Report Prepared by: Jeff Bennyhoff, Director of Information Technology
Title
SUBJECT: Authorization to Waive the Competitive Bidding Requirement to Allow Piggybacking onto County of Riverside Agreement #8084445 and #7754679 for Microsoft Licensing of Software and Subscriptions to Crayon Software and Microsoft for a Period of April 1, 2022, to March 31,2025 in a not to Exceed Amount of $215,202.00 and Approving Contract Documents
REPORT IN BRIEF
Authorization to Waive the Competitive Bidding due to piggybacking onto County of Riverside Agreement #8084445 and #7754679 for Microsoft Licensing of Software and Subscriptions to Crayon Software and Microsoft for a Period of April 1, 2022, to March 31,2025 in a not-to-exceed amount of $215,202.00 and approving Contract Documents.
RECOMMENDATION
City Council - Adopt a motion:
A. Waiving the City’s competitive bid requirements as stated in Section 3.04.210 due to piggybacking and approving contract documents; and,
B. Authorizing the City Manager or Deputy City Manager to execute all necessary documents; and,
C. Authorizing the Finance Officer to make necessary interfund transfers; and,
D. Authorizing the City Manager or the Deputy City Manager to execute future contract amendments that do not exceed 125% of the total agreement value for the three-year duration of the agreement; and,
E. Authorizing the Finance Officer to make necessity budget adjustments for future contract amendments; and,
F. Authorizing the Finance Officer to transfer any required funds to the PC Replacement Fund and appropriate to be used explicitly for encumbrances and expenditures of new software licenses or subscriptions during the agreement; and,
G. Approving the Agreements with Microsoft for software Licenses and Subscriptions.
Body
ALTERNATIVES
1. Adopt the motion as recommended; or,
2. Decline to award contract; or,
3. Refer to staff with direction.
AUTHORITY
Bidding for items over $33,000.00 may be waived with the approval of the City Council under Merced Municipal Code Article III of Title 3, Chapter 3.04, Section 3.04.210. Waivers may be authorized for, but are not limited to, cooperative purchasing in conjunction with other governmental entities, professional services, annual service or supply agreements, or purchases necessary for standardization on particular types or equipment.
CITY COUNCIL PRIORITIES
As provided for in the 2021-22 Adopted Budget.
DISCUSSION
Background
On September 7th, 2021, council approved a 5-year Enterprise Agreement for Microsoft software and subscription services. The Enterprise Agreement covers most, but not all, Microsoft software and subscriptions used by all departments in the City. This contract was piggybacked off the California Department of Technology (CDT) State Contract as it offered the lowest cost of any available contract for those services.
As mentioned in the administrative report the CDT contract does not cover all the Microsoft software used by the City. To obtain the best negotiated pricing available the City will need to bifurcate the software and subscriptions used into multiple contracts to account for software and services used by departments that are not available on the state CDT contract.
These two new contracts account for the software and subscriptions that are not part of the CDT 5-year agreement. The Select Plus agreement will license our Microsoft on-premises preputial based license with a cost of $27,994 per year. The Microsoft Server and Cloud Enrollment (SCE) agreement will cover all subscription-based cloud services with a cost of $29,393 per year. The total cost of both contract for the 3-year term is $172,161.
Over the duration of the three agreement the City will need to add additional software and subscription services compared to what is currently outlined in the proposed quote. For example, the City will add additional staff that will need access to Microsoft software and subscriptions. The agreement accounts for this with two provisions via a true-up and new software license mechanism. It would be prudent to authorize the licensing of additional software subscriptions via these agreements. Staff recommend council to authorize the expense up to 125% above the current proposed amount for new software and true ups of software and subscription. The City would not be obligated to purchase new licenses or subscriptions, but would have the council authority to purchase if additional licenses and subscriptions are required. Any items that would push the City above this 125% threshold during the duration of the two agreements will be brought back to council for additional expenditure authority. The total expenditure authority required for both agreements and 125% to account for true-up and new licenses for the 3-year agreement is $215,125.
|
|
Year 1 |
Year 2 |
Year 3 |
Sub Total |
|
Select Plus |
$27,994 |
$27,994 |
$27,994 |
$83,982 |
|
SCE |
$29,393 |
$29,393 |
$29,393 |
$88,179 |
|
25% True-up-Add On Authority (If Required) |
$14,347 |
$14,347 |
$14,347 |
$43,041 |
|
|
|
|
|
|
|
|
|
|
Grand Total |
$215,202 |
Both agreements are based upon the County of Riverside Master agreement pricing. Council has previously approved using this contract vehicle for Microsoft software and subscription services in 2009, 2014, and 2019. The County of Riverside agreement offers the best rate for Microsoft software and services that are not included in the state CDT Microsoft contract. By bifurcating the software and services into three procurement contacts the City will ensure we get the best rate for every piece of software regardless of the contract the software is listed under.
Each time a Microsoft software and services contracts are up for renewal staff check to see if there is a cheaper alternative than Microsoft software, for example using Google software. The City has extensive business solutions that integrated with Microsoft software and it would cost significantly more funds to remove that interdependency. For example, in January 2019 council approved the purchase to replace the Enterprise Resource Planning system for $4.1 million dollars. The new ERP requires the City to have Microsoft software to be ability to utilize all the features of the new ERP software. For the City to not utilize Microsoft software and instead utilize another vendor software would require the City to unwind dozens of contracts worth millions of dollars.
IMPACT ON CITY RESOURCES
Most of the funding for Microsoft licenses for Fiscal Year 2021-22 is available within Fund 673 budget; however, an additional $6,000 is needed to cover the total expense and it will be an interfund transfer from Fund 672 to Fund 673.
Future year payments will also be budgeted and made from the Technology Replacement Fund 673 annually. Through the City’s annual budgeting process, the Technology Replacement Fund 673 will be reimbursed from the various departments based on number of licensing used for each department.
ATTACHMENTS
1. Riverside Master-Crayon Software Full Agreement.101619
2. Crayon MSEA Amend 1 Executed
3. City of Merced - Select Plus ARF
4. City of Merced - SCE Renewal Documents
5. City of Merced - Net New SCE Quote
6. City of Merced Select Plus Quote