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Vendor-proof your LIS contract.

Vendor-proof your LIS contract

You have done your research, carefully matching your lab's requirements with the functionality of the laboratory information systems under consideration. You developed an objective way to measure the relative value of each requirement against vendors' ability to provide it. Now that you have made your selection, you can breathe a sigh of relief. Perhaps.

If you will be involved in putting the contract together, your work is only half done. Besides representing an attempt to protect yourself from dishonorable vendors (yes, Virginia, they do exist), constructing a contract will serve as the legal document detailing the vendor's obligations to you, and vice versa. Anything you fail to get in writing now will be extremely difficult, if not impossible, to obtain later.

Reflecting on our laboratory's experiences with LIS vendors, as well as those of other labs with which I am familiar, I would like to propose some key issues in negotiating a contract for a new LIS. * Self-help. Most clients seek the advice of an attorney, perhaps the counsel already retained by their institution, in drafting a contract and participating in subsequent reviews and vendor negotiations. You can help reduce up-front legal fees by taking charge as the contract is developed.

If possible, obtain a copy of a previously negotiated LIS contract and modify it to include items of importance to your laboratory. If your attorney is unable to provide this material, you may be able to obtain something similar from another laboratory's contract on which to base your own version.

After reviewing the contract within your department, you will be able to discuss the contract intelligently with the attorney, having eliminated extraneous legalese and shortened the time (and thus the fees) required for a review by the lawyers. Doing some of the fine tuning of your contract in the early phases of development will also reduce or eliminate additional reviews by the attorney. Specific items to consider include:

[Paragraph]Interfaces and modules. Laboratorians are adept at including specific information about the interfaces we require - for example, analytical instruments by name and type, LIS-to-HIS mainframe, and specifications. Nevertheless, we often overlook the potential costs involved in removing the interfaces if they should fail to perform to expectations or never perform at all.

Require the vendor to reimburse you for any reasonable deinstallation costs involving interfaces that must be removed from the system.(1) Be sure to include physical devices as well as software modules.

Ask yourself how important each interface will be to your system, particularly those to such "foreign systems" as an HIS or a reference laboratory system. For each interface that you consider crucial, negotiate with the vendor for warranties. Stipulate strict penalties if any interface doesn't work.

[Paragraph]RFP. Be sure to incorporate into your contract the vendor's response to your Request for Proposal (RFP) or Request for Information (RFI). Include all performance and functional criteria. Require the vendor to respond in writing to all your future inquiries regarding the system and append these "promises" to the contract as well. This step is especially important to take if the vendor has failed to provide supportive documentation for any significant feature claim that resides elsewhere in the contract.

[Paragraph]Reimbursement. If your system will be used for third-party billing, have the vendor include in the contract a warrantee that the software you will receive is fully compatible with your state reimbursement requirements.

[Paragraph]Performance. Be sure the contract specifies testing and acceptance criteria. Remember that once you have signed off on accepting the system, the burden of proof for any subsequent problems will fall on you. Include the maximum amount of time allowed to the vendor for correcting the problem and how much compensation you will be allowed if a module or system does not work. Consider introducing a "partial acceptance" clause. This added detail will define the minimal criteria for completion of each stage of the installation, for example, or establish on what grounds you will meet the vendor halfway if certain aspects of the system are not installed by a certain date or series of dates.

[Paragraph]Pricing. Try to insist on pricing protection. If you buy both hardware and software from the same vendor, discuss the possibility of having hardware discounts passed on to you.

[Paragraph]Vendor buyout. The contract should contain a clause stating that if the vendor's company is sold to another company with results that in your sole judgment would be adverse to the software you are buying, you will have the right to break the contract at will with reasonable de-installation terms. Keep the contract language general in order to protect yourself against any unforeseen circumstances. * Capacity planning. To make sure the system will be used as efficiently as possible, the vendor should agree to participate in capacity planning. This will range from external capacity, such as the size of the room in which the hardware will reside, to internal capacity, such as primary and secondary storage capability and the number of transactions anticipated over time.

Require the vendor to perform size and capacity calculations and to accept responsibility for them. Obtain the vendor's contractual promise to do walk-throughs of your laboratories and computer room during installation planning.

Insist that the vendor validate your facilities, in writing, for placement of the proposed system, including all ancillary equipment. Remaining in contact with your facility's planning department at all times will keep you aware of any future modeling plans that might affect your LIS; incorporate any such possibilities into the contract, being as specific as possible. * Vendor personnel. Demand the right to review the credentials of the vendor's installation people.(1) Obtain their resumes and, if possible, interview them. Make it clear that you will have the right to refuse to execute the contract if, in your opinion, someone assigned to your installation is underqualified. If the vendor balks at this, state that you want to know exactly whom you will be working with and the extent of their expertise. * Installation staff. Insist that the vendor send the same personnel to your facility throughout the installation period. Experience shows that it's not unusual for a vendor to put its best people on your project at the beginning and then send them to another institution before it's completed. * Vendor expenses. Vendors commonly ask for reimbursement of out-of-pocket expenses incurred during installation. If that's the case with yours, establish a reasonable limit for this cost. One effective way is to ask the vendor's project manager to submit an estimate to you in writing. You then can use this as a guide to capitate the expense cost laid in your contract. * Sole sourcing. If you work in a tax-based, not-for-profit hospital, you may have the additional burden of soliciting competitive bids. Citing your chosen LIS vendor as a "sole source" requires extensive and definitive documentation. This can be an exhausting job, but it's worth the trouble. Keep all such documentation indefinitely.

Obtain documentation showing that the vendor, as a Value Added Remarketer (VAR), will provide the hardware and/or software you need at a competitive price. Since LIS vendors usually work in conjunction with hardware suppliers under contractual agreement, you should have no difficulty in obtaining prices from the hardware/software supplier based on the vendor's proposed equipment and software schedule.

While nothing will guarantee that your installation will go smoothly or that you can prevent all confrontations with your vendor, these suggestions should provide some ideas to use in forging a contract as "vendor-proof" as possible.

(1.) Kudla, K. Tips on overcoming a bad installation. National Report on Computers & Health 10(25): 4-5 Bethesda, Md., United Communications Group, Nov. 27, 1989.

The author is project manager for LIS implementation at Palomar Pomerado Health System in Escondido, Calif.
COPYRIGHT 1990 Nelson Publishing
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1990 Gale, Cengage Learning. All rights reserved.

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Title Annotation:laboratory information system
Author:Macklin, Larry
Publication:Medical Laboratory Observer
Article Type:column
Date:May 1, 1990
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