordinances, rules, and regulations. The Contractor will not receive payment for work found by the State to be unsatisfactory or performed in violation of federal, state, or local law.43 Payments to Subcontractors. (If applicable) As required by Minn. Stat. § 16A.1245, the prime contractor must pay all subcontractors, less any retainage, within 10 calendar days of the prime Contractor's receipt of payment from the State or MMCAP Participating Facility for undisputed services provided by the subcontractor(s) and must pay interest at the rate of one and one-half percent per month or any part of a month to the subcontractor(s) on any undisputed amount not paid on time to the subcontractor(s).44 Authorized Representatives. The State's Authorized Representative is The MMCAP Manager or his/her successor, and has the responsibility to monitor the Contractor’s performance and the authority to accept the services provided under this contract. If the services are satisfactory, the State's Authorized Representative will certify acceptance on each invoice submitted for payment. The Contractor's Authorized Representative is ________, or his/her successor. If the Contractor’s Authorized Representative changes at any time during this contract, the Contractor must immediately notify the State.45 Administrative Personnel Changes. The Vendor must notify the MMCAP Office of changes in the Vendor’s key administrative personnel, in advance and in writing. Any employee of Vendor, who, in the opinion of MMCAP, is unacceptable, will be removed from the project upon written notice to the Vendor. In the event that an employee is removed pursuant to a written request from MMCAP’s authorized representative, the Vendor will have ten (10) working days in which to fill the vacancy with an acceptable employee.46 Transportation. All prices must be FOB Destination, prepaid and allowed (with freight included in the price), from the MMCAP Participating Facilities receiving dock or pharmacy unless otherwise stated in the SOW. Price reductions must be passed on immediately to MMCAP Office and the MMCAP Participating Facilities whenever they become effective.47 Time. The Contractor must comply with all the time requirements described in this contract. In the performance of this contract, time is of the essence.48 Default and Liquidated Damages. Default Either of the following constitutes cause to declare the contract or any order under this contract in default: (a) Nonperformance of contractual requirements; or (b) A material breach of any term or condition of this contract. Written notice of default, and a reasonable opportunity to cure, must be issued by the party claiming default. Time allowed for cure will not diminish or eliminate any liability for liquidated or other damages.If the default remains after the opportunity for cure, the nondefaulting party may:(a) Exercise any remedy provided by law or equity;(b) Terminate the contract or any portion thereof, including any orders issued against the contract; or (c) Impose liquidated damages, as specified below.Liquidated Damages As it would be practically impossible to fix the actual damages caused by the Vendor in submitting faulty or inaccurate data required in this contract, the Vendor must pay as liquidated damages to MMCAP, a sum of $100 per hour, or the rate (determined solely by MMCAP) at the time the issue is corrected, for the amount of time it takes MMCAP or the MMCAP Participating Facility to correct the issue. Payment is due to the MMCAP Office or the MMCAP Participating Facility no later than 30 days after Vendor’s receipt of the invoice. If the Vendor fails to comply with this contract, liquidated damages will be applied to each default. The purpose of this liquidated damages provision is to ensure adherence to the performance requirements in the contract and to compensate MMCAP or the affected MMCAP Participating Facility(ies) for actual costs associated with performing or correcting items not performed or corrected by the Vendor. No punitive intention is inherent.

72

The act of MMCAP canceling the contract for any such failure or delay will not forfeit its right to recover liquidated damages payments from the Vendor.In any suit involving assessment or recovery of a liquidated damages payment, the reasonableness of the charges will be presumed and the amount assessed, as well as any cancellation rights stated in the contract documents, will be in addition to every other right or remedy now or hereinafter available at law, in equity, by statute, or under the contract.

11. Certification Regarding Lobbying

The undersigned certifies, to the best of his or her knowledge and belief that:

(1) No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of any agency, a member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement.

(2) If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, A Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned will complete and submit Standard Form-LLL, Disclosure Form to Report Lobbying in accordance with its instructions.

(3) The undersigned will require that the language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans and cooperative agreements) and that all subrecipients will certify and disclose accordingly.

This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by 31 U.S.C. 1352. Any person who fails to file the required certification will be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.

__________________________________________Organization Name

__________________________________________Name and Title of Official Signing for Organization

By: _______________________________________Signature of Official

_____________________________________Date

73

12. Affidavit of Noncollusion

I swear (or affirm) under the penalty of perjury:

1. That I am the Responder (if the Responder is an individual), a partner in the company (if the Responder is a partnership), or an officer or employee of the responding corporation having authority to sign on its behalf (if the Responder is a corporation);

2. That the attached proposal submitted in response to the MMCAP Pharmaceutical Prime Vendor Services Request for Proposals has been arrived at by the Responder independently and has been submitted without collusion with and without any agreement, understanding or planned common course of action with, any other Responder of materials, supplies, equipment or services described in the Request for Proposal, designed to limit fair and open competition;

3. That the contents of the proposal have not been communicated by the Responder or its employees or agents to any person not an employee or agent of the Responder and will not be communicated to any such persons prior to the official opening of the proposals; and

4. That I am fully informed regarding the accuracy of the statements made in this affidavit.

Responder’s Firm Name: ___________________________________________

Authorized Representative (Please Print) ______________________________

Authorized Signature: _____________________________________________

Date: __________________

Subscribed and sworn to me this ________ day of ___________

Notary Public

My commission expires: ________

74

13. Affirmative Action Certification

If your response to this solicitation is or could be in excess of $100,000, complete the information requested below to determine whether you are subject to the Minnesota Human Rights Act (Minnesota Statutes Section 363A.36) certification requirement, and to provide documentation of compliance if necessary. It is your sole responsibility to provide this information and—if required—to apply for Human Rights certification prior to the due date and time of the RFP or proposal and to obtain Human Rights certification prior to the execution of the contract. The State of Minnesota is under no obligation to delay proceeding with a contract until a company receives Human Rights certification.

BOX A – For companies which have employed more than 40 full-time employees within Minnesota on any single working day during the previous 12 months. All other companies proceed to BOX B. Your response will be rejected unless your business:Has a current Certificate of Compliance issued by the Minnesota Department of Human Rights (MDHR) OR has submitted an affirmative action plan to the MDHR, which the Department received prior to the date and time the responses are due.

Check one of the following statements if you have employed more than 40 full-time employees in Minnesota on any single working day during the previous 12 months: We have a current Certificate of Compliance issued by the MDHR. Proceed to BOX C. Include a copy of your

certificate with your response. We do not have a current Certificate of Compliance. However, we submitted an Affirmative Action Plan to the

MDHR for approval, which the Department received on __________________ (date). [If the date is the same as the response due date, indicate the time your plan was received: ________ (time). Proceed to BOX C.

We do not have a Certificate of Compliance, nor has the MDHR received an Affirmative Action Plan from our company. We acknowledge that our response will be rejected. Proceed to BOX C. Contact the Minnesota Department of Human Rights for assistance. (See below for contact information.)

Please note: Certificates of Compliance must be issued by the Minnesota Department of Human Rights. Affirmative Action Plans approved by the Federal government, a county, or a municipality must still be received, reviewed, and approved by the Minnesota Department of Human Rights before a certificate can be issued.

BOX B – For those companies not described in BOX A

Check below.

We have not employed more than 40 full-time employees on any single working day in Minnesota within the previous 12 months. Proceed to BOX C.

75

Affirmative Action Certification, Continued

Box C – FOR ALL COMPANIES

By signing this statement, you certify that the information provided is accurate and that you are authorized to sign on behalf of the responder. You also certify that you are in compliance with federal affirmative action requirements that may apply to your company. (These requirements are generally triggered only by participating as a prime or subcontractors on federal projects or contracts. Vendors are alerted to these requirements by the federal government.)

Name of Company: ____________

Date ______________________

Authorized Signature: __

Telephone number: ______________

Printed Name:

Title: ___________________________________________________

For assistance with this form, contact:

Minnesota Department of Human Rights, Compliance Services Section

Mail: 190 East 5th St., Suite 700 St. Paul, MN 55101 TC Metro: (651) 296-5663 Toll Free: 800-657-3704Web: www.humanrights.state.mn.us Fax: (651) 296-9042 TTY: (651) 296-1283Email: [email protected]

76

14. Location of Service and Disclosure Certification

Check all that apply:

The services to be performed under the anticipated contract as specified in our proposal will be performed ENTIRELY within the State of Minnesota.

The services to be performed under the anticipated contract as specified in our proposal entail work ENTIRELY within another state within the United States.

The services to be performed under the anticipated contract as specified in our proposal will be performed in part within Minnesota and in part within another state within the United States.

The services to be performed under the anticipated contract as specified in our proposal DO involve work outside the United States. Below (or attached) is a description of

(1) The identity of the company (identify if subcontractor) performing services outside the United States;

(2) The location where services under the contract will be performed; and

(3) The percentage of work (in dollars) as compared to the whole that will be conducted in each identified foreign location.

CERTIFICATION

By signing this statement, I certify that the information provided above is accurate and that the location where services have been indicated to be performed will not change during the course of the contract without prior, written approval from the State of Minnesota.

Name of Company: ___________________________

Authorized Signature: __________________________

Printed Name: _______________________________

Title: ______________________________________

Date: ______________________________________

Telephone Number: ____________________________

77

15. Immigration Status CertificationBy order of the Governor’s Executive Order 08-01, vendors and subcontractors used by Vendor MUST certify compliance with the Immigration Reform and Control Act of 1986 (8 U.S.C. 1101 et seq.) and certify use of the E-Verify system established by the Department of Homeland Security. E-Verify program information can be found at http://www.dhs.gov/ximgtn/programs.

If any response to a solicitation is or could be in excess of $50,000, vendors and subcontractors must certify compliance with items 1 and 2 below. In addition, prior to the delivery of the product or initiation of services, vendors MUST obtain this certification from all subcontractors who will participate in the performance of the contract. All subcontractors certifications must be kept on file with the Vendor and made available to the State upon request.

1. The company shown below is in compliance with the Immigration Reform and Control Act of 1986 in relation to all employees performing work in the United States and does not knowingly employ persons in violation of the United States immigration laws. The company shown below will obtain this certification from all subcontractors who will participate in the performance of this contract and maintain subcontractors certifications for inspection by the state if such inspection is requested; and

2. By the date of the delivery of the product and/or performance of services, the company shown below will have implemented or will be in the process of implementing the E-Verify program for all newly hired employees in the United States who will perform work on behalf of the State of Minnesota.

I certify that the company shown below is in compliance with items 1 and 2 above and that I am authorized to sign on its behalf.

Name of Company: _____________________________________ Date: ___________________________________

Authorized Signature: _______________________________________Telephone Number: ________________________

Printed Name: ___________________________________________ Title: ___________________________________

If the Vendor and/or the subcontractors are not in compliance with the Immigration Reform and Control Act, or knowingly employ persons in violation of the United States immigration laws, or have not begun or implemented the E-Verify program for all newly hired employees in support of the contract, the State reserves the right to determine what action it may take. This action could include, but would not be limited to cancellation of the contract, and/or suspending or debarring the Vendor from state purchasing.

For assistance with the E-Verify ProgramContact the National Customer Service Center (NCSC) at 1-800-375-5283 (TTY 1-800-767-1833).

For assistance with this form, contact:Mail: 112 Administration Bldg, 50 Sherburne Ave. St. Paul, MN 55155E-mail: [email protected]: 651.296.2600Persons with a hearing or speech disability may contact us by dialing 711 or 1.800.627.3529

78


http://www.dhs.gov/ximgtn/programs

16. Taxpayer Identification

The Contract Vendor consents to disclosure of its social security number, federal employer tax identification number, and/or Minnesota tax identification number to federal and State tax agencies and State personnel involved in the payment of State obligations. These identification numbers may be used in the enforcement of federal and State tax laws which could result in action requiring the Contract Vendor to file tax returns and pay delinquent tax liabilities, if any (Minn. Stat. § 270C.65).

Vendor’s Name: ____________________________________________________

Address: ________________________________________________________

________________________________________________________

________________________________________________________

Federal Employer ID Number: _________________________________________

Minnesota State Tax ID Number: _______________________________________

Minnesota Vendor Registration Number: _________________________________If you are not registered as a vendor to the State, you may register online at www.mmd.admin.state.mn.us/mn02000.htm.(Note: If approved, you will receive your vendor number three business days after you register.)

Are you a sole proprietorship? Yes No

Are you an independent contractor? Yes No

79

17. Preference to Targeted Group & Economically Disadvantaged Businesses & Individuals

Instructions: Check the appropriate answer.

_____ This certification is not applicable.

_____ This certification does apply and as the Responder, I am in compliance with Minnesota Rules, part 1230.1810, subpart B and Minnesota Rules, part 1230.1830 (see attached certification).

80

18. Conflicts of Interest Disclosure & Acknowledgment

I certify that as the Responder and a potential Vendor and on behalf of any subcontractors used in performing the services hereof during the contract term that I do not have any conflicts of interest with this RFP or in the course of performing the services as set forth herein. As a Responder and a potential Vendor I am aware I will be fully responsible for preventing Responder, its subsidiaries, parent, affiliated companies, heirs, legal representatives, and their directors, officers, employees, and agents, subcontractors, employees, from being placed in a situation where a conflict of interest might exist or could give the appearance of existing for all work and services performed under this RFP and potential future contract.

I further certify that, if a conflict of interest is discovered after award, an immediate and full written disclosure must be made to MMCAP that includes a description of the action the Vendor has taken or proposes to take to avoid or mitigate such conflicts. If a conflict of interest is determined to exist, MMCAP may, at its sole discretion, cancel the contract. In the event the Responder or potential Vendor was aware of an organizational conflict of interest prior to the award of the contract and did not disclose the conflict to MMCAP in writing, MMCAP may terminate the contract for default.

As further described below, I have a potential conflict of interest or situation in which there might be the appearance of a conflict of interest and may be unable to perform the project/task/duties/services with this RFP and/or a potential contract.

Responder’s Firm Name: ___________________________________________

Authorized Representative (Please Print) ______________________________

Authorized Signature: _____________________________________________

Date: __________________ Subscribed and sworn to me this ________ day of ___________Notary PublicMy commission expires: _______________

81