Title
SUBJECT: Agreement for Professional Services Contract with NexLevel Information Technology, Inc. for Needs Assessment, Procurement Services of Enterprise Resource Planning (ERP) Systems, and Phase 1 Project Management
REPORT IN BRIEF
Consider approving an agreement for professional services contract with NexLevel Information Technology, Inc. for needs assessment, procurement services of enterprise resource planning (ERP) systems, and phase 1 project management.
RECOMMENDATION
City Council - Adopt a motion:
A. Approving the Professional Services Agreement for $97,750 with NexLevel Information Technology, Inc.
B. Approving the NexLevel Optional Project Management Assistance for Phase 1 on a time and materials basis not to exceed $170,688.
C. Authorizing the City Manager or Assistant City Manager to execute the necessary documents.
Body
ALTERNATIVES
1. Approve as recommended by Staff; or
2. Deny; or,
3. Refer to Staff for further evaluation.
AUTHORITY
Charter of the City of Merced, Section 3.04.28
CITY COUNCIL PRIORITIES
As provided for in the 2017-18 Adopted Budget.
DISCUSSION
History
In 1989 the City procured an Enterprise Resource Planning (ERP) software package from H.T.E; now called Superion through various acquisitions.
The City has used this software package for the last 29 years to operate the core business systems for the City. The ERP software suite is responsible for managing the City’s’ Accounts Payable, Accounts Receivable, Asset Management, Budgeting, Building Permits, Cash Receipts, Code Enforcement, Fixed Assets, Fleet Management, General Ledger, GMBA, Inventory, Job Costing/ Capital Projects, Land Management, Payroll, Purchasing, Utility Billing, Work Orders, and more. This technology solution is premised around the concept of a mainframe computer system with City staffed programmers. This business model is not sustainable and is no longer a best practice for public agencies. As technology has evolved and moved forward, the ability to attract qualified programmers in this legacy technology is increasingly difficult.
Between the years, 2014-2018, several events have occurred that has further escalated the need to replace the system.
1. Both City employees’ with the knowledge, skills, and ability to program the mainframe have retired. All recruitment efforts have failed to find skilled applicants.
2. The City amended the contract with Superion to take on the duties of the retired City mainframe programmers. Superion has a shrinking customer base, which has caused them to retire or layoff approximately 75% of their programming staff that support the system.
3. The City hired an independent contractor to augment the knowledge, skills, and abilities of the I.T. staff to support the City Departments’ operational needs. The contractor is a former Superion employee and is very knowledgeable in the product but only works 25 hours per week. One part-time contractor cannot keep up with all the departments’ requests for change. The City now almost exclusively relies upon contractors, vendors and volunteers to program and make changes to the system.
The City issued a Request for Proposal in late 2017 for Professional Services for a Needs Assessment, RFP and Procurement of an Enterprise Resources Planning (ERP) Systems and Project Management assistance. The City formed a committee of twenty employees that represented all departments to select a vendor that would best interpret the needs of the City for new ERP Systems.
Five vendors responded to the RFP. After reviewing the RFP response material, oral interviews, and calling references the evaluation committee scored the vendors based on the table below.
|
Vendor |
Cost |
Evaluation Committee Combined Score |
Ranking |
|
NexLevel |
$97,750 |
89.2 |
1 |
|
BerryDunn |
$89,890 |
87.1 |
2 |
|
Baker Tilly |
$88,130 |
83.7 |
3 |
|
Soft Resources |
$110,700 |
75.6 |
4 |
|
Elert & Associates |
$251,221 |
62.4 |
5 |
NexLevel is a highly qualified vendor that works exclusively with municipalities. One of its core businesses is helping local government’s procure Enterprise Resource Planning (ERP) systems. NexLevel has performed similar scopes of work as outlined in our RFP for the City of Folsom, City of Fremont, City of Galt, City of Glendale, City of San Ramon, and City of Santa Clara.
The City of Merced previously worked with NexLevel on a small project in 2015. Their staff were very skilled and knowledgeable. All reference checks gave NexLevel high marks for the services they provided.
The Needs Assessment and Procurement of Enterprise Resources Planning (ERP) systems is anticipated to take NexLevel and the City approximately 6 months to complete. The first step in the process will define our business and technical requirements, create A Request for Proposal (RFP) for new ERP Systems.
Once the Needs Assessment and RFP is crafted, NexLevel will advise the City through the selection and procurement process for replacement ERP software suites. NexLevel will also assist the City on obtaining the best contractual terms and pricing. NexLevel does not sell ERP software.
In comparing the top 3 vendors we recommend engaging in the optional project management component from the RFP with NexLevel on a time and materials basis not to exceed $170,688 including travel during Phase 1 of the project to assist in project management. NexLevel would assist the City in project implementation assistance which could include chart account analysis and mapping, conversion assistance, quality assurance, testing support, and other services that will ensure a successful implementation.
|
Top 3 Vendors |
Optional Project Management Cost |
|
NexLevel |
$170,688 |
|
BerryDunn |
$354,000 |
|
Baker Tilly |
Did not quote a price |
Future Actions
It is estimated to take 4 to 5 years to complete the process of transitioning off Superion system to a modern software suites at an estimated cost between $2 million and $4 million. Once NexLevel completes the Needs Assessment and RFP the pricing estimate will be further refined. This will be an ongoing project stretching over multiple years needing funding and approval by Council for each of those subsequent years of implementation. The RFP will be written in a manner that will require bidding vendors to provide multi-year funding options.
IMPACT ON CITY RESOURCES
Funding is available in the Fiscal Year 2017-18 approved budget.
ATTACHMENTS
1. Agreement for Professional Services
2. Request for Proposal
3. NexLevel RFP Submittal