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GRMC Board of Trustees holds special meeting to approve contracts

Gila Regional Medical Center Board of Trustees held a special meeting this afternoon to approve four contracts. Three dealt with the replacement of the linear accelerator in the Cancer Center. The last was a vote on a replacement to the hospital's contract for pharmaceuticals.

Chief Operating Officer Dan Otero thanked the board for meeting in special session.

"The first contract is with Architecture/Workshop owner Kevin Robinson for design and oversight of the linear accelerator project," Otero said.  "We have gone through the contracting process."

Interim Chief Executive Officer Brian Cunningham said it was a standard contract.

Board member Jeremiah Garcia said the contract listed Robinson's hourly rates through the end of December 2013, but the project was not likely to start until 2014.

"Once the contract is signed, he will have to abide by the rates," said Carrie Young, GRMC chief compliance officer and director of the departments of corporate compliance and risk management.

The contract was approved.

The next contract was the purchase agreement with Varian Medical Systems for the linear accelerator.

Otero said the equipment is funded by the state cigarette tax. "We have about $2.25 million in the fund earmarked for this purpose. About $2.1 million will be for the equipment, and about $906,000 for the extended warranty and maintenance to be paid annually."

"Have we secured the money?" Board Chairman Charles Kelly asked.

"Yes, it has cleared," Otero reported.

Board member Dr. Darrick Nelson asked if the cigarette tax money could be used for the warranty.

Otero said the funding could be used for anything, except training. The unexpended funds would be used for the installation of the equipment.

Young pointed out that the funding was not just for equipment, and additional uses are stipulated in the other contracts.

Board Member Pam Archibald said costs looked like $420,000 over five years.

Garcia asked about the life expectancy for the equipment.

Cunningham said it was 10 plus years, because with more modern equipment, it can be more easily upgraded.

Young pointed out that the linear accelerator being removed is five years old and will be sold, showing it still has value.

Board member Dr. Donald Stinar said he tried to do research on whether the new equipment will have "rapid arc" technology. "Rapid Arc makes a difference in targeting a tumor and the speed with which it operates. I tried calling the company representative, but could not get confirmation. The radiology doctor also didn't know but wanted it."

Otero said that was one of the specs required for the purchase.

Cunningham said the hospital presumes the oncologist in charge of the decision did her due diligence.

"The doctor doesn't know and the representative doesn't know," Stinar said.

Chief Financial Officer Elizabeth Allred said the oncologist told her the equipment was state-of-the art. Otero said he was told the equipment could zoom in and it was fast, in layman's terms. "I will follow up."

"In any case, it will be a major improvement, because we will be able to do things here that we had to send patients to Albuquerque for before," Stinar said.

The purchase agreement was approved.

The third contract was between Gila Regional and the Department of Finance and Administration for the funding grant.

"This is the contract for reimbursement and documentation that needs to be done by both sides," Otero said. "Each of these three contracts is dependent on one another."

Young said the money was already earmarked and ready.

Archibald asked about a clause in the contract about the operating agreement, as well as the requirement for a resolution.

"That's what we're doing now," Otero said.

Young said the resolution had been previously approved.

The contract was approved.

The last contract was a facility commitment agreement with Cardinal Health for pharmaceuticals.

"This is a replacement of the original Cardinal Health agreement," Cunningham said. "We will get a couple of percentage points in savings."

Young said the contract follows New Mexico procurement code for purchases over $30,000. "We stipulated that all contracts will be for four years, so we could limit the evergreen contracts. We do some exceptions and this is one, because it is for five years. We document our exceptions for audit purposes."

The contract was approved. The board went into executive session, and adjourned soon after.

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