Construction and Facilities Program October 12, 2012 Premier and GNYHA Services

Agenda Items Introductions Overview of Construction and Facility Services Program Construction Projects Tools

Construction and Facilities Program GOAL: Drive Member value through the utilization and implementation of the Construction Capital Portfolio and Facility Portfolio | Construction | Facilities | IT and Telecom | Clinical Capital Equipment | Program Elements: Vetted Product Selection Process Incremental Management Process Tiered Contract Pricing Project and Large Order Competitive Pricing 3 3

Contract Due Diligence Process Contract Creation The Facilities Committee is made up of 20 facilities management professionals from the Premier Owners and hold a position of Director or Vice President in Facilities Management The Facilities Committee defines the contract priorities Potential suppliers are identified and contacted by Premier Prospective Suppliers respond to a Request for Proposal from Premier The Facilities Committee reviews findings assembled by Premier and fact based criteria common to all suppliers The Facilities Committee completes evaluation of all proposals and makes decision on which agreements move to final contract negotiations managed by Premier The Facilities Committee will make final contract award decisions Data Needs Knowledge

Program Foundation Construction and Facilities Programs Facilities Program Benefits Use high quality, pre-vetted vendors with beneficial terms and conditions Broaden facilities portfolio specific to member needs and to include regional agreements Provide greater value through additional savings and supplier value adds Enhance warranty & service terms (at no additional cost) Lock-in future savings on service agreements Drive manufacturer standardization (where desired) Construction Program Benefits Assist in the planning and acquisition phases of new construction capital Build complementary relationships with general contractors, architects and equipment planners early in project Maximize Savings on projects Improve delivery and lead time with major equipment manufacturers Leverage project volume for greater savings Keep local subcontractors involved

Construction and Facilities Contract Opportunities Overview: Premier Construction Services and Facilities Capital Portfolio Electrical Plumbing Roofing Elevators Tube System Controls HVAC Security Flooring Fire Paint Furniture Nurse Call Printers Copiers RFID Asset Tracking Interactive Kiosk Data Storage Telecom Cardiovascular Equipment Laboratory Equipment Imaging Equipment Nursing Equipment Pharmacy Equipment Surgical Equipment Can Liners Energy Efficiency Floor Care Laundry Paper & Janitor Supply Disaster & Emergency

Contract Implementation Construction and Facilities Contracts The Construction and Facilities industries are driven by relationships Incorporating GPO contracts involves creating awareness and building the process to implement Premier contracts This involves working with all parties during a project or implementation into your operations Understanding the relationships and industry model is imperative to the success of implementing Premier agreements into your project or operations

Construction Projects

Construction Services Team Engagement Traditional Design Concept - Early involvement in project - Collective expertise for project development before anything is designed Opportunity for Cost Savings Low High Schematics - Integrate Construction Services Program with project team - Create Premier portfolio awareness - Provide education around contract features - Help identify project delivery opportunities Opportunity for Cost Savings Low High Design Development - Provide education around contract features - Identify Premier contract opportunities - Provide value analysis - Facilitate inclusion of capital equipment into equipment planning lists Opportunity for Cost Savings Low High Construction Documents - Review project specifications for final contracted supplier selections - Provide authorized distributor information - Provide contract language for including Premier agreements and reporting Opportunity for Cost Savings Low High Project Bid - Notify contracted suppliers included in project - Begin tracking contracted supplier spend in project Opportunity for Cost Savings Low High Project Construction - Assist with any contracted supplier issues - Help prepare reporting documents for contracted supplier utilization Opportunity for Cost Savings Low High

Construction Capital Portfolio Clinical IT & Telecom Furniture Fixtures Equipment (Non-Clinical) Fees & Contingency Project Budget 60% Project Budget 10% Project Budget 15% Project Budget 5% Project Budget 10% Contract Categories 19 Contract Categories 114 Contract Categories 14 Contract Categories 11 Contract Categories 3 National Contracts 63 National Contracts 300 National Contracts 44 National Contracts 42 National Contracts 21

Contract Implementation Construction and Furniture, Fixtures and Equipment Construction Contracts Architects / Engineers & Equipment Planners Contracted National Supplier General Contractor Construction Manager Local Distributor Local Subcontractors

Barriers to Contract Implementation Construction and Furniture, Fixtures and Equipment Common Barriers to Contract Implementation May Include: Subcontractors (Purchasing Agent) will not want to, or may not be able to, purchase from Local Distributor; bad financial relationship may be barrier….. - No solution for this. This will be the biggest hurdle Materials purchased from an unauthorized distributor or agent for national supplier - Member will not receive Premier Contracted Terms and Conditions for purchase - Only buy through identified Local Distributors Availability of contract products in local region - Some contracted products cannot be purchased a local distributor – only direct from National Supplier; for example, Mannington Carpets Premier Contract Portfolio continually changing - New products will come on contract, products will go off contract as contracts expire - See the Facility Management Toolkit on the Premier, Inc. website

Contract Implementation Material Procurement | Bidding Information Steps: Send project specifications to Premier Construction Services Team Construction Services Team will contact National Supplier for listing of Local Authorized Distributor for the project Construction Services Team will assemble list of Local Distributors and send back to you for your project This information needs to be provided to the bidding contractors for the project materials Bidding contractors will need to follow instructions to receive contract pricing, terms and conditions Instructions for Bidding Subcontractors form to be sent from Premier Construction Services Team

Tools Available

Construction Contract Portfolio Book Updated monthly, this book is available to help match up Premier contracts to CSI Divisions in project specifications Displays: Contract Features Summary High-level Review of Items/Services Available on Contract Distribution Terms Supplier Representative Information

Clinical Capital Contract Resources Attainia Attainia's applications enable hundreds of hospitals, health systems, healthcare equipment planners, architects, and integrated delivery networks to effectively manage thousands of healthcare projects and budgets Healthcare equipment suppliers catalog their items within Attainia's integrated planning and budgeting tools allowing their products to be specified early in the planning process Premier agreements are stored in Attainia and can be viewed when planning (think of a catalog of Supply Chain Advisor products) Premier Members have free access to WATCH Register for your facility If your Equipment Planner is using Attainia, be sure to turn on the GPO agreements so they can see which items are on-contract vs those that are off-contract for your project

Construction Services Program Resources Construction Services Program Website Updated Construction, Facilities, IT & Clinical Capital Portfolio Reporting Templates Links to additional Premier resources http://www.premierinc.com/costs/private/tools-services/targeted-communities/construction/ Facilities Management Toolkit Updated Construction online portfolio Direct links to Contract Details in Supply Chain Advisor Direct links to Contracted Supplier websites http://www.premierinc.com/costs/private/tools-services/targeted-communities/construction/FacilityManagementTookit.jsp

Construction Services Program Contact Information Jim Venker, AIA Donna Craft, RN National Director, Construction Services Program Regional Manager, 704-816-5375 704-816-5593 jim_venker@premierinc.com donna_craft@premierinc.com