Exhibit 10(d)
ENHANCED AUTHORIZED DISTRIBUTION AGENCY AGREEMENT
This agreement ("Agreement") is made and entered into this 20th day of
August, 1997, by and between VHA Inc. ("VHA"), a Delaware corporation, and Xxxxx
& Minor ("O&M"), a ___________________ corporation, an authorized distribution
agent of VHA ("ADA").
This Agreement is entered into based on the following facts:
A. VHA is a nonexclusive limited Agent for VHA Members and Affiliates;
B. VHA is, among other things, in the business of providing (a)
products and other property, purchasing and other opportunities, procurement,
distribution and other services, directly and indirectly, to, for, on
behalf of and as an Agent for certain health care providers, and (b) marketing
and other assistance to certain Vendors and certain wholesalers and
distributors, including, without limitation, ADAs, in order to make the
products, opportunities, procurement, distribution and related services more
conveniently, efficiently and effectively available to Designated VHA Members
and Affiliates (sometimes referred to collectively as "Designated Members");
C. ADA has a reputation for offering to sell and selling high quality
products and for providing prompt, efficient and effective distribution services
that meet or exceed the requirements set forth in this Agreement, including, but
not limited to, the services of selling, marketing, ordering, paying, order
receiving, billing/invoicing, product handling, product storing, product
receiving, inventorying, managing inventory, product transporting, product
delivery, collecting funds, cash application, cash management, receivables
management, payables management, handling customer
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and other inquiries, providing customer service, handling product recalls and
market withdrawals, providing for product returns permitted by law, handling
allowances and providing other distribution services;
D. ADA has computer-based systems which are useful in connection with
managing and conducting its business, which are flexible and able to produce a
wide variety of computer-based reports and which are capable of establishing
computer-to-computer communications among VHA, Vendors and Designated Members;
E. ADA shall provide distribution services as a distribution agent of
VHA to the Designated Members and shall offer as a first option Contract
Products, including, without limitation, Contract Products which display the VHA
PLUS(R) trademark; and ADA desires to perform such services;
F. ADA desires to sell Noncontract Products to the Designated Members
and, in connection therewith, to provide distribution services; and VHA desires
that the Designated Members have the opportunity to purchase such Noncontract
Products and distribution services;
THEREFORE, in consideration of the premises, the representations and
warranties of the parties, the mutual covenants contained herein, and other good
and valuable consideration, the adequacy, receipt and sufficiency of which are
hereby acknowledged, the parties agree, subject to the conditions, terms and
provisions hereof, as follows:
Section 1. Definitions.
(A) As used in this Agreement, each of the following capitalized terms
shall have the following meaning:
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(1) "Agent" means any entity authorized to act on behalf of
another entity by the other within the limited scope of the grant of authority
set forth in the document or documents granting such authority.
(2) "Alternate Distribution Center" refers to any ADA
distribution center other than a Primary Ordering Location.
(3) "Automatic Product Substitution" has the meaning set forth
in Section 4(E).
(4) "Backorder Relay" has the meaning set forth in Section
4(B) .
(5) "Equipment" means equipment having an order in a single or
multiple unit value of over $1,000.
(6) "Contract Products" refers to those products with respect to
which VHA has executed a contract ("Purchasing Agreement"), other than this
Agreement, with a Vendor thereof, such contract providing for, among other
things, the sale by such Vendor of the products to certain Designated Members
through ADA.
(7) "Cost" refers to the lowest of (a) (in the case of a
Contract Product) the amount provided in the applicable Purchasing Agreement as
the price to be billed to the Designated Members without subtraction for cash
discounts allowed by Vendors for prompt payment and prior to the addition of any
distribution service fees, (b) ADA's out-of-pocket expense in obtaining the
product, including actual inbound freight charges not paid or credited by
manufacturer and actually paid by ADA not reflected on invoices from
manufacturers, distributors or others or (c) the net distributor cost of any
product pursuant to any agreement between the Designated Member and the vendor
of such products. In addition to the foregoing, Cost for any product may be
increased by the
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amount equal to the decrease in prompt payment or cash payment discount terms
during the term of a Purchasing Agreement offered by a manufacturer and actually
taken on a consistent basis by ADA.
(8) "Delivery Schedules" has the meaning set forth in Section
6(C).
(9) "Delivery Times" has the meaning set forth in
Section 6(C).
(10) "Designated VHA Members and Affiliates" refers to
those VHA Members and Affiliates identified as such on Schedule 1A. Schedule
1B lists nonacute sites associated with Designated VHA Members and Affiliates.
Schedule 1C lists other Designated health-care organizations assigned by VHA
to ADA for service. Facilities identified on Schedules 1A, 1B and 1C are
sometimes collectively referred to as "Designated Members." Schedules 1A, 1B
and 1C may be amended by VHA to add new Designated Members or to delete
Designated Members at its sole discretion at any time during the term of this
Agreement, upon thirty (30) days notice to ADA.
(11) "Noncontract Products" refers to all products that are
not Contract Products or VHA PLUS(R) Products.
(12) "Price" has the meaning set forth in Section 6.
(13) "Primary Ordering Location" ("POL") refers to the ADA
distribution center which has service responsibility for a particular Designated
Member. ADA's POLs, as of the date of this Agreement, are listed in Schedule 2.
(14) "Purchasing Agreement" has the meaning set forth in
Section 1(A)(6).
(15) "Revised Delivery Time" has the meaning set forth in
Section 6(C).
(16) "VHA Regional Offices" refer to Regional Health Care
Systems and VHA Area Offices which are listed on Schedule 3. Schedule 3 may be
amended by VHA at its sole discretion at any time during the life of this
Agreement upon thirty (30) days written notice to ADA.
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(17) "Service Level Report" has the meaning set forth in
Section 10.
(18) "Vendors" mean the sellers, including, without
limitation, manufacturers of products.
(19) "VHA PLUS(R) Products" mean products bearing the VHA
PLUS(R) trademark.
(20) "VHA Fee" has the meaning set forth in Section 8(G).
(21) "Delivery" is the physical delivery to each location
specified by the Designated Member of the products covered by all orders
received by ADA prior to the standard order cut-off times.
(B) Capitalized terms used in this Agreement but not
specifically defined herein shall have the meanings customarily ascribed to such
terms in the products distribution industry.
Section 2. Appointment as Agent.
VHA appoints ADA as a distribution Agent, subject to the provisions of
Section 11(B). ADA shall provide Designated Members with products, services,
reports and value-added distribution functions. ADA shall work to build a
mutually successful relationship with each Designated Member and work in a
proactive manner to provide the lowest total delivered cost of products, develop
and implement standardization and utilization processes and provide logistics,
operational and analytical services. Based on the scope of logistics,
operational and analytical services requested, ADA may charge appropriate fees
for such services.
ADA agrees to actively support and supplement the strategic initiatives
of VHA through its role as an ADA under this Agreement, including, but not
limited to, the support of all Contract Products as the product of first choice
for each Designated Member.
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Section 3. Product Capacity and Handling.
ADA shall provide warehouse facilities at each of its Primary Ordering
Locations to secure and store sufficient product to meet the service levels to
Designated Members specified in this Agreement.
(A) Contract Products.
(1) ADA's Duties. As VHA's Agent, ADA's duties shall include
the provision of distribution services with respect to Contract Products to each
and every Designated Member, and ADA shall act at all times in accordance with
the conditions, terms and provisions of the Purchasing Agreements.
(2) Purchasing Agreements. VHA shall notify ADA of the
existence of all Purchasing Agreements and all provisions of such Purchasing
Agreements which have or may have any effect on ADA's activities hereunder. VHA
shall provide such notification within thirty (30) days of the date of this
Agreement for Purchasing Agreements executed by VHA on or before the date of
this Agreement and within forty-five (45) calendar days of execution for
Purchasing Agreements executed by VHA hereafter.
(3) ADA Loading of Contract Products. ADA agrees that all
changes in Purchasing Agreements will be loaded into ADA's computer system not
less than forty-five (45) days prior to the effective date of the Purchasing
Agreement or as soon as possible if ADA receives less than forty-five (45) days
notice. ADA will supply each Designated Member with a printout (or such other
format as reasonably requested) setting forth ADA order numbers for all Products
covered by the Purchasing Agreement not less than forty-five (45) days prior to
the effective start date of each Purchasing Agreement and after ADA receives
written notification thereof from VHA.
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ADA will load into ADA's computer system all Contract
Products. Those items not presently stocked by ADA shall be identified on the
printout.
VHA will supply ADA with the Purchasing Agreement data not
less than sixty (60) days prior to the effective date of each Purchasing
Agreement. VHA will instruct Vendors holding Purchasing Agreements to provide to
ADA contract verification based on the foregoing guidelines. ADA shall advise
VHA, at least forty-five (45) days prior to the effective start date of each
Purchasing Agreement, of those Vendors who have not provided contract
verification.
Upon request of a Designated Member, ADA will provide no less
frequently than annually, no more frequently than quarterly, at no charge, a
Purchasing Agreement printout, diskette or electronic transmission listing all
Contract Products with ADA order entry numbers and Prices.
ADA shall load into its mainframe computer, within ten (10)
business days after receipt from VHA, all additions, corrections, price changes
and other modifications to Purchasing Agreements. VHA will notify ADA of the
occurrence of any of the foregoing modifications to the Purchase Agreement on a
bi-weekly basis.
(B) Noncontract Products. Upon request by a Designated Member,
ADA may offer to sell and, if any such offer is accepted, to sell Noncontract
Products to the Designated Members. Designated Members may offer to buy and, if
such offer is accepted, may buy Noncontract Products from ADA. In the event such
offers, sales or purchases are made, such offers, sales or purchases shall be
processed by ADA and the Designated Members in conformity with the provisions of
this Agreement.
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(C) VHA PLUS(R) Products. ADA agrees to stock such amount of VHA
PLUS(R) Products as ADA reasonably determines is necessary to satisfy the
reasonable stocking requirements of the Designated Members. ADA will provide to
Designated Members for use the VHA PLUS(R) Stocking Request Form (Schedule 4B).
Any individual Designated Member requesting a price change on a VHA PLUS(R)
Product shall follow the Pricing Protocol described in Schedule 4. All VHA
PLUS(R) Products that have a minimum of one transaction per month will be
identified in ADA inventory as such and be subject to appropriate inventory by
ADA. ADA will use its best efforts to market and promote VHA PLUS(R) Products
when such Products meet the needs of a Designated Member.
(D) Stocking Responsibility. ADA shall have the following stocking
responsibilities with respect to both Contract Products and Noncontract
Products:
(1) ADA will maintain sufficient stock of Contract Products
and Noncontract Products to support Designated Members at the service level set
forth in this Agreement.
XXX xxxxxxxx requirements are as follows:
o ADA must stock locally all "A" and Impact items ("A"
items are products that are ordered at least two (2)
times per month by a Designated Member.)
o ADA, upon Designated Member's request, will stock
locally any other non- "A" or Impact items that are
ordered at least five (5) times per month per POL
(VHA Designated Member or not). If Designated Member
requests local stocking on items that are ordered
less then five (5) times per month, Designated Member
will pay non-aligned pricing except on VHA contract,
VHA PLUS and VHA OpportUNITY products.
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o If Designated Member chooses not to have product
stocked locally and product is not stocked locally by
ADA, the Designated Member can either access these
products directly from the manufacturer through the
ADA and pay all additional charges (i.e., in-bound
transportation, drop shipping, etc.) or have ADA ship
from another location and Designated Member will pay
transportation charges.
(2) Upon request of a Designated Member to add items to stock,
ADA will add the items to stock from any vendor which meets industry standards
of good manufacturing practices and has credit worthiness comparable to other
vendors with which the ADA does business, where the VHA Member or Affiliate's
usage meets the demand levels described in Section 3(D)(3). Within thirty (30)
days, or industry standard lead time, of receipt of usage data, ADA will have
the items in stock and advise the requesting Designated Member that the items
are available at the Primary Ordering Location. ADA may refuse to stock a
Noncontract Product.
(3) ADA will not remove from stock at the Primary Ordering
Location any product being purchased by a Designated Member unless ADA no longer
distributes the product. ADA will review its stock on an appropriate basis to
identify those products which have generated sales of less than five (5)
transactions per month. ADA may then contact any Designated Member who was
purchasing these products within the last one hundred eighty (180) calendar days
to ascertain continuing need. If no need is expressed, ADA may give written
notice to all Designated Members of ADA's intent to remove the items from stock.
If a Designated Member provides ADA, within ten (10) business days after such
notice, with the Designated Member usage estimates in
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excess of five (5) transactions per month, ADA will maintain the items in stock.
If ADA does not receive usage data, ADA may discontinue the items and shall so
advise the Designated Members.
(4) From time to time, VHA may advise ADA that specified
Contract Products are to be stocked by ADA exclusively for Designated Members.
ADA shall use its best efforts to restrict delivery of such specified Contract
Products to Designated Members, provided ADA shall be free to enter into
agreements with any Vendor for distribution of any products, including products
which may be Contract Products under this Agreement.
(5) If a Vendor advises ADA that specific Contract Products or
Noncontract Products will be available in reduced quantities or will be
allocated, and that, therefore, ADA may not be able to honor all requests for
such products, ADA will allocate, based on past purchasing history of the
Designated Members, a portion of such products to Designated Members and shall
advise VHA and the Designated Members of the quantity of products so allocated.
ADA agrees that Designated Members shall receive [*] in the event of limited
product availability.
(6) ADA shall provide, upon request of Designated Members,
regular list price catalogs, either in hard copy or electronic media, at the
election of Designated Members.
(E) Notice of Physical Inventory. ADA will give VHA and the Designated
Members not less than forty-five (45) days prior written notice of ADA's intent
to perform a physical inventory at the Primary Ordering Location. ADA will
accept saleable returns up to ten (10) days prior to such inventory and,
thereafter, ADA will continue to authorize returns, except such returns will be
held at the Designated Member until the first business day after completion of
the physical inventory.
* [This confidential information has been omitted and filed separately
with the Commission.]
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Section 4. Ordering.
(A) Orders. Orders for Contract Products and Noncontract Products by
Designated Members may be submitted on purchase orders delivered to ADA through
electronic order entry via computer or any other reasonable means. Orders must
be placed by Designated Member prior to the order cut-off time communicated by
applicable POL to be delivered on the next regularly scheduled delivery. ADA
shall not require a minimum dollar order amount for Contract Products or
Noncontract Products ordered by Designated Members provided products are ordered
in Vendor's standard packaging units. ADA will, after having selected from its
stock the Contract Products and Noncontract Products ordered by a Designated
Member, physically check each order to assure that the products and quantities
selected by ADA accurately correspond to the order received by ADA from the
Designated Member. Upon request, ADA will develop and use a method of setting
predetermined order quantities (standing orders) based on a Designated Member's
average weekly or bi-weekly usage of Contract Products and Noncontract Products.
These order quantities may be adjusted by the Designated Member upon seventy-two
(72) hours notice to ADA. If a Designated Member utilizes standing orders, ADA
shall count all lines of standing orders as lines ordered EOE by the Designated
Member.
(B) Backorder Relay. If ADA fails to have a Contract Product, "A" Item
or "Impact" Item on hand at a Primary Ordering Location when the Contract
Product, "A" Item or "Impact" Item is available at an Alternate Distribution
Center, ADA shall, at its own expense, be able to deliver the Contract Product,
"A" Item or "Impact" Item directly to the ordering Designated Member or by way
of the Primary Ordering Location, whichever is fastest, from the Alternate
Distribution Center ("Backorder Relay"). Backorder Relay is required only for
"A" Items and "Impact" Items (see
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Section 6(E)). ADA shall use Backorder Relay upon customer request whenever an
"A" Item or "Impact" Item is unavailable at a Primary Ordering Location,
regardless of the cause of such unavailability (for example, even if such
unavailability is caused by Vendor's backorder). ADA shall use Backorder Relay
whenever one or more line items are unavailable at the Primary Ordering
Location. ADA will notify Designated Members by automatic order entry print
back, customer service, sales representative or other reasonable means of a true
backorder at the Primary Ordering Location. Designated Members, at their option,
will select a desired means of resolution that may include: product
substitution, maintaining backorder or order item cancellation. Each Designated
Member will also have the option to select a reasonable method of delivery to
meet the individual institution's service requirements. Designated Members shall
not be responsible for any delivery charges where such Backorder was the
responsibility of ADA.
(C) Electronic Order Entry (EOE). All Designated Members will use
Electronic Order Entry for placement for not less than [*] of all lines ordered
unless otherwise agreed by ADA. ADA shall maintain an "800" number for
electronic order entry and direct contact with the Primary Ordering Location
personnel by Designated Members and the VHA Regional Offices. EOE is calculated
by dividing the lines ordered initially electronically divided by the total
lines ordered and shall be measured each calendar quarter.
(D) Confirmation. ADA shall provide to each Designated Member a
complete confirmation of each order placed by such Designated Member. The
complete confirmation shall include the following information: (1) a description
of the products, Price, quantity to be shipped and whether Backorder Relay or
Automatic Product Substitution will be used for each item ordered; and (2) the
dollar amount of the total order.
* [This confidential information has been omitted and filed separately with the
Commission.]
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The complete confirmation shall also include identification
codes such as purchase order numbers and cost center designations, if the
Designated Member by written notification to ADA elects to be supplied such
information. For electronic orders, the complete confirmation shall be received
by the Designated Member within two (2) hours after receipt of the order by ADA
during normal business hours. The complete confirmation will be provided through
print back or computer if the appropriate technology is available to ADA and the
Designated Member.
(E) Automation. ADA shall, at its own expense, make available a
software application capable of computer-to-computer on-line transmission (the
"Application") with each Designated Member, VHA Manufactures and VHA. The
Application will use ANSI X12 EDI where possible. Where EDI is not possible, VHA
and ADA must agree in writing to a proprietary implementation of data
transmission. ADA represents that Schedule 5 hereof sets forth an accurate
description of ADA's current capabilities and types of installations with
respect to communications with each Designated Member, VHA Manufacturer and VHA.
ADA shall use the Application for the term of this Agreement. ADA represents
that it has a computerized Automatic Product Substitution system and that these
systems are accurately described in Schedule 5 hereof. The use of Automatic
Product Substitutions will be done for individual line item products upon the
request of a Designated Member.
Section 5. Uniform Purchase.
Upon request, ADA will, in conjunction with the VHA Regional Offices
and with those Designated Members not part of a VHA Regional Office, identify
products and categories of products that are not under contract through VHA. ADA
will use its best efforts to obtain for
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Designated Members a reduced cost of said product for an extended period of
time, based on the anticipated usage and participation of VHA Regional Office
members or the combined usage for Designated Members not part of a VHA Regional
Office.
Section 6. Base ADA Services.
All services listed in this Section shall be provided to Designated
Members for the cost+plus fee applicable from the Base Distribution Service Fee
Volume Matrix in Schedule 6 or as determined by the Modified Activity Based
Matrix in Schedule 6B. Designated Member will have the option of having its base
ADA Services priced according to Schedule 6 or 6B. Designated Member will be
required to use its selected pricing method for a period of not less than one
(1) year, unless a change in schedule pricing options is approved by VHA
Distribution Services. Schedule 6 provides a Base Distribution Service Fee
Volume Matrix which determines a Designated Member's Base Distribution Service
Fee for the base services provided by its ADA. Designated Members may elect to
have Base Distribution Service Fees billed separately or included in the Price
of the product. ADA shall offer additional services in accordance with Section
7. Additional service fees stated as a percent shall [*]. Distribution Service
Fees for additional services shall equal the actual cost of the service,
provided ADA is capable of calculating actual cost. Otherwise, fees for
additional services will be determined in accordance with Schedule 6A. The
"Price" of the product is determined by the definition of Cost as set forth in
this Agreement, Section 1. Definition (A)(7), adjusted to reflect all credits,
discounts, rebates, returns, allowances and other adjustments granted by the ADA
plus Cost multiplied by the applicable Base Distribution Service Fee from
Schedule 6. Volume to determine the Base Distribution Service Fee is determined
by the actual three-month
* [This confidential information has been omitted and filed separately with the
Commission.]
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purchase history of the Designated Member from the ADA, for the preceding three
months. Volume will be recalculated on a semiannual basis and, at the Designated
Member's election, the Base Distribution Service Fee will be adjusted or the
Designated Member will receive a credit in an amount equal to the actual Base
Distribution Service Fee and the billed Base Distribution Service Fee for the
next six (6) month period. There will be no retroactive credit due Designated
Member for the period being reviewed.
Schedule 6B provides a Modified Activity Based Matrix which determines
a Designated Member's distribution service fee for services provided by its ADA.
Service fees will be billed separately as determined by Schedule 6B. Additional
services not provided in the Modified Activity Based Matrix are found in Section
7 or Schedule 6A. These additional service fees will be billed as a separate
line item charge. The "Price" of the product is determined by the definition of
Cost as set forth in this Agreement, Section 1. Definitions (A) (7), adjusted to
reflect all credits, discounts, rebates, return allowances and other adjustments
granted by the ADA. Product Price will be billed at cost+plus zero under this
fee option. Volume and lines ordered average is determined by the actual three
(3) month purchase and activity history of the Designated Member from the ADA,
for the preceding three (3) months. Volume and lines ordered average will be
recalculated on a semiannual basis and the Designated Member's Modified Activity
Based fee will be adjusted for changes in volume or lines ordered average
activity. There will be no retroactive credit due Designated Member for the
period being reviewed.
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(A) Invoice Format Options. Designated Members may select from the four
options listed below for the invoice format in presenting Base Distribution
Service Fees from Schedule 6 and additional service fees from Schedule 6A, if
any.
Base Distribution Service Fee Matrix
Option 1 - Base Distribution Service Fees from Schedule 6 and
additional services selected from Schedule 6A by the Designated Member,
if any, shall be added to Cost and billed as a total Price.
Option 2 - Base Distribution Service Fees from Schedule 6
shall be added to Cost and billed as a total Price, and any additional
service selected from Schedule 6A shall be billed as a separate line
item, or on a separate monthly invoice, at Designated Member's option.
Option 3 - Base Distribution Service Fees from Schedule 6 and
the charges for additional services selected from Schedule 6A, if any,
shall each be billed as a separate line item, provided that ADA and the
Designated Member are able to resolve any sales tax or similar tax
issues prescribed by this invoice option.
Modified Activity Based Costing Invoice Options
Option 1 - All services will be billed separately from cost.
These charges will be billed as separate line item charges by service.
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Option 2 - All services can be added together and billed as
one separate line item charge or as a separate line item charge for all
services, provided that ADA and the Designated Member are able to
resolve any sales tax or similar tax issues prescribed by this invoice
option.
Designated Member is obligated to use for at least one (1)
year the invoice option selected in accordance with Schedule 6C or Modified
Activity Based Costing. To initiate an invoice format change, Designated Member
must submit a revised Schedule 6C, Designated VHA Member Distribution Service
Fee Calculation and Acknowledgment Form/Distribution Service Fee Change
Form to VHA Distribution Services and ADA.
VHA and/or ADA may request reasonable substantiation of
purchase figures provided by any Designated Member. Any Designated Member which
fails or refuses to provide accurate information in a timely manner as to its
total volume of distributed purchases shall be charged a Distribution Service
Fee based on the smallest volume distribution service fee.
(1) Initial Implementation. See Schedule 6D for the details to
the initial implementation process for current Designated Members. In addition,
each VHA member will be sent a Designated Member Assignment and Reassignment
Form, Schedule 6E.
(2) Semiannual Volume Review. VHA will, on a semiannual
calendar basis, notify each VHA Member and Affiliate and ADA of each VHA Member
or Affiliate's past semiannual actual purchase history. Based on this historical
data, each Designated Member's next semiannual Base Distribution Service Fee
will be determined from the Base Distribution Service Fee
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Matrix, Schedule 6 or Schedule 6B. See Schedule 6D for full details of the
Distribution Service Fee Volume Review process.
(3) Semiannual Distribution Service Activity Review. See
Schedule 6D for complete details on the Semiannual Distribution Service Activity
Review.
(4) Acute Care System Definition Pricing Policy. See Schedule
6F for the details for pricing Base Distribution Service Fees for Systems.
(5) System Pricing Policy for the Continuum of Care. "Care
Continuum Sites of Care" refers to various non-hospital market segments
throughout the continuum of care. Examples of these sites of care include, but
are not limited to, physician/clinic market, home-care market, long- term-care
market, ambulatory-care market and freestanding surgery-center market. See
Schedule 6F1 for the details for pricing of Base Distribution Services for
Systems that include nonacute sites in the system.
(B) Payment Terms. Each Designated Member shall designate in writing
one of the payment options listed in Schedule 7. A Designated Member may change
its payment option no more frequently than semiannually upon thirty (30) days
prior written notice to ADA.
(C) Delivery. Each Designated Member will be entitled to the
appropriate number of deliveries as determined by either the Base Distribution
Service Fee Matrix, Schedule 6, or the Modified Activity Based Distribution
Service Fee Matrix, Schedule 6B, and excluding the following holidays: New
Year's Day, Memorial Day, July 4th, Labor Day, Thanksgiving and Christmas. Each
Designated Member may elect to receive fewer than the number of deliveries
available for their volume or buy additional deliveries at their option. The
cost of additional deliveries is determined
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in accordance with Schedule 6A. There is no credit given for electing to take
less deliveries offered to Designated Member's volume from Schedule 6 or 6B. The
definition of delivery is in Section 1 (22).
The delivery of back ordered items (including items delivered
through Backorder Relay) does not constitute an additional delivery; however,
VHA has no objection to ADA encouraging Designated Members to allow back ordered
items to be held and delivered with the next regular delivery.
ADA shall notify the affected Designated Member at the
earliest convenient time after ADA can reasonably anticipate that a delivery
will be made after the scheduled delivery time ("Delivery Time"). Such
notification shall include the anticipated date and time of delivery of the late
shipment ("Revised Delivery Time") and the reason for the delay.
In order to minimize the frequency and length of delays, ADA
shall establish a secondary delivery system which shall be used in the event
that the primary delivery method is unavailable.
(D) Returned Goods. ADA shall service returned goods, including,
without limitation, arranging for credits due any Designated Member in
accordance with the Returned Goods Policy specified in Schedule 8.
(E) Fill Rate. ADA shall maintain for each Designated Member an
unadjusted Fill Rate for all "A" Items of [*]. "A" Items are defined as those
items that are stock items and are ordered
* [This confidential information has been omitted and filed separately with the
Commission.]
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by the Designated Member at least twice every thirty (30) days. Usage guidelines
are provided in Schedule 9. The Fill Rate is determined by line items ordered
divided by line items filled, first truck.
ADA will provide to each Designated VHA Member or Affiliate by
February 1 of each year, commencing within sixty (60) days of implementation of
this Agreement and by February 1 of each year thereafter, the Designated VHA
Member or Affiliate's "A" Items list, and the ADA and Designated VHA Member or
Affiliate will mutually agree to the "A" Items list by March 15 of the same
year. In addition to "A" Items, the ADA will be responsible for maintaining each
Designated Member's "Impact Product List". The "Impact Product List" is a list
of not more then twenty-five (25) items identified by Designated Members as
items of such importance to Designated Members that without these items
Designated Member's operations would be impeded or would be negatively impacted.
Items on Designated Member's "Impact Product List" will be mutually agreed upon
by Designated Member and ADA no later than February 1 of each year. Fill Rate on
all items on "Impact Product List" will be unadjusted [*]. Each Designated
Member will approve the first "A" and Impact List by signing Schedule 9A.
VHA will take into consideration a manufacturer's backorder
impact if ADA is unable to meet the [*] unadjusted fill rates on "A" Items or
[*] unadjusted on Impact items only if manufacturer's backorder is of such
nature that ADA under no circumstances can meet the fill rate obligation defined
in this Section.
(F) Designated Member Reports. ADA shall provide each Designated Member
with the monthly reports listed in Schedule 10 by the fifteenth day of the
following month. VHA may modify or change Schedule 10 upon sixty (60) days
written notice to ADA.
* [This confidential information has been omitted and filed separately with
the Commission.]
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(G) Member Quarterly Business Review. Once each calendar quarter, ADA
shall meet with each Designated Member to discuss, at a minimum, the issues
listed in Schedule 11, Member Business Review Agenda.
(H) ADA Representative. Schedule 11 lists the responsibilities of ADA's
representatives for each Designated Member.
(I) Hours of Operation. ADA shall staff the Primary Ordering Location
each business day continuously from at least 8:00 a.m. through 6:00 p.m., local
time. In case of an emergency, Designated Members can call the Primary Ordering
Location. ADA will provide a list of emergency telephone numbers at the Primary
Ordering Location for after-hours contact.
(J) ADA Service Responsibilities. Schedule 9 lists the responsibilities
of the ADA with penalties for the ADA upon failure to perform service
responsibility expectations.
Section 7. Other Services Available from ADA.
The services listed in this Section shall be available from ADA at an
additional charge to the Designated Member in accordance with Schedules 6A.
(A) JIT Program. ADA shall offer Just-in-Time ("JIT") delivery services
upon request. JIT services shall include frequent deliveries in cases or boxes,
whatever is Vendor's standard unit of packaging. JIT service fees are outlined
in Schedule 6A.
(B) Stockless/XXX (Lowest Unit of Measure). ADA shall offer
stockless/XXX services upon request. At a minimum, such services shall include
the ability to provide: frequent delivery to meet agreed upon stocking levels,
delivery in the lowest unit of measure, pick and pack by area of use and
delivery to area of use and put stock away. Stockless/XXX services shall be
provided
21
with a fill or kill calculation with an approved substitution list as provided
by the Designated Member. Stockless service fees are outlined in Schedule 6A.
(C) Emergency Deliveries. ADA shall have emergency delivery services
available twenty-four (24) hours a day, seven (7) days a week. ADA may charge
[*] for providing product by emergency deliveries.
(D) Bar Coding. ADA shall provide Bar Coding labels to Designated
Members upon request. ADA may charge [*] in providing bar coding labels.
(E) Other Services. Schedule 6A details certain listed ADA services
available and the charge structure, if any, associated with those services. ADA
and each Designated Member may negotiate additional services as requested by the
Designated Member.
(F) Selection and Change of Additional Services. Designated Members
shall identify additional services selected in accordance with Schedule 6A, and
Designated Members may change additional services selected in accordance with
Schedule 6A.
(G) Customized Packing Slips and Invoices. ADA shall provide customized
packing slips and invoices consistent with Designated Member requirements in
accordance with Schedule 6A.
(H) Customized Pallet Design. ADA shall assist in pallet design and
arrangement and shall deliver goods in accordance with such pallet design upon
request of Designated Members as defined in Schedule 6A.
Section 8. ADA Responsibilities.
ADA shall be responsible to perform the following:
*[This confidential information has been omitted and filed separately with the
Commission.]
22
(A) Disaster Plan. ADA will assist each Designated Member and VHA
Regional Offices in developing a plan of action for delivery of products in the
event of a natural disaster in the geographical area of a Designated Member.
Schedule 12 details ADA's disaster plan. ADA shall provide VHA, each VHA
Regional Office and Designated Members, upon request, a written action plan
describing procedures in the event their Primary Ordering Location should become
unable to provide products under this Agreement. These action plans will be
reviewed yearly by ADA and VHA and updated as required.
(B) Computer Systems. ADA attests that, in the event its computer
system should fail, it has access to a backup computer system which will be in
operation in no more than forty-eight (48) hours. Schedules 5 and 13 detail
ADA's computer capabilities. ADA will utilize manual ordering systems during
periods in which its computer systems are not operative in order to provide an
uninterrupted flow of Contract Products and Noncontract Products to the
Designated Members.
(C) EDI Capabilities. Schedule 14 lists the EDI capabilities required
of ADA.
(D) VHA Quarterly Business Review. ADA corporate staff shall meet no
less frequently than once each calendar quarter with VHA to discuss ADA's
performance under this Agreement. This quarterly business review shall also
be used to establish performance targets and goals and to review progress
toward such targets and goals.
(E) Reports to VHA. ADA shall provide to VHA reports as specified in
Schedule 15. VHA may amend Schedule 15 at any time upon sixty (60) days written
notice to the ADA. Additional reporting requirements are specified in the Supply
Chain Management Information Technology Guidebook attached to this Agreement.
Failure to provide the required tapes, diskettes
23
or information by the deadline shall result in the following payments by ADA to
VHA per calendar year:
1st Failure: Written Warning
2nd Failure: [*] Late Fee
3rd Failure: [*] Late Fee
4th Failure and each
succeeding failure per
calendar year: [*] Late Fee
(F) Realignment of Supply Channel. ADA will support the efforts of VHA
to realign the supply channel through efficient activity behavior by
manufacturers, distributors, Designated Members and VHA. VHA has set standards
of performance for the aforementioned members of the supply channel, and the ADA
will be responsible for collaborating with VHA to determine the best ways for
all members of the supply channel to perform in an efficient manner.
(1) Vendor. The standards of performance for Vendors are
located in Schedule 16 of this Agreement. The ADA will be responsible for
monitoring all Vendors that they distribute and their compliance with these
standards of performance. Schedule 17 lists Vendors which meet the performance
standards, and VHA may amend Schedule 17 from time to time.
Initial Implementation. Each ADA will, upon receipt
of the manufacturers' standards of performance, review each of the
manufacturers that they distribute against these standards and develop two
lists:
(a) Aligned Vendor List
(b) Nonaligned Vendor List
The Aligned Vendor List will be made up of all those
manufacturers that meet the minimum point allocation for standards of
performance. In addition, ADA will provide VHA
* [This confidential information has been omitted and filed separately with the
Commission.]
24
with a complete manufacturer assessment of standards of performance compliance
and exactly how each manufacturer complies with each standard of performance.
The Nonaligned Vendors will be made up of all those
manufacturers that do not meet the minimum point allocation for standards of
performance. In addition, ADA will provide VHA with a complete manufacturer
assessment of standards of performance compliance and exactly how each
manufacturer complies or does not comply with each standard of performance.
Ongoing Management of Vendor Standards of
Performance. Each quarter during the term of this Agreement, ADA will report
to VHA any manufacturers that are either added to or removed from both lists. A
manufacturer may not be added or removed from either list without written
consent from VHA Distribution Services. ADA must provide VHA quarterly a
complete review of all Aligned Manufacturers' adherence to the standards of
performance.
(2) Distributor. The standards of performance for ADAs are
located in Schedule 16 of this Agreement. The ADA will be responsible for
complying with all the standards of performance.
Initial Implementation. Each ADA will have a review
with VHA to determine their compliance level with the ADA standards of
performance. VHA will keep record of all levels of compliance to the
standards of performance. For each performance measure that is not met, VHA
will work with the ADA to achieve full compliance.
Ongoing Management of Distributor Standards of
Performance. At all ADA quarterly business reviews, VHA will review the
ADA's compliance to the Distributor Standards of Performance.
25
(3) Designated Members. The standards of performance for all
Designated Members are located in Schedule 16 of this Agreement. The ADA, along
with VHA will be responsible for managing the Designated Member compliance to
their standards of performance.
Initial Implementation. Beginning with the setting
of each Designated Member's Distribution Service Fees, and based on each
Designated Member's compliance to their standards of performance, compliance
will be rewarded in the form of incentives that each Designated Member can earn.
Ongoing Management of Designated Member Standards of
Performance. Each quarter VHA and ADA will review Designated Member
compliance to their standards of performance. VHA will adjust each Designated
Member's Schedule 6C to reflect Designated Member's compliance to their
standards of performance.
(G) VHA Fee. With the delivery of every monthly sales report listing
the sales to each Designated Member, ADA will pay to VHA on the 10th of each
month a "VHA Fee" calculated on total net sales of all Contract and Noncontract
products. ADA shall pay a VHA Fee on all Aligned Manufacturer sales and a VHA
Fee on all other sales. Additionally, ADA will pay a VHA fee on all
Aligned-Noncontract Manufacturer SKUs that are ordered less than five (5) times
per month and are stocked locally. ADA will pay a fee on all Aligned and
Nonaligned Manufacturer SKUs not stocked locally. These fees are applicable for
both Schedules 6 and 6B as follows:
26
Monthly Volume Aligned Fee Nonaligned Fee
$0-7,500 [*] [*]
$7,501-25,000 [*] [*]
$25,001-75,000 [*] [*]
$75,001-150,000 [*] [*]
$150,001-250,000 [*] [*]
$250,001-400,000 [*] [*]
$400,001-600,000 [*] [*]
$600,001-800,000 [*] [*]
$800,001> [*] [*]
Please note for non-acute site of care priced under Schedule 6B1, ADA
will pay VHA a fee on all Aligned/Nonaligned manufacturer SKUs of [*]
on total sales.
Schedule 18 lists those products for which ADA is not
obligated to pay the VHA Fee. Sales of Schedule 18 products shall be deducted
from the quarterly sales volume prior to calculation of the VHA Fee.
(H) ADA Representative Compensation System. ADA shall provide VHA a
written summary of ADA representative's compensation plan for the following year
no later than November 1 of each year. ADA shall provide VHA with the
opportunity to make comments on such plan or plans.
(I) VHA Access to Facilities and Personnel. ADA shall permit VHA and
its authorized representatives access to ADA's facilities and personnel at all
reasonable times upon reasonable request. ADA shall provide, at no charge, VHA
with the necessary software to permit "read only" * [This confidential
information has been omitted and filed separately with the Commission.]
27
access to ADA's computer data (pricing, inventory, accounts receivable, fill
rates, etc.) on an on-line basis.
(J) Fraud and Abuse Disclosure. ADA represents and warrants that, as a
seller, it will provide each Designated Member all information necessary to
comply with the Medicare Medicaid fraud and abuse/anti-kickback statute (42
U.S.C. ss.1320a-7b) and the regulations issued thereunder.
(K) Vendor Reports. ADA agrees to deliver all manufacturer tracing and
rebate reports to each Vendor for Contract Products no later than ten (10) days
after the end of the month in which the sales reported took place.
(L) Returned Goods Policy. ADA's returned goods policy is stated in
Schedule 8.
(M) EDI Transaction Sets. Required EDI transaction sets are stated in
Schedule 14.
Section 9. Drop Shipments.
If a Vendor ships Contract Products or Noncontract Products directly to
a Designated Member (a "drop shipment") and the Vendor bills through ADA, such
transaction will be subject to the terms of this Agreement.
ADA may pass through to the Designated Member any service charges
levied by Vendor on ADA for drop shipments. ADA will notify VHA Members and
Affiliates of any such service charges at the time of order.
Section 10. Service Level.
In addition to its other service obligations under this Agreement, ADA
shall provide the minimum level of service specified in Schedule 9 attached.
Schedule 9 may be amended from time to time by the written agreement of the
parties.
28
Section 11. General.
(A) Risk of Loss and Insurance. As between ADA and the Designated
Members, ADA shall bear all risk of loss while Contract Products or Noncontract
Products are in ADA's possession, custody or control. ADA shall provide evidence
to VHA that ADA is maintaining all-risk, full- replacement-cost insurance
coverage for any such Contract Product or Noncontract Product. The Designated
Members shall not bear the risk of loss prior to their receipt of Contract
Products or Noncontract Products. VHA shall never bear any risk of loss. ADA may
satisfy the foregoing insurance requirements through its self-insurance program.
In addition, ADA shall secure and maintain, at its own expense, commercial
general liability insurance, including blanket contractual liability and
products liability coverages with minimum limits of $2,000,000 per occurrence
and $5,000,000 annual aggregate. Such insurance shall include VHA and Designated
Members as additional insureds. Within thirty (30) days from the date hereof,
ADA shall submit to VHA a certificate of insurance attested by a duly authorized
representative of the insurance carrier or carriers, evidencing that the
insurance required by this Section is in force and in effect and that such
insurance will not be canceled or materially changed without giving VHA at least
thirty (30) days prior written notice. ADA's obligation to obtain and maintain
the required insurance and submit the required certificate of insurance to VHA
shall continue during the term of this Agreement and for five (5) years
thereafter.
(B) Nonexclusivity. In consideration that ADA will have access to
confidential price information of VHA and the assistance of VHA in gaining
access to Designated Members, ADA shall not offer to sell or sell Contract
Products or Noncontract Products or otherwise do business with any Designated
Member unless contemplated by this Agreement or approved in writing by
29
VHA. ADA's entire relationship vis-a-vis products with the Designated Members
shall be governed by this Agreement.
VHA and other persons may sell or distribute Contract
Products, Noncontract Products or both to Designated Members. Nothing in this
Agreement shall prohibit VHA from entering into any distribution agreement with
a manufacturer that distributes its own products. VHA retains the right to
manufacture, sell, market and otherwise distribute goods and services to
Designated Members and to any other party.
(C) Confidentiality. ADA shall not provide any usage, sales or purchase
data relating to Designated Members to any third party, except to the extent
necessary to obtain credits or charge backs or to meet other Vendor
requirements, e.g., sales tracings, etc., or as required by applicable law
(including governmental rules and regulations) or in connection with enforcement
of this Agreement. If ADA currently or during the term of this Agreement has in
place a binding contract or other arrangement to supply usage, sales or purchase
data to IMS America, Ltd., Selling Areas Marketing Inc. of Chicago or any other
data collection entity, ADA may provide the information required by such
contract or arrangement if no Designated Member is identified or identifiable
therefrom either separately or as a group.
ADA acknowledges that information supplied to it by VHA is the
property of VHA. ADA and VHA agree to hold confidential the terms, provisions
and conditions of this Agreement and information which is marked confidential
and is supplied to it by the other party pursuant to or in connection with this
Agreement or the Purchasing Agreements and to return any such information to the
providing party promptly upon the termination of this Agreement. ADA and VHA
agree to use such confidential information only in connection with the
performance of their obligations under
30
this Agreement. ADA and VHA shall not disclose such information to any third
party except with the consent of the other party.
VHA acknowledges that, as professional business people, ADA's
sales representatives have access to information necessary to properly manage
their territory. The terms of this Agreement will be provided to the sales and
marketing team to ensure their thorough understanding of the program and its
objectives.
Notwithstanding any other provision of this Agreement, the
obligations of ADA and VHA to maintain the confidentiality of the confidential
information shall not apply to any portion of the confidential information that:
(i) was in the public domain at the time of its disclosure to the other party;
(ii) enters the public domain through no fault of the receiving party or its
affiliates; (iii) was communicated to the receiving party or its affiliates by a
third party free of any obligation of confidence; (iv) was developed by
officers, employees or agents of the receiving party or its affiliates
independently of, and without reference to, the confidential information; (v) is
already known to the receiving party or its affiliates at the time of receipt of
the confidential information; (vi) is required by applicable law, governmental
rules or regulations or judicial process to be disclosed.
The obligations of ADA and VHA pursuant to this Section 11(C)
shall survive for a period of three (3) years after the termination of this
Agreement.
(D) Warranty. ADA warrants that any product delivered hereunder shall
be new, unopened and in its original packaging as received from the Vendor,
having been stored in accordance with any Vendor instructions. ADA shall not
sell any products without a reasonable warranty from the Vendor which is
assignable to the Designated Member.
31
ADA agrees to take any action necessary, and any action
reasonably requested, to effect the assignment of such manufacturers' warranty
to the purchaser of the warranted product.
ADA MAKES NO IMPLIED WARRANTIES OR OTHER EXPRESS WARRANTIES,
INCLUDING ANY WARRANTY OF MERCHANTABILITY OR WARRANTY OF FITNESS
FOR A PARTICULAR PURPOSE.
(E) Relationship. Each party to this Agreement has only the authority
granted by this Agreement. Neither party shall take any action on behalf of the
other party unless consented to in writing by the other party.
(F) Financial Statements. ADA will supply to VHA upon request and at
least annually copies of ADA's annual audited financial reports. Such reports
shall include, at a minimum, an income statement, balance sheet, statement of
equity, statement of cash flows, all footnotes and such other information as VHA
may reasonably request.
(G) Federal Access. Until the expiration of four (4) years after ADA
furnishes any service under this Agreement, ADA will maintain and, upon the
request of the Secretary of the U.S. Department of Health and Human Services,
the Comptroller General of the United States or a representative of either of
them, ADA will make available to such requesting person this Agreement and all
books, documents and records that are necessary to certify the nature and extent
of costs claimed to Medicare by any Designated Member with respect to any
services provided by ADA under this Agreement. Whether or not ADA is permitted
hereunder to do so, if ADA carries out any of the duties of this Agreement
through a subcontract, with a value or cost of $10,000.00 or more over a twelve
(12) month period, with a related organization or person, then ADA agrees to
cause such related organization or person to, and to include in any such
subcontract clauses and provisions
32
to the effect that such related organization or person agrees to maintain, and
upon the request of the Secretary of the U.S. Department of Health and Human
Services, the Comptroller General of the United States or a representative of
either of them, make available to such requesting person the subcontract and all
books, documents and records that are necessary to certify the nature and extent
of costs claimed to Medicare by any Designated Member with respect to any
services provided under such subcontract.
(H) Compliance With All Laws. Each party to this Agreement represents
and warrants to the other party that it does and will comply with all laws in
connection with this Agreement and the performance of its obligations hereunder;
provided, however, without limiting the generality of the foregoing, ADA shall
provide documentation to VHA upon request to demonstrate compliance with all
applicable OSHA and EEOC requirements.
(I) Indemnification. ADA agrees to indemnify VHA, the Designated
Members and their respective affiliates, directors, officers, employees, agents,
servants and representatives, upon demand for and against any claim, loss,
liability or expense (including reasonable attorneys' fees and other reasonable
expenses of litigation) incurred by any of them in connection with or as a
result of any act, or failure to act, by ADA, its affiliates, directors,
officers, employees, agents, servants or representatives in the performance of
this Agreement or any breach by ADA of this Agreement; provided, however, that
such indemnity shall not extend to any claim, loss, liability or expense
resulting from the negligence or willful misconduct of the party to be
indemnified or to any incidental or consequential damage suffered by such party
(other than personal injuries).
VHA agrees to indemnify ADA, its affiliates, directors
officers, employees, agents, servants and representatives, upon demand for and
against any claim, loss, liability or expense
33
(including reasonable attorneys' fees and other reasonable expenses of
litigation) incurred by ADA in connection with or as a result of any act, or
failure to act, by VHA, its affiliates, directors, officers, employees, agents,
servants or representatives in the performance of this Agreement or any breach
by VHA of this Agreement; provided, however, that such indemnity shall not
extend to any claim, loss, liability or expense resulting from the negligence or
willful misconduct of any other party or incidental or consequential damages
suffered by such party (other than personal injuries).
(J) Assignment. This Agreement is binding on the parties hereto and
shall inure to the benefit of and be binding upon the successors and assigns of
the parties. Neither this Agreement nor either party's rights and obligations
under this Agreement may be delegated, assigned, pledged or encumbered without
the prior written consent of the other party. For purposes of this paragraph,
any transfer, sale, merger or consolidation of ADA, or a substantial portion of
ADA's assets, whether by contract, agreement or operation of law, shall be
deemed an assignment and require the prior written consent of VHA.
(K) Entire Agreement, Modification, Amendment, Waiver. This Agreement
constitutes the entire agreement between the parties. No modification, amendment
or waiver of any provision of this Agreement will be effective unless approved
in writing by VHA and ADA. The failure of VHA, any Designated Member or ADA at
any time to enforce any provision of this Agreement will not be construed as a
waiver of such provision and will not affect the right of VHA, the Designated
Members or ADA thereafter to enforce each and every provision of this Agreement
in accordance with its terms.
(L) Choice of Law. In the event of any dispute between VHA and ADA,
this Agreement shall be governed by the internal laws of the state of Texas. Any
dispute between ADA and a
34
Designated Member shall be construed in accordance with the local laws of the
location of such Designated Member.
(M) Third-Party Beneficiaries. The Designated Members are intended
third-party beneficiaries hereunder and may enforce any of the terms of this
Agreement against ADA.
(N) Severability. If this Agreement, or any one or more of the
provisions hereof, shall be held invalid, illegal or unenforceable within any
governmental jurisdiction or subdivision thereof, this Agreement or any such
provision or provisions shall not, as a consequence thereof, be deemed to be
invalid, illegal or unenforceable in any other governmental jurisdiction or
subdivision thereof. If any provisions in this Agreement shall be held invalid,
illegal or unenforceable, such invalidity, illegality or unenforceability shall
not affect any other provision of this Agreement; this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein, and there shall be deemed substituted such other provision as
will most nearly accomplish the intent of the parties to the extent permitted by
applicable law.
(O) Authority. Each party represents that the execution, delivery and
performance of this Agreement have been duly authorized by all required action
on such party's part, that such party has the full power to make and perform
this Agreement and that this Agreement constitutes the legal, valid and binding
obligation of such party, enforceable in accordance with its terms.
(P) Force Majeure. ADA shall be excused for failure to perform
hereunder if failure is caused by fire, shortages of goods caused by national
crisis, unavoidable casualties, acts of God, or any other matters beyond ADA's
control.
(Q) Books and Records, Audit. ADA shall keep, maintain and preserve
complete, current and accurate books, records and accounts of the transactions
contemplated hereby and such
35
additional books, records and accounts as are necessary to establish and verify
ADA's compliance hereunder. All such books, records and accounts shall be
available for inspection and audit by VHA and its authorized representatives at
any time during the term of this Agreement and for two (2) years thereafter, but
no more frequently than twice in any consecutive twelve (12) month period and
only during reasonable business hours and upon reasonable notice. The exercise
by VHA of the right to inspect and audit is without prejudice to any other or
additional rights or remedies of either party hereto.
(R) Market Competitiveness. ADA represents and warrants that the price,
value and quality of products and services delivered to Designated Members
pursuant to this Agreement shall remain market competitive at all times
throughout the term of this Agreement. As competitive situations arise during
the term of this Agreement, it may be necessary for VHA and ADA to mutually
agree on meeting specific competitive situations that are strategically
important to VHA and ADA. In particular with regard to Designated Members'
request for proposal (RFP), VHA and ADA mutually agree to notify each other
within five (5) business days upon receipt of RFP from Designated Member, and
ADA agrees that any response to the RFP shall be in the context of and pursuant
to the terms of this Agreement.
Section 12. Term and Termination.
This Agreement will become effective upon execution as to each
Designated Member to which ADA is distributing products as of the date of this
Agreement. This Agreement will commence on August 20, 1997, and continue in
force until August 19, 2000, unless terminated sooner as provided in this
Section; provided that either party may at any time terminate this Agreement,
with or without cause, by delivering not less than ninety (90) days prior
written notice
36
thereof to the other party; and provided that VHA may terminate this Agreement,
in whole or in part, upon thirty (30) days written notice in the event of any
breach or non-performance by ADA, provided ADA has not cured the breach within
said thirty (30) days. This Agreement may be extended for up to two (2)
additional one (1) year terms upon mutual written agreement of the parties.
Section 13. Notices.
(A) All notices given under any of the provisions of this Agreement
shall be deemed duly given to VHA or the Designated VHA Members and Affiliates
if mailed by registered or certified mail, return receipt requested, to:
VHA Inc.
000 Xxxx Xxx Xxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxx 00000-0000
or to such other address as VHA may designate in writing by notice to ADA as
provided in this Section 13.
(B) All notices given under any of the provisions of this Agreement
shall be deemed duly given to ADA if mailed by registered or certified mail to:
------------------------------------
------------------------------------
------------------------------------
or to such other address as ADA may designate in writing by notice to VHA as
provided in this Section 13.
37
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
VHA Inc. ("VHA")
By: _______________________________
Xxxx XxXxxxx
Vice President
----------------------------------
("Authorized Distribution Agent")
By: ________________________________
Title:_______________________________
38
ADA Agreement
List of Schedules
Schedule Schedule Type
Schedule 1A Designated VHA Member and Affiliates List
Schedule 1B Alternate Site and Care Continuum VHA Members List
Schedule 1C Other Designated Health Care Organizations Assigned by VHA to ADA for Service
Schedule 2 ADA Primary Ordering Location (POL)
Schedule 3 VHA Regional Offices (Area Offices and Regional Health Care Systems)
Schedule 4 VHA PLUS(R)Pricing Policy and Protocol
Schedule 4A VHA PLUS(R)Hospital Exception Level Pricing (HELP Form)
Schedule 4B VHA PLUS(R)Stocking Request Form
Schedule 5 [ADA's Capabilities w.r.t. systems to serve on-line communication among ADA, manufacturer
and HCO]
Schedule 6 Base Bulk Distribution Matrix
Schedule 6A Additional Distribution Service Menu Fee and Definitions
Schedule 6B Modified Activity Based Distribution Cost Matrix
Schedule 6B1 Care Continuum Services Matrix
Schedule 6C Designated Member Distribution Service Fee Calculation and Acknowledgment Form / Base
Distribution Service Fee Change Form (for use with Schedule 6 or 6B)
Schedule 6D Initial Implementation and Ongoing Distribution Services Review
Schedule 6E Designated Member ADA Assignment and Reassignment Form (ADA and Care Continuum ADA
Geographic and Service Capabilities)
Schedule 6F System Definition Pricing Policy and Price Determination Worksheet
Schedule 6F1 Definition of System Pricing for Vertically Integrated Systems/Networks
Schedule 7 Payment Term Options
Schedule 8 Return Goods Policy
Schedule 9 ADA Service Levels / Notification Process / Penalties
Schedule 9A Designated Member Verification of "A" and "Impact" List
Schedule 10 ADA Monthly Reports to Designated Members
Schedule 11 ADA Representative Responsibilities / Designated Member Quarterly Business Review Topics
Schedule 12 ADA Disaster Plan
Schedule 13 ADA Computer Capabilities and Backup Systems
Schedule 14 XXX XXX Capabilities
Schedule 15 ADA Reports to VHA
Schedule 16 Standards of Performance
Schedule 17 List of Aligned Vendors
39
Schedule Schedule Type
Schedule 18 Products On Which ADA Pays No Fee To VHA
Schedule 19 Request for Change of ADA Notification Form
40
SCHEDULE 1A
DESIGNATED VHA MEMBERS AND AFFILIATES
[List of VHA Members and Affiliates assigned to ADA]
41
SCHEDULE 1B
DESIGNATED VHA MEMBERS OR AFFILIATES
Alternate Site and Care Continuum VHA Members List
42
SCHEDULE 1C
Other Designated Health-Care Organizations Assigned by VHA to ADA for Service
43
SCHEDULE 2
ADA Primary Ordering Locations (POLs)
and Designated Members Being Served by Location
44
SCHEDULE 3
VHA REGIONAL OFFICES
[Area Offices and Regional Health Care Systems]
45
SCHEDULE 4
VHA PLUS(R) Pricing Policy and Protocol
The objective of this policy/protocol is to achieve the following:
o Ensure accurate VHA PLUS(R) pricing to VHA health-
care organizations ("HCOs") in a timely manner,
o Provide traceability and accountability of VHA
PLUS(R) pricing,
o Centralize VHA PLUS(R) pricing decisions and
o Effectively communicate all price revisions.
TIERED OR HOSPITAL EXCEPTION LEVEL PRICING
In the event that it becomes necessary to deviate from the published
pricing for any VHA PLUS(R) medical/surgical product, the following protocol is
to be observed:
1) The VHA PLUS(R) manufacturer, in conjunction with the
appropriate VHA Account Manager, will communicate a request
for tier revision or hospital exception level pricing to the
VHA Medical/Surgical Business Unit ("MSBU") Product Management
on a VHA PLUS(R) HOSPITAL EXCEPTION LEVEL PRICING (HELP) form
(attached).
2) The VHA PLUS(R) Product Manager/Analyst will review requests.
3) The VHA PLUS(R) Product Manager/Analyst will
approve/disapprove requests.
4) The VHA Distribution Services Analyst will telefax approved
VHA PLUS(R) HELP forms to the ADA, and revised pricing will be
available to the HCO in seven (7) working days.
5) The ADA will communicate back to the VHA Distribution Services
Analyst in writing confirming the date entered into the ADA
system.
6) All approved VHA PLUS(R) HELP requests will be on file with
the VHA Distribution Services Analyst for future reference.
46
SCHEDULE 4A
VHA PLUS(R)
HOSPITAL EXCEPTION LEVEL PRICING
(H.E.L.P. FORM)
VHA Hospital:
-----------------------------------------------------------------
VHA LIC #:
-----------------------------------------------------------------
Address:
-----------------------------------------------------------------
City/State/Zip:
-----------------------------------------------------------------
Contract #:
-----------------------------------------------------------------
Current Price Tier: New Price Tier:
------------------- ------------------------
Effective Date: Review Date:
----------------------- ---------------------------
(For Office Use Only)
CAT NO DESCRIPTION ADA HOSP USAGE USAGE
================ ====================================================== ============== ============= ============== ===========
Submitted By:___________________________________________________________________
SIGNATURE DATE
VHA PLUS(R) Product Management:_________________________________________________
SIGNATURE DATE
ADA Contracts Personnel:________________________________________________________
SIGNATURE DATE
Return copy to Distribution Analyst-VHA
Fax (000) 000-0000
Note: 60-day price change notification is required to the ADA.
47
SCHEDULE 4B
VHA PLUS(R) Stocking Request Form
[INSERT -- Xxx Xxxxx to provide]
48
SCHEDULE 5
[ADA's capabilities w.r.t. systems to serve on-line communication
among ADA, manufacturer and HCO.]
49
SCHEDULE 6 - DISTRIBUTION SERVICES FEE - BASE BULK MATRIX
Monthly Volume Gross Aligned Gross Nonaligned Weekly Deliveries Line Average
Fee for Fee Incentive
Distribution for Distribution
Services Services
$0 - 7,500 [*] [*] 1 Delivery per week [*]
$7,501 - 25,000 [*] [*] 1 Delivery per week [*]
$25,001 - 75,000 [*] [*] 2 Deliveries per week [*]
$75,001 - 150,000 [*] [*] 2 Deliveries per week [*]
$150,001 - 250,000 [*] [*] 2 Deliveries per week [*]
$250,001 - 400,000 [*] [*] 2 Deliveries per week [*]
$400,001 - 600,000 [*] [*] 3 Deliveries per week [*]
$600,001 - 800,000 [*] [*] 3 Deliveries per week [*]
$800,001 [*] [*] 3 Deliveries per week [*]
Monthly Volume [*]EOE Net Aligned Fee for Net Nonaligned Fee
Incentive Distribution for Distribution
Services Services
$0 - 7,500 [*] [*] [*]
$7,501 - 25,000 [*] [*] [*]
$25,001 - 75,000 [*] [*] [*]
$75,001 - 150,000 [*] [*] [*]
$150,001 - 250,000 [*] [*] [*]
$250,001 - 400,000 [*] [*] [*]
$400,001 - 600,000 [*] [*] [*]
$600,001 - 800,000 [*] [*] [*]
$800,001 [*] [*] [*]
Qualifiers: Base Bulk - Delivery to Dock in Manufacturer's Case Shipment
1) Initial Monthly Volume is determined by previous quarter's actual purchases
and reviewed semiannually thereafter
2) To qualify for EOE incentives, HCO must be [*]EOE for past quarter's
activity and reviewed semiannually thereafter
3) DSO is an add on based on past quarter's activity and reviewed
semiannually thereafter
4) All additional services are based on fees on Schedule 6A, Distribution
Service Fee Matrix
5) To qualify for $Average Line Incentive, Designated Members must average
their required monthly volume qualifier for the previous quarter's
activity (line incentive is calculated by dividing the total monthly
dollar volume by the total number of lines shipped for month), reviewed
semiannually
6) Aligned fee, both Gross and Net, will apply to all SKUs from all VHA
Contract, VHA PLUS(R)and VHA OPPORTUNITY Manufacturers
7) Nonaligned fee, both Gross and Net, will apply to all Nonaligned
Manufacturers SKU's and Noncontract Aligned Manufacturers SKU's that
are stocked locally, but are ordered less than a total of 5 times per
month from ADA's branch. If not stocked locally, then Noncontract
Aligned low velocity SKUs will be charged Aligned fee + trans.
8) Payment Terms: 1) 15 Day Prepay: [*] 2) Net 0 Days: [*]
3) Standard Terms: [*] purchases due [*] of same month, [*] purchases due [*] of following month
4) Net 30 Days: Add [*] 5) Net 45 Days: Add [*]
6) Net 60 Days: Add [*] 7) Over 60 Days: Add additional [*] for each 15 days beyond
60 days
* [This confidential information has been omitted and filed separately with the
Commission.]
50
Schedule 6A
Additional Distribution Service Fee Menu and Definitions
Distribution Services Distribution Service Fee
1) Customized Invoices 1) [*]
2) Customized Packing Slip 2) [*]
3) Combined Packing Slip and Invoice 3) [*]
4) Custom Pallet Architecture - Basic 4) [*]
5) Custom Pallet Architecture - 5) [*]
Expanded
6) Add Delivery 6) Monthly Vol:
$0-75,000 [*]
$75,001-250,000 [*]
$250,001> [*]
7) Bulk Picked By Department 7) a) 1-3 Departments [*]
Delivered to Dock b) 4-10 Departments [*]
c) 11-15 Departments [*]
d) 16> Departments [*]
8) Bulk Break to Manufacturer Next 8) [*]
Packing Unit (if not usually broken
down)
9) XXX Picked by Department 9) [*]
Delivered to Dock*
10) XXX Picked by Department 10) [*]
Delivered to Department**
11) XXX Picked by Department Put 11) [*]
Stock Away***
12) Affix Patient Label 12) [*]
13) Bar Codes 13) [*]
14) Emergency Deliveries 14) [*]
1) All Distribution Service Fees are additive to the effected activity.
2) Distribution Service Fees # 9, 10 & 11 are additive.
3) Definition of all Distribution Services on Schedule 6A are with this
Schedule.
* [This confidential information has been omitted and filed separately with the
Commission.]
51
SCHEDULE 6A (Page 2 of 5)
ADA Agreement Service Definitions
SERVICE DEFINITIONS:
1) Centralized Billing:
A health-care system is considered to have centralized billing if all
material products and services fees associated with each entity (i.e.,
HCO) of the system are applied to one "xxxx-to" number and all invoice
activity conducted by the supporting ADA is forwarded to one central
accounting address location. Additionally, payments are forwarded to
the ADA in a manner that may reflect individual sub "xxxx-to" (HCO)
purchase activity, but can be processed against the one system wide
"xxxx-to" number.
2) Centralized Ordering:
A health-care system is considered to have centralized ordering if all
product activity for each member HCO in the system is ultimately
consolidated through, as is often the case, one information system
collection point. This action occurs before any individual facility
purchase activity is forwarded to the ADA in the form of a purchase
order. Although ordering activity at the individual HCOs may take place
on various MIS systems, all purchase activity is funneled into one
primary system prior to being released to the ADA.
3) Customized Invoice:
An invoice is considered to be customized by the ADA when the creation
of the invoice requires the ADA to perform actions other than what is
considered standard operating procedure (SOP) in the generation,
delivery and/or processing of the original invoice. An invoice is also
considered to be customized when any additional documentation that is
not part of the ADA's SOP requirement must be created to accompany the
invoice for delivery to the HCO or health-care system. Traditionally,
one standard purchase order received from the customer will
automatically create one standard invoice. Additionally, any
customization required may necessitate an information system
change/enhancement on the part of the ADA.
52
SCHEDULE 6A (Page 3 of 5)
ADA Agreement Service Definitions
4) Customized Packing Slip:
A packing slip is considered to be customized by the ADA when the
creation of the packing slip requires the ADA to perform actions other
than what is considered standard operating procedure (SOP) in the
generation and/or delivery of the packing slip created from an original
purchase order. A packing slip is also considered to be customized when
any additional documentation that is not part of the ADA's SOP
requirement must be created to accompany the packing slip for delivery
to the HCO or health-care system. Traditionally, one standard purchase
order received from the customer will automatically create one standard
packing slip.
5) Customized Packing Slip and Invoice:
Combination of 3) and 4).
6) Extra Deliveries:
VHA organization deliveries are included in their base cost+plus price
based on Schedule 6 or 6B. All additional deliveries are added to the
base cost+plus price and priced according to the Service Fee Menu.
7) Bulk Picked by Department, Delivered to Dock:
VHA organizations segment their orders by their departments, but the
product remains in the original manufacturer's case pack or normal ADA
shipping quantity and is delivered to the organization's dock.
8) XXX Picked by Department, Delivered to Dock:
Same as bulk definition, but the product is broken into lowest unit of
measure from the manufacturer's original case pack.
9) XXX Picked by Department, Delivered to Department:
Same as 8), but the VHA organization's ADA delivers the XXX product
directly to the VHA organization's department area.
53
SCHEDULE 6A (Page 4 of 5)
ADA Agreement Service Definitions
10) XXX Picked by Department, Put Stock Away:
Same as *, but the VHA organization's ADA delivers the XXX product
directly to the VHA organization's department area and actually puts
the product away.
11) Affix Patient Charge Labels:
Covers the cost of the label and the labor to affix the patient charge
label to the product.
12) Bar-Coded Shelf Labels:
ADA creates the bar-coded shelf label and provides them to the VHA
organization for use in central stores, warehouses and departments.
13) Emergency Delivery:
Any delivery after normal business hours, or a delivery that requires
special attention such as use of a courier service, etc.
14) Line Incentive:
Monthly dollar average of lines ordered. Designated Member will be
eligible for incentive if for the previous quarter the lines ordered
average the amount indicated on Schedule 6.
15) Custom Pallet Architecture-Basic:
Attached
16) Custom Pallet Architecture-Expanded:
Attached
54
SCHEDULE 6A (Page 5 of 5)
Custom Pallet Architecture
Custom pallet architecture is separated into two types of services: basic
and expanded. The defined activities included under these two services are:
Custom Pallet Architecture - Basic
- items separated on pallet by department or purchase
order
- items arranged in purchase order input sequence
Custom Pallet Architecture - Expanded
- items palletized in reverse storeroom location
- separate pallet for each department
- separate pallet for nonstock items
- separate pallet for stock items
- pallet clearly marked with description and internal
routing information
The following services are provided free of charge and are not included
in custom pallet architecture:
- box/case labels facing out on pallet
- shrink-wrapped pallets
- pallets arranged to meet health-care organization
weight and/or dimension requirements
55
SCHEDULE 6B
Modified Activity Based Distribution Service Fee
Matrix
Avg. Sales Per Monthly Volume Monthly Volume Monthly Volume Monthly Volume
Line $800,001 $600,001 - $800,000 $400,001 - $600,000 $200,001 - $400,000
Aligned/Non- Aligned Non- Aligned Non- Aligned Non- Aligned Non-
Aligned Fee is Fee Aligned Fee Aligned Fee Aligned Fee Aligned
multiplied to Fee Fee Fee Fee
each line
shipped
Above $551 [*] [*] [*] [*] [*] [*] [*] [*]
$401 - $550 [*] [*] [*] [*] [*] [*] [*] [*]
$201 - $400 [*] [*] [*] [*] [*] [*] [*] [*]
$101 - $200 [*] [*] [*] [*] [*] [*] [*] [*]
$51 - $100 [*] [*] [*] [*] [*] [*] [*] [*]
$26 - $ 50 [*] [*] [*] [*] [*] [*] [*] [*]
$11 - $ 25 [*] [*] [*] [*] [*] [*] [*] [*]
$10 - Below [*] [*] [*] [*] [*] [*] [*] [*]
Deliveries 3 3 3 2
Additional [*] [*] [*] [*]
Delivery Fee
Avg. Sales Per Monthly Volume Monthly Volume
Line $100,001 - $200,000 $0 - $100,000
Aligned/Non- Aligned Non- Aligned Non-
Aligned Fee is Fee Aligned Fee Aligned
multiplied to Fee Fee
each line
shipped
Above $551 [*] [*] [*] [*]
$401 - $550 [*] [*] [*] [*]
$201 - $400 [*] [*] [*] [*]
$101 - $200 [*] [*] [*] [*]
$51 - $100 [*] [*] [*] [*]
$26 - $ 50 [*] [*] [*] [*]
$11 - $ 25 [*] [*] [*] [*]
$10 - Below [*] [*] [*] [*]
Deliveries 2 2
Additional
Delivery Fee [*] [*]
1) All orders are placed EOE
2) HCO must be able to communicate 810/832
3) Above Fees are inclusive of Fees # 7, 8 and 9 from Schedule 6A
4) Fee is Separate Line Item Charge on Invoice, based on the percent
charged to dollar volume of the line(line average is determined
previous quarters line average, total lines shipped divided by total
dollars of lines shipped) reviewed semiannually
5) Product is billed at actual product cost
6) Aligned Fee will apply to all items from VHA Contract, VHA PLUS(R), and
VHA OPPORTUNITY Manufacturers and All Aligned NonContract Manufacturers
items that are ordered more than 5 times per month from ADA's branch.
Noncontract Aligned low velocity SKU's (ordered less than 5 times per
month) & stocked locally will have the NonAligned charge applied, if
not stocked locally, then the Aligned charge will apply +
transportation charges
7) NonAligned Fee applies to all NonAligned Manufacturers SKUs and
NonContract Aligned Manufacturers SKUs that are ordered less than 5
times per month from ADA's branch
8) Payment Terms: 1) 15 Day PrePay: [*] credi2) Net 0 Days: [*] cred3) Standards Terms
Net 30 Days:Add [*] 5) Net 45 Days: Add [*] 6) Net 60 Days: Add [*] 7)Over 60 Days: Add additional
[*] for each 15 days beyond 60 days
* [This confidential information has been omitted and filed separately with the
Commission.]
56
Schedule 6B1
Medical/Surgical Care Continuum Distribution
Price Matrix
--------------------------------------------------------------------------------
VHA Physician Participants
Med/Surg Distribution Monthly Volume Monthly Volume Monthly Volume
Channel
$0 - $4,999 $5,000 - $9,999 $10,000+
Aligned [*] [*] [*]
Nonaligned [*] [*] [*]
NOTES: o Cost+Plus fee is inclusive of the VHA fee.
o Matrix applies to owned/controlled alternate site
facilities credentialed into VHA membership (OHCP) or
VHA PhysicianLINK Services(sm) participants
(strategically important "linked" physician
practices).
o To avoid two costs in the HCO information system, the
difference in cost+plus between an acute care slot
and care continuum slot can be applied as a service
charge to all care continuum sales.
o Delivery to dock, one shipment per week.
VHA Care Continuum Participants: Home Care - Long-Term Care
Med/Surg Distribution Monthly Volume Monthly Volume Monthly Volume Monthly Volume
Channel
$0-9,999 $10,000-24,999 $25,000-39,999 $40,000+
Aligned [*] [*] [*] [*]
Nonaligned [*] [*] [*] [*]
NOTES: o Cost+Plus fee to designated care continuum
participant is inclusive of the VHA fee.
o Monthly purchase volumes will be combined for all
sites utilizing a central ordering, billing,
selling and shipping point.
o Cost+Plus matrix applies to both the Acute-Care
Authorized Distribution Agents (ADA) and the Care
Continuum (CC) Authorized Distribution Agents (VHA
ADA).
o Delivery to dock, two deliveries per week.
o Matrix applies to owned/controlled alternate site
facilities credentialed into VHA membership (OHCP).
o To avoid two costs in the HCO information system, the
difference in cost+plus between an acute care slot
and care continuum slot can be applied as a service
charge to all care continuum sales.
o Due to cost of distributing Adult Briefs and
Nutritionals, these two items will be locally
negotiated.
* [This confidential information has been omitted and filed separately with the
Commission.]
57
SCHEDULE 6C
Designated VHA Member Distribution Service Fee Calculation and Acknowledgment
Form / Distribution Service Fee Change Form for Schedule 6 Base Bulk
Distribution Matrix and Schedule 6B Modified Activity Based Cost Matrix
Designated Member: _______________________________
Address: _______________________________
_______________________________
_______________________________
_______________________________
VHA Lic. #: _______________________________
Phone #: _______________________________
Fax #: _______________________________
Director of Materials Management: _________________________________
Date: _________________________________
Declared ADA: _________________________________
Fill out this section is using Schedule 6 Base Bulk Distribution Matrix:
1) Previous quarters monthly volume average: _____________________
2) Base volume service fee from Schedule 6:
- Gross Aligned: _____________________
- Gross NonAligned: _____________________
3) Incentives Earned:
a) EOE [*]: -_____________________
b) Line Avg: -_____________________
4) DSO Performance: -/+____________________
5) Extra Services Required:
a) Customized Invoice [*] +_____________________
b) Customized Packing Slip [*] +_____________________
c) Combined Packing Slip & Invoice [*] +_____________________
d) Custom Pallet Architecture Basic [*] +_____________________
e) Custom Pallet Architecture Expanded [*] +_____________________
f) Extra Weekly Deliveries (each) (see sched 6A) -/+____________________
g) Bulk Picked by Depart. Del. to Dock:
- 1-3 Departments [*] +_____________________
- 4-10 Departments [*] +_____________________
- 11-15 Departments [*] +_____________________
- 16> Departments [*] +_____________________
h) Bulk Break to Manufacturer Next
Packing Unit [*] +_____________________
I) XXX Picked by Depart.
Del. to Dock* [*] +_____________________
j) XXX Picked by Depart.
Del. to Depart.* [*] +_____________________
k) XXX Picked by Depart.
Del. and Put Stock Away* [*] +_____________________
6) Total Aligned / NonAligned Net Distribution
Service Fees:
- Net Aligned: ______________________
- Net NonAligned: ______________________
o New (check) o Change (check)
*[This confidential information has been omitted and filed separately with the
Commission.]
58
SCHEDULE 6C
Fill out this section if using Schedule 6B Modified Activity Based Cost Matrix:
1) Previous quarter month volume average: _______________________
2) Line $ average for previous quarter: _______________________
3) GrossAligned Fee based on Line $ average and monthly volume _______________________
4) GrossNonAligned Fee based on Line $ average and monthly volume_______________________
5) DSO Performance: _______________________
6) Extra Services Required:
a) Customized Invoice [*] +______________________
b) Customized Packing Slip [*] +______________________
c) Customized Packing Slip & Invoice [*] +______________________
d) Customized Pallet Architecture Basic [*] +______________________
e) Customized Pallet Architecture Expanded [*] +______________________
f) Extra weekly deliveries (each) (see sched 6A) +______________________
g) Bulk Picked by Depart. Del. To Dock:
- 1-3 Departments [*] +______________________
- 4-10 Departments [*] +______________________
- 11-15 Departments[*] +______________________
- 16> Departments[*] +______________________
h) Delivered and Put Stock Away* [*] +______________________
7) Total Net Aligned / NonAligned Net Distribution Service Fees:
- Net Aligned: _______________________
- Net NonAligned: _______________________
Please note pricing option chosen must be used for a one year minimum time
period, Designated Member may chose to change pricing option during the
7/15-8/31 review period of each year.
VHA Account Manager Date
----------------------------------------------------------------
ADA Representative Date
----------------------------------------------------------------
Director of Materials Management Date
----------------------------------------------------------------
Please return to VHA Distribution Services via Fax @: (000) 000-0000.
* [This confidential information has been omitted and filed separately with the
Commission.]
59
SCHEDULE 6D
Initial Implementation and Ongoing Distribution Services Review
Initial Implementation:
1) VHA will send to each Designated Member a letter indicating the terms
of the Redesigned ADA Agreement that are being implemented.
2) The letter will include a Redesigned ADA Agreement Launch Package which
will provide details of the Redesigned ADA Agreement, Designated
Members Assignment and Reassignment Form (Schedule 6E), Designated
Member Distribution Service Fee Calculation and Acknowledgment Form /
Base Activity Based Costing Distribution Service Fee Change Form
(Schedule 6C), Base Distribution Service Fee Matrix and Modified
Activity Based Distribution Cost Matrix (Schedules 6 and 6B),
Designated Member Care Continuum ADA Selection Form (Schedule 6E1).
3) Each Designated Member is to completely review all the information
provided in steps 1 and 2 and completely
fill out Schedule 6E, Schedule 6E1 or Schedule 6C.
4) Mail or FAX back to VHA Distribution Services, c/o VHA Inc., 000 Xxxx
Xxx Xxxxxxx Xxxxxxxxx, Xxxxxx, XX
00000 (FAX Number: 972/830/0212).
5) All data needs to be received by VHA Distribution Services by
October 31,1997.
6) If Designated Member is requesting a change of ADAs, actual
implementation date for steps 3 and 4 will vary
based on the issues driving the request for change.
7) If Designated Member is not requesting a change of ADAs, the new
pricing as indicated by Designated Member on Schedule 6 or 6B will go
into effect on December 1, 1997.
Semiannually
Beginning with the end of the first six months of calendar year 1998
and for each six (6) month period thereafter for the term of this Agreement,
VHA, using ADA data, will review each VHA Designated Member Distribution Service
Fee activity. Review periods will be as follows:
Review Period Review
o 1/1 - 6/30 o 7/15 - 8/31
o 7/1 - 12/31 o 1/15 - 2/28
VHA will review the following Designated Member activity:
a) Each six (6) month period thereafter volume purchases from
ADA, excluding equipment
b) Actual manufacturers and products purchased for assessment of
proper pricing based on the use of
Aligned/Nonaligned manufacturers pricing
c) [*] EOE Compliance and Incentive Eligibility
d) Additional services accessed and fees being paid
e) DSO for payment activity to determine the need to change DSO
add ons or deducts
f) Average line order and incentive eligibility
Upon review, VHA will determine any changes to Designated Member
Schedule 6C and send changes to both ADA and Designated Member for review. If no
revisions are necessary from ADA and/or Designated Member, then the changes
initiated by VHA will go into effect thirty (30) days from FedEx mailing to ADA
and Designated Member. If ADA and/or Designated Member makes revisions to the
Schedule 6C sent by VHA, and upon mutual acceptance of revisions by Designated
Member, ADA and VHA, VHA will adjust the Schedule 6C and re-FedEx to ADA and
Designated Member; and these changes will go into effect thirty (30) days from
notice by VHA. There will be no credits issued for previous period's
performance.
* [This confidential information has been omitted and filed separately with the
Commission.]
60
Schedule 6E
Designated Member ADA Assignment, Reassignment
Distribution Services Fee Choice Form
ADA and Care Continuum Geographic and Service Capabilities Listings
Reassignment:
Beginning in 1995, each Designated VHA Member or Affiliate had the
opportunity to declare a Authorized Distribution Agent from those serving your
marketplace. At that time (Name of Designated VHA Member or Affiliate) declared
(Name of ADA Declared).
To locate the ADAs now serving your market place, please refer to the
Launch Package. You are being reassigned to (Name of ADA Declared). If you have
a specific issue that requires (Name of Designated VHA Member or Affiliate) to
initiate a request for change of ADA for either service or strategic reasons,
please indicate that need on this form. If no such indication is made by (Name
of Designated VHA Member or Affiliate), (ADA Name) will be your ADA for the term
of this Agreement.
Designated VHA Member or Affiliate: _____________________________
Address: _____________________________
_____________________________
_____________________________
Director of Materials Management: _____________________________
Phone Number: _____________________________
Fax Number: _____________________________
I need to initiate a request for change of ADA Yes______ No________
The reason is: Services______ Strategic_______
If Yes, Why:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Director of Materials Management Signature: ____________________________________
Date: ____________________________________
Please return to VHA Distribution Services via Fax: (000-000-0000)
Assignment:
The ADA that (Name of Designated Member) declared as their ADA in 1995
is no longer authorized to serve this marketplace. The ADAs now authorized to
serve (Name of Designated Member) marketplace are:
o 1)__________________________________
o 2)__________________________________
o 3)__________________________________
o 4)__________________________________
Please check the ADA that (Name of Designated Member) is declaring as their ADA.
Designated Member is declaring VHA as their GPO/Alliance of Choice for products
and distribution services.
Director of Materials Management Signature: ____________________________________
Date: ____________________________________
61
Schedule 6E
In addition to the reassignment/assignment process for each Designated
Member, if needed, the Designated Member may need to declare a continuum of care
ADA from those who serve your marketplace. The acute care ADA can be your
continuum of care ADA if they are capable of serving the continuum of care or
you can designaate a separate ADA to serve the continuum of care. Please
indicate your choice of ADAs to serve your continuum of care (a list of ADA's
capabilities to serve the continuum of care is located in Schedule 6E1):
Continuum of Care ADA: ____________________________________________
Distribution Service Fee Choice Form:
VHA is offering each Designated Member a choice of two pricing options
for their Distribution Service Fee. These choices are found in Schedule 6 Base
Bulk Distribution Matrix or Schedule 6B Modified Activity Based Distribution
Cost Matrix. Please indicate which pricing option Designated Member is declaring
by checking the appropriate box below. Each Designated Member is required to use
their declared pricing option for a period of not less than one year. At the
conclusion of each year of use of declared pricing option Designated Member will
have the opportunity to re-declare their current pricing option or to the option
they are currently not accessing. The Distribution Service Fee options are:
o Schedule 6 - Base Bulk Distribution Matrix
o Schedule 6B - Modified Activity Based Distribution Cost Matrix
Other Information:
- If Designated Member chooses not to use ADA's order entry system, which
is offered at no charge, and declares to communicate with ADA in other
ways, and the alternative process adds cost to the ADA's operations,
Designated Member is responsible for all additional costs above [*] per
month (i.e., van services).
- Designated Member agrees to notify ADA of all invoice/pricing
discrepancies within thirty (30) days of receipt of invoice from ADA
- Designated Member is declaring VHA as their GPO/Alliance of choice.
Please return to VHA Distribution Services via Fax: (000) 000-0000.
Director of Materials Management _______________________________________________
(Signature)
Date: _______________________________________________
* [This confidential information has been omitted and filed separately with the
Commission.]
62
Schedule 6E
Designated Member ADA Reassignment and Assignment and Pricing Option Form
ADA and Care Continuum ADA Geographic and Service Capabilities
ADA Acute Care Physician Service Surgery Center Ambulatory Care
Service Service Service
O&M Yes - National Yes - Contact Yes - Contact Yes - Contact
Branch for Branch for Branch for
Specifics Specifics Specifics
Allegiance Yes - National Yes - Via Yes - Via Yes - Via
Teleservices Teleservices Teleservices
Bergen Medical Yes - National Yes - National Yes - National Yes - National
Limited in
Several Areas-
Attached
General Medical Yes - National Yes - National Yes - National Yes - National
Xxxxxxx Yes - Regional Yes - Regional Yes - Regional Yes - Regional
Shared Services Yes - Regional Yes - Regional Yes - Regional Yes - Regional
Caligor Medical Yes - Regional Yes - Regional Yes - Regional Yes - Regional
Cardinal Xxxx Yes - Regional Yes - Regional Yes - Regional Yes - Regional
ADA Home Health Long Term Care Comments
Care Service Service
O&M Yes - Only to the Yes - Contact Alternate Site
Home Health Branch for Capabilities need
Agency -Not the Specifics to be verified by
Home Customer each member
prior to declaring
O&M
Allegiance Yes - Via Yes - Via Same as O&M
Teleservices to Teleservices
the Home Health
Agency
Bergen Medical Yes - National, Yes - National Acute Care
Only to the Home Capabilities need
Health Agency to be verified
General Medical Yes - National, Yes - National Provides Service
Only to the Home to all areas
Health Agency
Xxxxxxx Yes - Regional, Yes - Regional Provides Service
Only to the Home to all Regional
Health Agency Areas
Shared Services Yes - Regional, Yes - Regional Provides Service
Only to the Home to all Regional
Health Agency Areas
Caligor Medical Yes - Regional Yes - Regional Regional Service
Competencies
Attached
Cardinal Xxxx Yes - Regional Yes - Regional Regional Service
Competencies
Attached
Note: PSS will provide Distribution Services under this Agreement to
Alternate Site entities of Designated Members.
63
SCHEDULE 6F (Page 1 of 2)
System Definition Pricing Protocol and Pricing Matrices
The following system and network definition and price scenario is for
acute-care systems and networks. Systems cannot add their other health-care
provider sites' volume into the pricing equation. Designated Members that are
not part of a system/network as defined below will otherwise be charged
Distribution Services Fees in accordance with the Agreement.
*1) If VHA Shareholder(s)/Partner(s) form a system/network, and
the Designated Members provides one centralized ordering
process, one centralized billing process, one centralized
call point and one centralized delivery point the Designated
Member may combine its dollar volume and be slotted according
to its actual combined volume. Pricing will be determined by
using Schedule 6 Base Bulk Distribution Matrix System/Network
Matrix or Schedule 6B Modified Activity Based Distribution
Cost Matrix. Additional distribution services will be applied
according to the feeds on Schedule 6A
*2) For all other systems/networks that do not fit the above
description, these systems/networks will blend their volumes,
using the Blending Worksheet from Schedule 6F and the pricing
offered on either Schedule 6 or 6B. Additional distribution
Services will be charged according to the fees on Schedule 6A.
3) For free-standing VHA HCO's, systems and/or networks that
need to develop a different type of relationship with their
ADA partner, the VHA HCO, ADA and VHA will work together to
develop the relationship outside of the existing matrix
concept. Examples of this are Fee-For-Service, Activity Based
Costing, Cost Management programs. No ADA can enter into an
off-matrix program pursuant to this Agreement without prior
approval from VHA. Programs that disadvantage VHA contracts,
VHA PLUS(R)or VHA OPPORTUNITY products or programs are not
permitted under this schedule and/or Agreement.
* From implementation date of this Agreement to June 30, 1998,
all current systems/networks already slotted under the former
definitions of the ADA Agreement that this ADA Agreement is
replacing will be grandfathered. As of July 1, 1998 all
systems will be held to the definitions for pricing of
systems/networks of this Agreement. Any system/network that
wishes to be recognized from implementation date of this
Agreement and going forward will be slotted according to the
terms and conditions of this schedule and Agreement.
64
Schedule 6F (Page 2 of 2)
System/Network Definition Pricing Policy and Price Determination Worksheet
System Name:
(1) (2) (3) (4) (5) (6) (7)
Facility Names Cities Monthly DSO Net Aligned Price Net NonAligned Monthly Distribution Charge:
Volume from Schedule 6, Price from {3X5} + {3X6} = Net Xxxxxxxxx
0X xx 0X0 Schedule 6, 6B or Blended System/Network
6B1
Divide total for Column (7)___________________ by total for Column (3)
__________________. The result is the system base blended
cost+plus_____________________.
Monthly Volume, DSO, EOE Incentive earned, Line $ Average Incentive earned, will
be reviewed semi-annually and the Blended System Base fee will be adjusted
accordingly.
65
SCHEDULE 6F1
Definition of System Pricing for Vertically Integrated Systems/Networks
The following are definitions of the criteria necessary for accessing
vertically integrated system pricing for acute and non-acute sites. All entities
of these systems are controlled (owned, managed or leased) by the sponsoring
Designated Member.
SYSTEM 1: System PROVIDES one centralized ordering, billing, shipping and call
point for all sites of care and UTILIZES ONE distributor (ADA) for the entire
system: all volumes (acute and non-acute) combined for pricing of distribution
services located in Schedule 6, Base Bulk Distribution Matrix, or Schedule 6B,
Modified Activity Based Matrix for acute sites of care and actual cost for
non-acute sites of care. Additional distribution services to any sites of care
will be applied according to Schedule 6A.
SYSTEM 2: System DOES NOT PROVIDE one centralized ordering, billing, shipping
and call point for all sites of care, but UTILIZES ONE distributor (ADA) for the
entire system: all volumes are blended using Blending Worksheet Schedule 6F;
pricing is located in Schedules 6, 6B and 6B1. Additional distribution services
to any sites of care will be applied according to Schedule 6A. The ADA will
charge the actual cost of the delivery to all non-acute care sites in the
system.
System 3: System PROVIDES one centralized ordering, billing, shipping and call
point for all sites of care, but UTILIZES ONE OR MORE distributors (Care
Continuum - ADA) for the non-acute sites of care: all acute care volumes
combined for acute care pricing located in Schedule 6 or 6B; all non-acute care
volumes for each site-of-care category (i.e., physicians, home care and
long-term care) are combined for site-of-care pricing located in Schedule 6B1.
Additional distribution services to any site of care will be applied according
to Schedule 6A, with the exception of deliveries to the non-acute sites of care,
where the actual cost of delivery will be applied.
System 4: System DOES NOT PROVIDE one centralized ordering, billing, shipping
and call point for all sites of care and UTILIZES ONE OR MORE distributors (Care
Continuum - ADA) for the non-acute sites of care: all acute care volumes blended
using the Blending Worksheet Schedule 6F. All non-acute care volumes for each
site-of-care category (i.e., physicians, home care and long-term care) are
blended by each ADA for each site-of-care category and priced based on pricing
located in Schedule 6B1 using blended worksheet Schedule 6F. Additional charges
to all sites of care will be billed according to Schedule 6A. Deliveries to
non-acute sites of care will be charged the actual cost of the delivery.
66
SCHEDULE 7
Payment Terms Options
Each Designated Member shall select from the following payment options
(all deductions or additions are made to the Base Distribution Service Fee on
the price matrix for that Designated Member):
_______ 15-day prepay: [*] credit
_______ Net 0 days: [*] credit
_______ Standard terms: [*] purchases due [*] of same month
[*] purchases due [*] of following month
_______ Net 30 days: Add [*]
_______ Net 45 days: Add [*]
_______ Net 60 days: Add [*]
_______ Over 60 days: Add additional [*] for each 15 days beyond
60 days
All invoice terms run from the date of invoice. Credit for prepay shall
be no more than the percent of the amount on deposit with ADA, not the percent
of the total monthly/quarterly purchases.
Taxes, where applicable, will be added to the invoice price of
products.
No Designated Member can be put on credit hold by their ADA without the
ADA notifying the Designated Member and VHA in writing fifteen (15) days prior
to credit hold. VHA and the ADA will work collectively to remedy the issue with
the Designated Member prior to loss of credit privileges. If credit privileges
are rescinded to the Designated Member, then the Designated Member is entitled
to continue to purchase their products and services from the ADA on a C.O.D.
basis.
DSO is reviewed quarterly, and all adjustments to the Base Distribution
Service Fee will be made only on a quarterly basis. The DSO will be determined
by the previous quarter's average DSO, excluding any disputed portions of
invoices noted by the Designated Member as in discrepancy. No Designated Members
will be charged a higher cost+plus for DSO due to invoices that are in dispute.
All invoice disputes need to be reported by Designated Member to the ADA by the
Designated Member or Affiliate within thirty (30) business days of receipt of
the invoice. Disputed invoices on which Designated Member notified ADA of
item(s) in dispute are not subject to late fees or penalties during the
resolution of the dispute. At resolution of dispute, late fees or penalties
applicable may be applied if Designated Member was not justified in disputing
item(s) on invoice.
A service charge may be added by the ADA to the Designated Member's
monthly outstanding balance of the lesser of 1.5% (18% annually) or the maximum
legally allowable rate by local law, on all invoices not paid within the
agreed-upon payment terms.
* [This confidential information has been omitted and filed separately with the
Commission.]
67
SCHEDULE 8
Return Goods Policy
I. GENERAL
ADA will accept, for full credit based on original
delivered cost, Contract and Noncontract Product(s) originally
purchased from ADA and returned to ADA in original packaging
and in saleable condition within sixty (60) calendar days of
the date delivered by ADA. ADA may assess a 25% restocking
charge for returned product(s) which are damaged or stickered.
ADA will accept for return, saleable and Contract and
Noncontract Product(s) after sixty (60) calendar days, subject
to a 15% restocking charge.
ADA will accept for return, Contract and Noncontract
Product(s) with expired dating or which have been discontinued
by the Vendor, subject to the Vendor's policy. ADA will issue
credit for this product based on the amount credited to ADA by
the Vendor.
ADA shall levy no other restocking or morgue charges.
ADA shall follow Vendor policy for returns in the
event of a product(s) recall. ADA will provide each Designated
Member a copy of the Vendor's policy regarding the recall, if
requested.
ADA will supply, upon request by Designated Member,
the following:
a) A current list of Vendor addresses for the
purpose of obtaining return goods
authorization from the Vendor
b) The names and telephone numbers of the
Vendor representatives able to authorize the
return of product by Designated Member
c) A list of Vendors who levy a restocking
charge on returned product(s) and the amount
of that charge
II. CREDITS
ADA will process Designated Member credits on a daily
basis. All credits should appear on the next statement to
Designated Members, except for credits processed near the end
of the statement period where, because of cutoff dates, the
credit will appear on the following statement.
The Designated Member will receive a copy of the
credit memo within fifteen (15) days after receipt of the
return by ADA's Primary Ordering Location.
ADA will issue credit, within fifteen (15) days, for
outdated or discontinued product(s) being recalled by the
Vendor. In the case of a Vendor recall(s), the Vendor must
have authorized the ADA to issue credit.
ADA will advise Designated Members, by the fifteenth
calendar day of each month, of any credits issued by ADA
during the previous month which remain open.
III. FREIGHT CHARGE ON RETURNED GOODS
68
SCHEDULE 8
ADA vehicles or other prepaid carriers will pick up
all product returns authorized by the Primary Ordering
Location to be returned. Any freight charges incurred by
Designated Members for product returns shipped to the Vendor
will be based on the Vendor's policies.
IV. RETURN OF SHIPPING ERRORS, OVERAGES AND DAMAGED PRODUCT
ADA will authorize, via phone, the return of
product(s) shipped in error. ADA will pick up the product(s)
on ADA's next scheduled delivery to the Designated Member. If
ADA utilizes a common carrier to serve Designated Members, ADA
shall assume the freight charges for the product(s) to be
returned to ADA.
V. ADA WILL NOT ACCEPT RETURNS ON THE FOLLOWING:
a) Any product(s) purchased on a "special order" basis or
contrary to the Vendor's policy;
b) Any sterile product(s) or refrigerants, unless properly
protected;
c) Product(s), apparatus or equipment which has been used,
or is without original packaging, labeling or operating
manuals;
d) Product(s) with labeling or packaging which is
missing, damaged, defaced or other non- saleable
product(s), except as permitted by the Vendor's policy;
e) Seasonal product(s), except according to Vendor's
policy (available on request);
f) Open bottles and partial packages of product(s) will
not be accepted for return, unless the Vendor has
authorized the ADA to accept open bottles and partial
packages;
g) Any product(s) purchased direct from the Vendor.
VI. RETURN PROCEDURE
ADA will accept Contract and Noncontract Product(s)
returned from Designated Members based on the procedure
outlined herein.
a) To receive authorization for the return of product,
Designated Members shall contact the ADA Primary
Ordering Location.
b) Designated Members provide ADA with the following
information, if appropriate: (1) Designated Member
name and account number as they appear on ADA's
invoice.
(2) ADA invoice or order number and date.
(3) The quantity, product number, price paid,
form/size, description. Add lot number,
serial number and expiration date of the
product, as appropriate. NOTE: A copy of
ADA's invoice or packing slip will provide
the required information, as may the price
stickers.
(4) Purchase order number, if applicable.
(5) The reason for return.
c) To assure proper credit and handling, product returns
should be written and packaged for shipment by the
type of product being returned as follows: (1)
Refrigerants
(2) Class II through Class V (items must
meet DEA procedures)
(3) Saleable product(s)
(4) Outdated or discontinued product(s)
(5) Damaged product(s)
(6) Product(s) recalled by Vendor(s)
VII. NOTIFICATION PROCEDURE
ADA agrees to the following notification procedure:
69
SCHEDULE 8
a) Designated Member claims of product shortage, damage
or overage, product(s) with an expiration date
earlier than six (6) months and products delivered in
error, will be reported to ADA in five (5) business
days from date of delivery; scheduled drugs will be
reported in two (2) business days. No restocking
charges apply.
b) In the event of dispute regarding a delivery damage
claim or a product return not received by ADA, a
receipt may be required by ADA prior to issuing
credit and to enable ADA to file a claim with the
carrier.
No hazardous materials will be accepted for return
with the exception of shipping errors and defective
merchandise. Opened, leaking or damaged containers cannot be
returned to the ADA, but should be disposed of in accordance
with applicable laws and regulations. To obtain proper credit,
contact your ADA Customer Service Representative. Return
shipments of hazardous materials must be packed, marked,
labeled and shipped in accordance with DOT regulations
governing the transportation of hazardous materials.
70
Schedule 9
ADA Service Levels/ Notification Process/Penalties
Service Service Level Penalty Notification (check)
Fill Rates: [*] on "A" Items _____________________
[*] on Impact Items _____________________
Invoice Accuracy [*] on all invoices _____________________
Pricing Errors [*] on all invoices - Error Free _____________________
ADA Rep Visit Monthly _____________________
Reports Monthly _____________________
EOE Review Monthly _____________________
DSO Review Monthly _____________________
EDI Review Monthly _____________________
Sales Review Monthly (Contract, Noncontract, VHA PLUS(R) _____________________
Product Usage Aligned, Nonaligned, Low Velocity Manufacturer Review_____________________
Fill Rates:
[*] "A" Items "A" Items are items that move 2x a month
HCO must approve their "A" Item list annually by
March 15 and if items to list change, they need to
give ADA thirty (30) day notice
All usage and changes to "A" Item list need to be
provided to ADA with thirty (30) day notice
All usage provided must be 10%+ of actual usage
HCO must provide all product numbers to ADA at time
of order All orders need to include correct product
numbers
All orders must be placed during normal ordering
times and prior to published cutoff times
[*] "Impact Products" Each Designated VHA Member is entitled to twenty-five
(25) "Impact Products" as described in Section 6.
Base ADA Services, (E) Fill Rate. All "Impact
Product" Lists must be provided to ADA by March 15 of
each year
Designated Member: ________________________________________________
Address: ________________________________________________
________________________________________________
________________________________________________
________________________________________________
Director of Materials Management
Signature: _________________________________________
Director of Materials Management Name:
(Please Print) _________________________________________
Phone Number: _________________________________________
Fax Number: _________________________________________
ADA Name and Branch Location: __________________________________________________
__________________________________________________
This serves as official thirty (30) day notification that Designated Member
intends to monitor the ADA under Schedule 16 of the VHA Agreement for possible
service performance issues. Specifically, the Designated Member is concerned
with the service checked on this form.
* [This confidential information has been omitted and filed separately with the
Commission.]
71
Penalties for Failure to Perform ADA Responsibilities
1) Failure to Notify VHA and / or Designated Member not less than
forty-five (45) days prior written notice of ADA's intent to perform a
physical inventory at the Primary Ordering Location.
First Time: Written Notice
Second Time: [*]
Third Time: [*]
Fourth and Each Additional
Failure to Notify: [*]
2) Failure to Provide Designated Member with complete order confirmation
within two hours of receipt of order electronically
First Time: Written Notice
Second Time: [*]
Third Time: [*]
Fourth and Each Additional
Failure to Notify: [*]
3) Failure to provide on a quarterly basis by VHA Regional Office and
Distribution Focused Account Manager, Designated Member Uniform
Purchase report, identifying products and categories of products that
are not under contract through VHA, that if the above organizations are
willing to standardize to the ADA can provide above with a reduced cost
of said products for an extended period of time, based on anticipated
usage and participation of the above entities.
First Time: Written Notice
Second Time: [*]
Third Time: [*]
Fourth and Each Additional
Failure to Notify: [*]
4) Failure to maintain a minimum of [*} unadjusted fill rate for "A: Items
and / or [*] unadjusted on Impact Items on for each Designated Member.
Fill rate is defined as line items ordered / line items filled first
time - first truck. "A" Items are stock items that are ordered by
Designated Member as least twice every 30 days.
First Time: Written Notice
Second Time: [*]
Third Time: [*]
Fourth and Each Additional
Failure to Notify: [*]
5) Failure to provide accurate Hospital Reports by the tenth day of the
following month. VHA may modify or change the contents required in
Hospital Reports upon sixth (60) day written notice to the ADA. The ADA
is to provide each Designated Member with the following information in
the monthly report:
- Monthly Sales Reports by VHA Contract, VHA PLUS(R)
and Noncontract Purchases,
Aligned/Nonaligned "A" and Impact Items
- Fill Rates
- EOE, DSO and EDI Activity
- Distribution Service Fees and Activities
- Monthly contract, price, tier or expiration of these
items
* [This confidential information has been omitted and filed separately with the
Commission.]
72
First Time: Written Notice
Second Time: [*]
Third Time: [*]
Fourth and Each Additional
Failure to Notify: [*]
6) Failure to perform member Quarterly Business Review on a quarterly
calendar basis. Each ADA shall meet with each Designated Member to
discuss at a minimum the following issues:
- Quarterly Sales by VHA Contract, VHA PLUS(R), and
Xxxxxxxxxxx Xxxxx
- Xxxx Xxxxx
- Xxxxxxx Xxxxxx
- XXX, XXX and EDI activity
- Quarterly Sales Purchase History for future Base
Distribution Volume Matrix Fee
- Aligned/Nonaligned Manufacturer Activity and
Incentives Taken
- Uniform Purchase Reports
- Standardization and Utilization Reports and
Activities
ADA must notify VHA Account Manager of all schedule QBRs prior to
actual QBR meeting.
First Time: Written Notice
Second Time: [*]
Third Time: [*]
Fourth and Each Additional
Failure to Notify: [*]
7) Failure to provide VHA with two (2) tape reports reflecting the sales
activity for the previous month and a diskette containing the
information required in Attachment 1. Such reports shall be in the
format described in Attachment 1 to this Schedule and shall include:
sales of Contract Products and Noncontract Products by each Designated
Member, fill rate by customer, Base Distribution Service Fee,
additional service fees or charges and description of activity
performed for the charges or fee, compliance to EOE, EDI and DSO to
VHA, no later than the tenth (10) day of each month will result in the
following penalties:
First Time: Written Notice
Second Time: [*]
Third Time: [*]
Fourth and Each Additional
Failure to Notify: [*]
The information required in the diskette shall also be provided in hard
copy format by the tenth of the month.
Beginning on or about March 1997 data for the reports, this information
will be required to be transmitted to VHA via EDI 867. Failure to meet
this technology requirement will result in the following penalties:
First Time: Written Notice
Second Time: [*]
Third Time: [*]
Fourth and Each Additional
Failure to Notify: [*]
In addition ADA shall provide to VHA reports as specified in the
Schedules 6F and 10. VHA may amend this section at any time upon sixty
(60) day written notice to the ADA. Failure to provide the required
tapes, diskettes or information by the deadline shall result in the
following penalty payments to VHA:
*[This confidential information has been omitted and filed separately with the
Commission.]
73
First Time: Written Notice
Second Time: [*]
Third Time: [*]
Fourth and Each Additional
Failure to Notify: [*]
8) Failure to pay VHA Fee when due, ADA shall pay VHA in addition to the
VHA Fee, a late charge of 1.0% per month, or the maximum allowed by
law, whichever is less, on all amounts past due.
9) Failure to deliver all manufacturers tracing and rebate reports to each
manufacturer for Contract Products and Noncontract Products no later
than ten (10) days after the end of the month in which the sales
reported took place, will result in the following payment of penalties:
First Time: Written Notice
Second Time: [*]
Third Time: [*]
Fourth and Each Additional
Failure to Notify: [*]
10) Failure to adhere to the ADA Agreements Return Goods Policy as
described in Schedule 8 will result in the payment of the following
penalties to VHA:
First Time: Written Notice
Second Time: [*]
Third Time: [*]
Fourth and Each Additional
Failure to Notify: [*]
11) Failure to adhere to the required EDI Transaction Sets as described in
Section 8(m)/Schedule 14 will result in the following penalty payment
to VHA:
First Time: Written Notice
Second Time: [*]
Third Time: [*]
Fourth and Each Additional
Failure to Notify: [*]
12) Failure to provide VHA and Designated Member with a list of Products
that have freight included in Cost of Product. Report needs to list
manufacturer, product and amount of freight charges:
First Time: Written Notice
Second Time: [*]
Third Time: [*]
Fourth and Each Additional
Failure to Notify: [*]
* [This confidential information has been omitted and filed separately with the
Commission.]
74
SCHEDULE 9A
Designated Members Verification of "A" List and Impact List Items
Designated Member: ___________________________________
Address: ___________________________________
___________________________________
___________________________________
___________________________________
VHA Lic #: ___________________________________
Phone #: ___________________________________
FAX #: ___________________________________
DMM: ___________________________________
___________________________________ (Designated Member) hereby approves the "A"
and Impact Lists as provided by ___________________________________ (ADA).
Date Reviewed and Approved: ___________________________________
Name: ___________________________________
Title: ___________________________________
Signature: ___________________________________
Copies are to be maintained by: ___________________________________
Designated Member o
ADA o
VHA Account Manager o
VHA Dist. Services o
Please FAX to VHA Distribution Services at 972/830-0212.
75
SCHEDULE 10
ADA Monthly Reports to Designated Members
The following reports shall be delivered to each Designated
Member by the 15th day of the month following the month's activities reflected
in such report. A copy of each Designated Member's report needs to be forwarded
to the appropriate VHA Account Manager at VHA Distribution Services by the 15th
of each month.
1) Fill Rate:
a) "A" Fill Rate - Unadjusted
b) Overall Fill Rate - Unadjusted
c) "Impact Item Fill Rate - Unadjusted
2) Sales reports listing the dollar amount and unit volume of
each and all products purchased
3) Sales of each and all products purchased broken down as
follows:
a) Contract
b) VHA PLUS(R)
c) Noncontract
d) Aligned Manufacturers
e) Non-Aligned Manufacturers
4) EOE %
5) DSO Performance
6) Number of deliveries
7) Additional Distribution Services Performed and the Fees
charged for these services
8) EDI Activity for 810 and 832
9) Contract/Price Change/Tier Change/Expiration Report
(Designated Member specific report on all their
contract/pricing/tier/expiration activity for the next thirty
(30) days)
76
Schedule 11
ADA Representative Responsibilities/Designated Member
Quarterly Business Review Topics
Each ADA will provide each Designated VHA Member or Affiliate assigned
to them with a ADA representative. ADA Representative will be responsible for
the following activities at each assigned Designated VHA Member of Affiliate:
Designated Member ADA Representative Responsibilities
1) Visit on at least monthly basis
2) Address and be empowered to solve the following:
- Fill Rate Issues
- Invoice Accuracy
- Pricing Issues
- Product Stocking issues
- Product Pricing Issues
- Scheduling Issues
- DSO Issues
- EOE Issues
- EDI Issues
- Monthly Dollar Line Ordered Average Issues
3) Review all sales data
4) Assist with Activity Based Costing
5) Logistical needs of the HCO
6) Product acquisition mix
7) Maximizing the value of the incentives offered under Schedule 6
8) Support HCO's initiatives for achieving the lowest total delivered
cost of product and services
Designated Member Quarterly Business Review Topics
Including but not limited to:
1) Review prior quarter's sales by:
a) Contract
b) VHA PLUS(R)
c) Noncontract
d) Aligned Manufacturer
e) Nonaligned Manufacturer
f) Low Velocity Manufacturer and SKUs
2) Review prior quarter's activity for:
a) EOE
b) EDI: 810, 832
c) DSO
d) Monthly Line Average Dollar Amount
3) Review prior quarter's service levels:
a) Fill Rates:
- "A" Items
- Impact Items
- Overall Fill Rate
b) Invoice Accuracy
c) Pricing Errors
d) Return Goods
4) Opportunity for Standardization and Utilization
5) OPPORTUNITY Program Products and Manufacturer Utilization
77
SCHEDULE 12
ADA Disaster Plan
[To be supplied by ADA]
78
SCHEDULE 13
ADA Computer Capabilities and Backup Systems
79
SCHEDULE 14
XXX XXX Capabilities
ADA shall be fully capable of supporting the following electronic data
interchange (EDI) transaction sets in ANSI X 12 format:
To Manufacturer:
850 Purchase Order Purchase Order to Supplier
855 PO Acknowledgment Purchase Order Acknowledgment
810 Invoice Supplier Invoice to ADA
844 Rebate ADA Rebate Claim to Supplier Containing Rebatable Sales
867 Sales Tracing/Rebate Distributor Sales to End Users (relatable and non-relatable) for
submission of rebate claims and marketing information
832 Price Catalog Supplier price catalog to distributor
845 Electronic Contract Notification Supplier contract notification to distributor
856 Advance Shipment Notification Supplier notification of shipment contents before delivery to
distributor
867/849/810 Link Net Billing Distributor is invoiced at best distributor cost less the rebate
amount
867/852/855/861(CRP) Continuous Replenishment Planning (CRP) of distributor
inventory
820 Electronic Fund Transfer Electronic Fund Transfer
To HCO or Receive from the HCO:
850 Purchase Order
855 PO Acknowledgment
810 Invoice
820 Electronic Funds Transfer
832 Price Catalog
856 Advance Shipment Notification
To VHA:
867 SalesTracing/Rebate Distributiion Sales to End Users (relatable and non-relatable)
for submission of rebate claims and marketing information
80
SCHEDULE 15
ADA Reports to VHA
No later than the tenth day of each month, ADA shall deliver to VHA the
two (2) tape reports reflecting the sales activity for the previous month and a
diskette containing the information required in Attachment 1. In addition, ADA
will be required to follow the reporting format and guidelines as detailed in
the VHA Supply Chain Management Information Technology Guidebook. Such reports
shall be in the format described in Attachment 1 to this Schedule 15 and shall
include: sales of Contract Products and Noncontract Products by each Designated
Member, fill rate by customer, Base Distribution Service Fees and total
Distribution Service Fees, including quarterly incentives, earned and paid. The
information required in the diskette shall also be provided in hard copy format
by the tenth of the month.
ADA shall also provide VHA with the following reports by the fifteenth
of each month:
o List of additional services provided to Designated Member
pursuant to Section 7(G)
o List of Contract Vendor back orders for the month. For each
Contract Vendor with back orders, ADA
shall report lines ordered and lines delivered.
All reports to VHA shall be directed to VHA's Distribution Services.
81
Schedule 16 (Page 1 of 2)
Standards of Performance
The following are the Standards of Performance for Manufacturers, ADAs,
Designated Members and VHA to adhere to for the realignment of the Supply
Channel:
Manufacturer to ADA:
Standard Points
1) Cash Discount: 1.0% - 1.5% 3 points
1.6% - 2.0% 5 points
2) EDI:
850 100% 1 point
856 100% 1 point
832 100% 1 point
845/816 100% 1 point
810 100% 1 point
3) Price/Contract Change
Notification 45-60 Days 5 points
4) Fill Rates 95 % 5 points
90-94 % 3 points
85-89 % 2 points
Total 20 points
All the above Standards of Performance are applied to the Aligned Manufacturers
located on Schedule 17.
Phase 1 of implementation of the Standards of Performance for Manufacturers to
Distributors will required a minimum of 9 of 20 points, with a minimum of 3
points coming from Cash Discounts for prompt pay being operational by 6/30/97.
Phase 2 of implementation of the Standards of Performance for Manufacturers to
Distributors will require a minimum of 15 of 20 points, with a minimum of 3
points coming from Cash Discount for prompt pay being operational by 12/31/97.
ADA to Manufacturer: Standard
1) Adhere to all terms and conditions of the
ADA Agreement (i.e., stocking, ordering, etc.) 100%
2) EDI:
850 100%
844 100%
867 100%
820 100%
ADA to Designated Member: Standard
1) [*] Unadjusted Fill Rate on "A" Items 100%
2) [*] Unadjusted Fill Rate on Impact Items 100%
3) 45 Price and Contract Change Notification 100%
4) Designated Member Monthly Activity Report 100%
5) Designated Member/ADA QBR 100%
6) Support Designated Members Electronic Commerce Needs 100%
Designated Member to ADA Standard
1) Pay invoices twice monthly 100%
2) [*] EOE on all orders 100%
3) Standardize on aligned manufacturers 100%
4) Support EDI 810/832 100%
5) Provide accurate product usage for all products,
"A" and Impact Items 100%
6) Sign off on "A" and Impact Item Lists 100%
* [This confidential information has been omitted and filed separately with the
Commission.]
82
Schedule 16 (Page 2 of 2)
ADA to VHA Standard
1) Support and adhere to all terms and conditions
of ADA Agreement 100%
2) EDI 867 100%
VHA to ADA Standard
1) 60-day price/contract change notification 100%
2) Support ADA's electronic commerce needs 100%
3) Support ADA's initiatives with aligned manufacturers 100%
VHA Contract Manufacturer to VHA Standard
1) EDI 845/816 100%
83
Schedule 17
Aligned Manufacturers
Manufacturer Manufacturer Divisions VHA Status
3M a) 3M MedSurg Division a) Contract MS646
b) 3M Orthopedic Division b) Contract MS647
c) 3M Inf. Pumps Cassettes c) Contract MS071
Xxxxxx a) Xxxxxx IV Pumps PCA a) Contract RX120
b) VHA PLUS(R) Suction b) Contract MS137
Canisters
c) Xxxxxx IV Pumps c) Contract MS651
d) Xxxxxx Critical Care Sys. d) Contract CV712
e) Xxxxxx Critical Care e) Contract CV706
f) Xxxxxx IV Sets & Solutions f) Contract RX101
g) VHA PLUS(R)Anesthesia g) Contract RX148
Products I) Noncontract
I) Respiratory
Acme a) VHA PLUS Procedure a) Contract MS101
Tray
Albahealth a) VHA PLUS(R) Patient a) Contract MS145
Slipper
Allegiance a) VHA PLUS(R) Sterile Cust. a) Contract MS124
Trays
b) Non-Sterile Kits b) Contract MS125
c) PBDS c) Contract MS679
d) Surgeon Gloves d) Contract MS676
e) VHA PLUS(R)Hot & Cold e) Contract MS130
Packs
f) Convertors f) Noncontract
g) Respiratory g) Noncontract
American Health Products a) VHA PLUS(R)P-F Exam a) Contract MS142
Gloves
b) VHA PLUS(R) Exam Gloves b) Contract MS133
c) VHA PLUS(R) Synthetic c) Contract MS157
Exam Gloves
Xxxxxx Xxxxx a) VHA PLUS(R) Exam Gloves a) Contract MS074
b) Xxxxxx-Surgical Gloves b) Noncontract
Arrow a) Arrow a) Noncontract
Augustine Medical a) Convective Air Warming a) Contract MS160
AVCOR a) VHA PLUS(R)Velcro a) Contract MS161
Electric Bandages
X. Xxxxx Medical a) X. Xxxxx Anesthesia Trays a) Contract MS682
84
Manufacturer Manufacturer Divisions VHA Status
B. G. Industries 1 a) B. G. Industries a) Contract MS643
B-D a) IV Access & Fluid Mgmt. a) Contract MS604
b) B-D Acute Care b) Contract MS626
c) B-D Vacutainers c) Contract Lab423
d) B-D Division d) Noncontract
Xxxxxxx a) VHA PLUS(R) a) Contract MS690
Antimicrobial Scrub-Foam
Baxter IV Sets & Solutions a) IV Sets & Solutions a) Noncontract
Xxxxx-Xxxx a) Xxxxx-Xxxx a) Noncontract
Bio Clinic a) Bio Clinic a) Contract MS635
Boehringer Mannheim a) Boehringer Mannheim a) Noncontract
X.X. Xxxx/Xxxxx a) Bard Urological a) Contract MS628
b) Davol Suction b) Contract MS658
c) Davol Closed Wound c) Contract MS640
Drain. d) Contract MS112
d) VHA PLUS(R) Irrigation
Trays
Clinipad Corp a) EZ Prep Patient Prep. a) Contract MS689
Systems
b) All other Noncontract b) Noncontract
Concord Portex a) Concord Portex a) Contract RT022
Conmed a) Conmed a) Noncontract
Convatec a) Calgon Wound a) Contract MS670
Management
Xxxxxxxx a) VHA PLUS(R)SDS Solution a) Contract MS110
Critikon a) Critikon a) Contract CE116
Cypress a) VHA PLUS(R)Crutches a) Contract MS150
DeRoyal Industries** a) DeRoyal Sterile CPTs a) Noncontract
b) DeRoyal Softgoods b) Contract MS060
DeRoyal Thermal Products Contract MS060T
c) DeRoyal Trace Pak System c) Contract MS680
d) VHA PLUS Endoscopic d) Contract MS139
Accessories
Xxxxxxx Health a) Xxxxxxx Health a) Noncontract
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1These manufacturers are Aligned and primarily deal with
Equipment which may go through the ADAs. These Aligned Manufacturers'
product lines that are Equipment and go through the ADAs with
individual product line sales of greater than $1,000 will be subject to
local negotiation for price, distribution services, handling and
freight charges, where appropriate.
85
Manufacturer Manufacturer Divisions VHA Status
DSP-World Deknatel a) Deknatel-Chest Drainage a) Contract MS661
Duracell a) Duracell Batteries a) Contact SVC809
E-Z-M a) VHA PLUS(R)Barium a) Contract XR093
b) VHA PLUS(R) UltraSound b) Contract XR094
Gel
Ecolab a) Ecolab Professional a) Contract MS134
Products
b) Ecolab b) Contract HSK300
Gaymar a) Gaymar a) Contract MS075
Graphic Control/Devon a) Graphic Control/Devon a) Noncontract
H&P Industries a) VHA PLUS(R)Wet Pack a) Contract MS135
Products
Heritage Bag a) VHA PLUS(R)Can Liners a) Contract WM010
Hollister a) Hollister a) Contract MS669
Xxxxxx RCI a) Xxxxxx Oxygen (RCI) a) Contract RT021
Intermetro2 a) Intermetro a) Contract CE176
b) Intermetro Industries b) Contract CE013
Intertech Resources a) Intertech Resources a) Contract MS660
Isolyzer a) Isolyzer a) Noncontract
Xxxxxxx & Xxxxxxx a) Ethicon Endo-Surgery a) Contract MS606
(Lifescan - NonAligned) b) Ethicon b) Contract MS607
c) Surgikos c) Noncontract
d) JJMI d) Noncontract
Xxxxxxx a) Xxxxxxx Wound Care a) Contract MS642
b) Xxxxxxx Vascular b) Contract MS609
SCD/XXX c) Contract MS633
c) Xxxxxxx Anesthesia d) Contract MS153
d) VHA PLUS(R)Endotrachael
Tubes&Open Suction
Xxxxxxxx Xxxxx a) Xxxxxxxx Xxxxx a) Contract MS629
King Systems a) King Systems a) Noncontract
Komko a) VHA PLUS(R)Non-Sterile a) Contract MS140
Kits
--------
2These manufacturers are Aligned and primarily deal with
Equipment which may go through the ADAs. These Aligned Manufacturers'
product lines that are Equipment and go through the ADAs with
individual product line sales of greater than $1,000 will be subject to
local negotiation for price, distribution services, handling and
freight charges, where approrpriate.
86
Manufacturer Manufacturer Divisions VHA Status
M.D. Industries a) VHA PLUS(R) Specialty a) Contract MS155
Bags
b) VHA PLUS(R) Sterilization b) Contract MS154
Packing
Mallinckrodt a) Contrast Media a) Noncontract
b) Anesthesia Products b) Noncontract
Maxxim a) CPTs a) Contract MS678
(including Argon) b) VHA PLUS(R)Maxxim Non- b) Contract MS141
Sterile Kit
XxXxx IV Sets & a) IV Sets & Solutions a) Noncontract
Solutions
Medical Action Industries a) VHA PLUS(R)Lap Sponges a) Contract MS107
& O.R. Towels
b) Medical Action b) Contract MS637
c) VHA PLUS(R) O.R. c) Contract MS128
Accessories
d) SBW Medical d) Noncontract
Medline Industries a) VHA PLUS(R) Disposable a) Contract MS158
Pillows
b) Medline Industries DME b) Contract MS692
Midmark3 a) Midmark a) Noncontract
Nellcor Puritan Xxxxxxx a) Nellcor a) Contract CE172
PaperPak a) VHA PLUS(R)Personal a) Contract MS138
Absorbent Products
b) VHA PLUS(R)Adult Incont. b) Contract MS143
Briefs
Xxxxxx Products3 a) Xxxxxx Products a) Contract CE194
Precision Dynamics a) VHA PLUS(R) Identification a) Contract MS146
Bands
Premium Plastics a) VHA PLUS(R)Patient Care a) Contract MS149
Plastics
Xxxxxxx - Xxxxxx a) Infant Diapers a) Contract MS500
Xxxxxx Xxxxxxxxx a) Xxxxxx Xxxxxxxxx a) Contract RX059
Regent a) Regent/Surgical Gloves a) Contract MS663
--------
3These manufacturers are Aligned and primarily deal with
Equipment which may go through the ADAs. These Aligned Manufacturers'
product lines that are Equipment and go through the ADAs with
individual product line sales of greater than $1,000 will be subject to
local negotiation for price, distribution services, handling and
freight charges, where appropriate.
87
Manufacturer Manufacturer Divisions VHA Status
Xxxxxxx Xxxx a) VHA PLUS(R)Skin Staplers a) Contract MS113
Safeskin a) Safeskin Gloves a) Noncontract
Sage Products a) VHA PLUS(R)Sharps a) Contract WM012
Containers/EXT
b) VHA PLUS(R) Specimen b) Contract LAB431
Containers
Xxxxxxxx Xxxxx Xxxx a) Sherwood Medical a) Contract MS644
b) Argyle - Chest Drainage b) Contract MS691
c) Xxxxx Xxxx - Suture c) Noncontract
Xxxxx Industries Medical a) VHA PLUS(R) Core a) Contract MS672
Systems (XXXX) Temperature Monitors
b) Concord Portex b) Contract RT022
c) VHA PLUS(R) Anesthesia c) Contract MS660
Masks & Circuits
Xxxxx Nephew United a) Xxxxx Nephew Wound a) Contract MS671
Management
b) VHA PLUS(R) Skin Care b) Contract MS148
Products
Steris a) Calgon Xxxxxx Skin Care a) Contract MS670
Products
b) VHA PLUS(R) Infection b) Contract MS147
Control Products
Tecnol a) VHA PLUS(R) Surgical a) Contract MS118
Masks
b) VHA PLUS(R) Ice Packs b) Contract MS132
Texfi a) VHA PLUS(R) Elastic a) Contract MS116
Bandages
TIDI a) VHA PLUS(R)Exam Table a) Contract MS156
Paper
b) Exam Paper Products b) Contract MS707
US Surgical a) Endo Mechanical a) Noncontract
b) Sutures b) Noncontract
Valley Labs a) Valley Labs a) Contract CE008
Xxxxx Xxxxx a) Xxxxx Xxxxx a) Noncontract
Vollrath a) Vollrath Stainless Steel a) Contract MS684
Products
Xxxxx Xxxxx, Inc a) Xxxxx Xxxxx, Inc a) Contract CE324
b) Diatek b) Contract CE010
Xxxxxx a) Tourniquet Cuffs a) Contract MS686
b) Thermal Products b) Contract MS687T
88
SCHEDULE 18
Products On Which No VHA Fee Is Due
89
Schedule 19
Request for Change of ADA Notification Form
A Designated VHA Member or Affiliate can change their ADA choice/Assignment
based on two issues:
- Service
- Strategic
For either issue, Designated VHA Member or Affiliate must fill out Schedule 19
and send to VHA Distribution Services. Based on the nature of the request for
change of ADA, the following is the process that will be followed:
Service:
- Schedule 19 sent to VHA, outlining particular service issues
- VHA acknowledges receipt of Designated VHA Member or Affiliates
Schedule 19 and by copy to ADA, notifies the ADA that they have thirty
(30) days to address the service issues raised by the Designated
VHA Member or Affiliate
- VHA Account Manager and Distribution Service Manager/Team Leader for
Medical Surgical Distribution will manage the Request for Change of ADA
- At the conclusion of the thirty (30) day period, the
Designated VHA Member or Affiliate may declare the issues resolved, if
issues are not resolved the choice available is to extend the cure
time period to a mutually agreed upon period time or can ask VHA to
assist them in declaring a new ADA from those that serve that market
place.
Strategic:
- Based on the strategic nature of Designated VHA Member or Affiliate
request, the existing ADA maybe given a specific agreed upon time to
meet the Designated VHA Member or Affiliates strategic needs or VHA
will assist the Designated VHA Member or Affiliate in declaring a
business partner that can meet their distribution needs.
Designated VHA Member or Affiliate Name: ______________________________
Address: ______________________________
______________________________
______________________________
Phone Number: ______________________________
______________________________
Fax Number: ______________________________
Director of Materials Management or Individual
Requesting Change of ADA: ______________________________
Date: ______________________________
90
Reason for Request of Change of ADA Service________Strategic_________
Please provide the specifics for requesting the change of ADA whether it be
Service or Strategic:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Please fax to VHA Distribution Services (000) 000-0000
91
