HomeMy WebLinkAboutHealthcare Delivery Systems Inc. Inmate Healthcare - 091426 .4 Andy Pernsteiner
JEFFERSON COUNTY SHERIFF
_ _JEPFERSON-
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79 Elkins Road • Port Hadlock, Washington 98339 • (360)-385-3831
MEMORANDUM
TO: File
FROM: David Fortino Chief of Corrections, Jefferson County Sheriffs Office
DATE: September 1, 2026
SUBJECT: Sole Source Justification &Waiver of Competitive Bidding —Jail Medical Services
(RCW 39.04.280)
CONTRACTOR: Healthcare Delivery Systems Inc.
ESTIMATED VALUE: $70,000.00
PROPOSED TERM: 2 Months (July 31,2026—September 30, 2026)
1. PURPOSE &STATUTORY AUTHORITY
This memorandum requests approval to waive competitive bidding requirements pursuant to RCW
39.04.280 and enter into a 2-month sole source contract agreement with Healthcare Delivery
Systems inc. for comprehensive jail medical and health care services.
Under RCW 39.04.280(1), formal competitive bidding requirements may be waived for:
• RCW 39.04.280(1)(a): Purchases that are clearly and legitimately limited to a single source of supply;
• RCW 39.04.280(1)(b): Purchases involving special facilities or market conditions; and/or
• RCW 39.04.280(1)(c): Purchases in the event of an emergency.
2. BACKGROUND & OPERATIONAL NEED
The Jefferson County Jail is mandated under the U.S. Constitution (Eighth and Fourteenth
Amendments) and state law to provide continuous, adequate medical, dental, and behavioral
health care to all incarcerated individuals.
To facilitate a long-term, sustainable service model, the jurisdiction is actively transitioning jail
medical operations to Jefferson County Public Health. This operational transition requires
approximately ninety (60) days to finalize interlocal agreements, onboard clinical personnel, align
medical protocols, and assume administrative oversight.
3. SOLE SOURCE JUSTIFICATION & MARKET EFFORTS
A. History of Prior Bidding Attempts (Single Viable Source)
The County previously issued a formal competitive solicitation (JCSO-2021-1 June 7, 2021) to
secure comprehensive correctional health services. Despite widespread advertisement and
targeted outreach across the regional market, the solicitation failed to attract viable, competing
bidders.
A
Andy Pernsteiner
i sHERIFF 1
, ; . JEFFERSON COUNTY SHERIFF
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79 Elkins Road • Port Hadlock, Washington 98339 • (360)-385-3831
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Correctional health care delivery represents a highly specialized, narrow market with significant
barriers to entry (e.g., licensed clinical staffing in secure environments, 24/7 coverage, specialized
malpractice insurance). As demonstrated by the prior solicitation, Healthcare Delivery Systems Inc
is the only available vendor capable of mobilizing and sustaining these required services for this
facility.
B. Special Market Conditions & Limited Term
The required term of this agreement is strictly limited to three(2) months during the transition to
Public Health. Procuring an alternative third-party vendor for a 60-day transitional window is
practically impossible and cost-prohibitive:
• No alternative provider can recruit, credential, security-clear, and onboard clinical staff for a 2-month
engagement.
• A short-term bridge contract does not justify the mobilization costs of an outside vendor.
C. Emergent Need & Continuity of Care
A lapse in medical coverage would create an immediate threat to the health, safety, and
constitutional rights of the incarcerated population, exposing the jurisdiction to severe liability and
legal intervention. Retaining the incumbent provider for this bridge period ensures uninterrupted
administration of daily medications, intake screenings, chronic disease management, and
emergency response.
4. COST REASONABLENESS & PRICING
Pricing under this 2-month contract is based on $35,000 per month, which has been reviewed and
determined fair and reasonable based on prevailing market rates for licensed correctional medical
staff and clinical supervision.
5. TRANSITION PLAN
During the 2-month term:
1. Month 1: Finalize interlocal agreements and staffing schedules with Public Health.
2. Month 2: Public Health clinical onboarding.
6. RECOMMENDATION
Staff recommends that the Board of Commissioners approve the waiver of competitive bidding
under RCW 39.04.280 and authorize the execution of a 2-month medical services agreement with
Healthcare Delivery Systems inc in an amount not to exceed $70,000.00
Andy Pernsteiner
\ SHERIFpa-i1/�
''`^i. "_. . JEFFERSON COUNTY SHERIFF
` _./EFFERSO�_ '
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79 Elkins Road • Port Hadlock, Washington 98339 • (360)-385-3831
SUBMITTED BY:
David Fortino Chief of Corrections,
Jefferson County Sheriff's Office
APPROVED BY 1 ASSIGNED PURSUANT TO RCW 39.04.280(2):
PROFESSIONAL SERVICES CONTRACT
HEALTHCARE DELIVERY SYSTEMS, INC.
This Professional Services Contract (the "Contract") is entered into on the 31 st of July
2026 by and between the County of Jefferson (the "County") and Healthcare Delivery, Inc., dba
Healthcare Delivery Systems (" HDS").
RECITALS
A. The County desires to have certain health care services requiring specialized skills and
other supportive capabilities performed as set forth in this Contract.
B. HDS is qualified and possesses the skills and capabilities to perform the health care
services set forth in this Contract and desires to perform such services for the County.
C. HDS has informed the County that its intent is to execute a short-term contract that will
terminate on October 1, 2026. This limited-term contract will ensure that necessary and legally
mandated health care services are provided to individuals housed at the Jefferson County Jail while
allowing the County sufficient time to secure the services of an alternate provider via a multi-year
contract.
CONTRACT
NOW, THEREFORE, the parties agree as follows:
1. SERVICES. HDS shall perform the services set forth in this Contract and listed in detail
on Exhibit A attached hereto and by this reference incorporated herein (the "Services"), including
the furnishing of all equipment necessary for the performance of the Services. HDS shall not be
required to perform any services which are not specifically identified in this Contract.
2. FACILITY; SUPPLIES. The County shall provide an appropriate medical area in
which HDS may perform the Services.The County shall provide all materials and supplies necessary
or desirable for HDS's performance of the Services, including,without limitation,those items listed
on Exhibit C attached hereto and by this reference incorporated herein. The County shall provide
inmate transport to and from the medical area and provide security for all HDS staff when on site.
3. TERM. The term of this contract shall be (retroactive) from July 31, 2026 and at the
point where HDS's current contract for the same services expires to September 30, 2026 at 11:59
pm.
4. COMPENSATION . The County will pay HDS for the performance of the Services
based on the rates and charges set forth on Exhibit B,for a total compensation not to exceed $70,000.
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a. Payment. HDS will submit an itemized invoice to the County on or after the first
day of each calendar month for Services performed during the immediately preceding calendar
month based on the rates and charges set forth on Exhibit A. The invoice shall list the dates,
hours, services, and charges. The County shall pay HDS within thirty (30) days after receipt of
a correct and conforming invoice. For purposes of Compensation and Payment, the term "due
date" shall be the 30th day after the County receives a correct and conforming invoice. With the
exception noted herein, the County shall pay a late charge of 2%of any amounts not paid on or
before the due date,and any amounts not paid when due shall accrue interest at the rate of 1%per
month starting on the payment due date and continuing until any overdue balance(s), including
late charges, is/are received in full. As an exception to the forgoing, HDS shall not be paid for
services rendered under the Contract unless and until they have been performed to the reasonable
satisfaction of the County. Moreover, in the event HDS has failed to perform any substantial
obligation to be performed by HDS under this Contract and such failure has not been cured within
ten (10) days following notice from the County, then the County may, in its sole discretion, upon
written notice to HDS, withhold any and all monies due and payable to RDS,without penalty until
such failure to perform is cured or otherwise adjudicated."Substantial"for purposes of this Contract
means faithfully fulfilling the terms of the Contract with variances only for technical or minor
omissions or defects.
b. Except as required as part of the performance of the Services, either party may disclose,
and neither party shall be required to disclose, confidential information regarding the recipient of
any of the Services for any purpose except with the written consent of the recipient or the
recipient's attorney or responsible parent or guardian, or as otherwise permitted or required by
law. This Contract is a Public Record subject to the provisions of the Public Records Act, Ch.
42.56 RCW."
c. Personal information collected,used,or acquired in connection with this Contract shall
be used solely for the purposes of the Contract and shall remain the property of the County.
County staff authorized to see such information will be designated in writing by the Jail
Superintendent. HDS shall have a non-exclusive license to review, generate, and use that
information during the term of this Contract.
d. For purposes of this Contract, the term "personal information" shall mean information
identifiable to any person, including,but not limited to, information that relates to a person's name,
health, finances, education, business, use or receipt of governmental services or other activities,
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addresses, telephone numbers, social security numbers, driver's license numbers, other identifying
numbers and any financial identifiers.
e. For purposes of this Contract,the term"personal infom 1 ation"also includes"Protected
Health Information" as set forth in 45 CFR. § 160.103 as currently adopted and as may hereafter
be amended or revised and other information that may be exempt from production to the public or
other unauthorized persons under either Ch.42.56 RCW, 42 USC §§1320 et seq., 42 CFR Part 2,
Chapters 70.02, 70.24, 70.96A and 71.05 RCW or other state and federal statutes and regulations
governing confidentiality and/or disclosure.
f. HDS agrees to implement physical, electronic, and managerial safeguards to prevent
unauthorized access to "personal information". The County reserves the right to monitor, audit, or
investigate the use of personal information collected, used, or acquired by HDS through this
Contract.
g. HDS agrees not to release, divulge, publish, transfer, sell, or otherwise make known
"personal information" without the express written consent of the subject person, the County,
or as provided by law.
h. HDS agrees to indemnify and hold harmless the County for any court costs,attorney's
fees, or damages related to or arising from HDS's unauthorized use or disclosure of"personal
information".
i. To the extent required by law, HDS shall certify the return or destruction of all "personal
information" upon expiration of this Contract.
j. Any breach of this Section by HDS may result in termination of this Contract in
a manner consistent with Section 15 of this Contract.
k. The provisions of this Section shall be included in any contract or agreement
between the HDS and any and all of the HDS's subcontractors.
5. COMPLIANCE WITH LAW. HDS shall comply with all Federal, state and local laws
and regulations applicable to the performance of the Services, including those governing licensing,
registration, and certification.
6. AMENDMENT. Any amendment or modification to this Contract must be in writing and
signed by both parties to be effective.
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7. NON-DISCRIMINATION. HDS shall not, on the basis of race, color, sex, sexual
orientation,religion,national origin,creed,marital status,age,Vietnam era or disabled veteran status,
or the presence of any sensory, mental, or physical disability, deny an individual any Services
required to be provided under this Contract.
8. INDEPENDENT CONTRACTOR.This Contract establishes an independent contractor
relationship between the parties and shall not be construed to create any relationship of partnership or
joint venture. None of the persons performing the Services shall be deemed to be an employee or agent
of the County for any purpose and no such person shall be entitled to any of the benefits the County
provides to its employees. Such persons are employees or agents of HDS and HDS shall be
responsible for directing and controlling such persons in the performance of the Services and for
compensating them.
9. LIMITATION OF LIABILITY; INDEMNIFICATION. HDS's liability on any
claim whatsoever for which HDS is responsible, including negligence and any damage or loss
arising out of or resulting from this Contract or the performance or breach hereof not covered,
reimbursed or paid for by the insurance maintained by or for the benefit of HDS under Section 12
of this Contract shall in no event exceed the total compensation paid to Consultant hereunder. Any
action for breach of this Contract must be commenced within two (2) years after the occurrence of
the event giving rise to such breach. In no event shall HDS be responsible for,or the County entitled
to recover, indirect, special, incidental or consequential damages. The County shall indemnify and
hold harmless HDS, and its employees and agents, from and against any claim, loss, liability or
damage(including attorneys' fees incurred in connection with the defense of any action based on any
such alleged act or omission, which attorneys' fees shall be paid as incurred) arising out of or in
connection with any act performed, or omitted to be performed in connection with this Contract;
provided that such indemnification and hold harmless shall not cover(i) indemnification prohibited
by law, or (ii) any act or omission of HDS amounting to an intentional breach of this Contract,
fraud, gross negligence, or willful misconduct. Without limiting the foregoing, the County will
defend, indemnify,and hold HDS and its employees and agents harmless from and against any claim,
loss, liability,or damage resulting from the failure to provide medical care,treatment,diagnostics,or
pharmaceuticals to any person where HDS has advised the County of the medical necessity thereof.
10. INSURANCE.Prior to commencing work,HDS shall obtain at its own cost and expense
the following insurance from companies licensed in the State of Washington with a Best's rating of
no less than A: VII. HDS shall provide to the County Risk Manager certificates of insurance with
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original endorsements evidencing the insurance required by this clause prior to the commencement
of the Services. If any of the insurance requirements are not complied with at the renewal date of
the insurance policy,payments to HDS shall be withheld until all such requirements have been met,
or at the option of the County, the County may pay the renewal premium and withhold such
payments from the moneys due HDS.
All notices shall name HDS and identify the Contract by contract number or some other
form of identification necessary to inform the County of the particular contract affected.
a. Workers Compensation. HDS shall procure and maintain for the life of the Contract,
Workers Compensation Insurance, in accordance with the laws of the State of Washington.
HDS specifically assumes potential liability for actions brought against the County by HDS's
employees, including all other persons engaged in the performance of any work or service
required of HDS under this Contract and, solely for the purpose of this indemnification and
defense, HDS specifically waives any immunity under the state industrial insurance law, Title
51 R.C.W. HDS recognizes that this waiver was specifically entered into pursuant to provisions
of R.C.W. 4.24.115 and was the subject of mutual negotiation.
b. Commercial General Liability with a minimum limit per occurrence of one million
dollars ($1,000,000) and an aggregate of not less than two million dollars ($2,000,000) for
bodily injury, death, and property damage. This insurance coverage shall indicate on the
certificate of insurance the following coverage:
-Broad Form Property Damage with no employee exclusion; Personal Injury Liability,
including extended bodily injury;
-Broad Form Contractual/Commercial Liability Premises - Operations Liability(M&C);
-Independent Contractors and Subcontractors; and
-Automobile with a minimum limit per occurrence of$ I,000,000 for personal injury and
property damage. This insurance shall indicate on the certificate of insurance the
following coverage: Owned automobiles: Hired automobiles; and, Non-owned
automobiles
c. Professional Liability. HDS s hall maintain in full force and effect professional
liability medical malpractice insurance covering HDS and each of its employees and agents
performing Services, with coverage of not less than $1 000,000 in the aggregate.
Any deductibles shall be declared to and approved by the County prior to the approval of the
Contract by the County. Prior Proof of deductibles provided by HDS under the contract
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immediately preceding this contract shall be sufficient proof, so long as such deductibles have
not increased in cost by more than the U.S. rate of inflation at the end of July 2026 plus 5%(five
percent)of the deductible in place for the month of July 2026.
HDS shall include all subcontractors as insureds under its insurance policies or shall furnish
separate certificates and endorsements for each subcontractor. All insurance provisions for
subcontractors shall be subject to all of the requirements stated herein. Failure of HDS to
take out and/or maintain any required insurance shall not relieve HDS from any liability under
the Contract,or shall the insurance requirements be construed to conflict with or otherwise limit
the obligations concerning indemnification.
d. County Insurance. The County states it is a member of the Washington Counties
Risk Pool (or "WCRP") and through said membership has third-party liability coverage
through the Memorandum of Li ability Coverage("MLC")provided to it by the W CRP in
the amount of Twenty Million Dollars ($20,000,000.00). For purposes of the MLC,
HDS, its owner, any state-licensed medical provider employed by or contracting with
HDS and any employee, subcontractor or representative of HDS shall be considered a
"Protected Party" for the purposes of any claim, lawsuit, or action arising from or
proximately caused by the acts and/or omissions of HDS during the course and scope of
work performed by HDS in furtherance of this Contract as more specifically described
in the attached Scope of Services, Exhibit A to this Contract. The third-party liability
coverage provided by the M LC to the County shall be primary to any professional
liability/medical malpractice insurance HDS is required to obtain and maintain pursuant
to this Contract.
11. JURSII)ICTION. This Contract shall be governed by and construed in accordance with
the laws of the State of Washington. Any suit or proceeding in connection with this Contract
shall be brought and maintained only in Thurston County Superior Court.
12.ASSIGNMENT, DELEGATION, AND SUBCONTRACTING. HDS shall
perform the terms of the Contract using only its bona fide employees or agents who have the
qualifications to perform under this Contract. The obligations and duties of HDS under this Contract
shall not be assigned,delegated,or subcontracted to any other person or firm without the prior express
written consent of the County. HDS warrants that it has not paid nor has it agreed to pay any
company, person, partnership, or fiml, other than a bona fide employee working exclusively for
HDS, any fee, commission, percentage, brokerage fee, gift, or other consideration contingent upon
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or resulting from the award of making of this Contract.
13. TERMINATION. The County may terminate this Contract for convenience at any time
by giving ninety(90)days written notice to HDS. HDS may terminate this Contract for convenience
at any time by giving ninety (90)days written notice to the County. In either event,the County shall
pay HDS for all Services performed through the date of termination.
14. SEVERA BILITV. If any part, tam, or provision of this Contract is held to be illegal
or unenforceable, the validity of the remaining provisions shall not be affected, and such part,term,
or provision shall be deemed modified to the extent necessary to make it legal and enforceable, but if
such modification ication is not possible, the rights and obligations of the parties shall be construed and
enforced as i f this Contract did not contain the particular part, term. or provision held to be illegal
or unenforceable. Notwithstanding the foregoing, if such modification or elimination would
materially and adversely alter the rights or obligations of a party, such party may terminate this
Contract by written notice to the other.
15. ENTIRE CONTRACT. This Contract is the complete expression of the parties'
agreement, and supersedes any prior or contemporaneous oral representations, understandings, or
agreements.
16. NO WAIVER. The failure of either party to insist on strict compliance with any of the
terms, covenants, or conditions of this Contract by the other party shall not be deemed a waiver of
that term, covenant, or condition, nor shall any waiver or relinquishment of any right or power at
any one time or times be deemed a waiver or relinquishment of that right or power for all or any other
times.
17. NOTICES. Any notice to be given hereunder by either party shall be in writing and shall
be deemed to be fully given on the date of service if served personally on the party to whom notice is
to be given, or on the third day after mailing if sent by celtified or registered mail, return receipt
requested, at the address of the party as it appears beneath its signature below.
18. DEBARMENT. LIDS certifies that it is not presently debarred, suspended or
proposed to for debarment, declared ineligible, or voluntarily excluded from participation in this
Contract by any Federal department or agency,.
19. SUBSTANCE USE PROHIBITIONS. While performing services, the use of illegal
drugs, alcohol, or controlled substances on County property or premises is strictly prohibited.
HDS's employees shall not perform services while under the influence of drugs or alcohol, and
if discovered,may be reported to the appropriate law enforcement agency.
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20. TOBACCO USE. The use of tobacco of any kind on property or premises of the County
shall comply with County policies.
21. COUNTERPARTS.This Contract may be executed in one or more counterparts,each
of which shall be deemed an original, and all of which counterparts together shall constitute the
same instrument which may be sufficiently evidenced by one counterpart. Execution of this
Contract at different times and places by the parties shall not affect the validity of this Contract,
so long as all the parties execute a counterpart of this Contract.
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SIGNATURES
IN WITNESS WHEREOF, the parties have executed this ('ontract as of the date and
year first written above.
JEFFERSON COUNTY WASHINGTON ENTITY
Board of County Co missioners
Jefferson Cou shington ,
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Jere tah .. Luther Date
Civil Deputy Prosecuting Attorney
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SIGNATURES
IN WITNESS WHIM,OF. the parties have executed this Contract as of the date and
year first written above.
JFFFERSON COUNTY WASHINGTON ENTITY
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Jefferson Cou % ington ( CeiZa&
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JEFFERSON COUNTY
BOARD OF COUNTY COMMISSIONERS
AGENDA REQUEST
TO: Board of County Commissioners
Josh Peters,County Administrator
FROM: David Fortino
DATE: September 14,2026
SUBJECT: Contract re: Subcontract for Professional Services; Jefferson County; Healthcare
Delivery, Inc.
STATEMENT OF ISSUE:
Subcontract for Professional Services;Jefferson County; Healthcare Delivery, Inc. for inmate health care
services.
ANALYSIS:
Term of this agreement is July 31,2026 through September 30,2026. This agreement provides critical
health care services to the incarcerated individual at the Jefferson County Jail.
FISCAL IMPACT:
Total compensation not to exceed$70,000.00
RECOMMENDATION:
Approve Contract Amendment re: Subcontract for Professional Services;Jefferson County;Healthcare
Delivery, Inc.
REVIEWED BY:
Josh Peters, County Administrator Date
CONTRACT REVIEW FORM Clear Form
(INSTRUCTIONS ARE ON THE NEXT PAGE)
CONTRACT WITH: Healthecare Delrevery Systems Inc Contract No: JCSO-9-2026
Contract For Professional Services Contract,Inmate Healthcare Term: 3 months
COUNTY DEPARTMENT: Jefferson County snenff's Office
Contact Person: David Feren
Contact Phone: 360-344-9743
Contact email: dfortIno@osJefferson we us
AMOUNT: S70,000 00 PROCESS: Exempt from Bid Process
Revenue: N/A Cooperative Purchase
Expenditure: N/A Competitive Sealed Bid
Matching Funds Required: Small Works Roster
Sources(s)of Matching Funds — Vendor List Bid
Fund # 001-180-000 RFP or RFQ
Munis Org/Obj 001-180-000 I Other: Sole Source
APPROVAL STEPS:
STEP 1: DEPARTMENT CERTIFIES COMPLIANCE WITH JCC 3.55.11xll AND CHAPTER 42.23 RCW.
CERTIFIED: I I N/A:El (7
Signature Date
STEP 2: DEPARTMENT CERTIFIES THE PERSON PROPOSED FOR CONTRACTING WITH THE
COUNTY (CONTRACTOR) HAS NOT BEEN DEBARRED BY ANY FEDERAL, STATE, OR LOCAL
AGENCY.
CERTIFIED: ❑ N/A: ,X/Paita.
Signature Date
STEP 3: RISK MANAGEMENT REVIEW(will be added electronically through Laserfiche):
Electronically approved by Risk Management on 9/2/2026.
STEP 4: PROSECUTING ATTORNEY REVIEW (will be added electronically through Laserfiche):
Electronically approved as to form by PAO on 9/2/2026.
DPA endorses the statements set out in Section 3 of the Sole Source
memo. The county is obligated under federal and state law to provide
health services to jail detainees. DPA Luther reviewed and approved on
09-02-2026.
STEP 5: DEPARTMENT MAKES REVISIONS & RESUBMITS TO RISK MANAGEMENT AND
PROSECUTING ATTORNEY(IF REQUIRED).
STEP 6: CONTRACTOR SIGNS
STEP 7: SUBMIT TO BOCC FOR APPROVAL
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