Report to Mayor and City Council
Tuesday, August 06, 2024
Consent
SUBJECT:
Title
CONSIDERATION OF APPROVAL OF CONTRACTS FOR MICROSOFT SOFTWARE LICENSES, MAINTENANCE, AND SUPPORT WITH DELL MARKETING L.P. (CITY COUNCIL)
Body
I. SUMMARY
The City requires Microsoft software licenses, maintenance, and support for office productivity software for employee computer users and infrastructure, including; Microsoft 365 G3 licenses, Office 365 G1 licenses, Enterprise Mobility and Security licenses, Microsoft Teams, Enterprise E3 licenses for email, archiving, information protection, storage, and Windows Server licenses for the City’s servers.
Staff is requesting City Council to consider approval of a Contract with Dell Marketing L.P. to provide Microsoft software licenses, maintenance, and Office 365 services under the Microsoft Riverside County Cooperative Purchasing Program, for a total amount of $865,174.20 over a 3-year term, with an amount of $288,391.40 the first year, and $288,391.40 for each renewal year, and approval of a Microsoft Enterprise Enrollment Agreement to allow City to avail itself of Microsoft’s software licenses.
II. RECOMMENDATION
Recommendation
1. APPROVE a contract with Dell Marketing L.P. for software licenses, including software maintenance, and software support for a total contract amount not to exceed $865,174.20, for a term of 3 years.
2. APPROVE Microsoft Enterprise Enrollment Agreement.
3. AUTHORIZE the Mayor to execute the contracts with Dell Marketing L.P. and Microsoft after approval as to form by the City Attorney.
Body
III. ALTERNATIVES
TAKE another action the City Council deems appropriate.
IV. BACKGROUND
The City requires Microsoft Software Licenses for office productivity software for employee computer users and infrastructure, including; Microsoft 365 G3 licenses, Office 365 G1 licenses, Enterprise Mobility and Security licenses, Microsoft Teams, Enterprise E3 licenses for email, archiving, information protection, storage, and Windows Server licenses for the City’s servers.
Section 2611(g) of the City’s Municipal Code (CMC) allows City, through its Purchasing Manager, to dispense with competitive bidding processes to purchase materials, supplies, equipment, or services by utilizing a cooperative purchasing program engaged in by any local, county, State, or Federal public entity or entities, even if the contracts and implementing agreements entered into by the participating entity or association under those cooperative purchasing programs were not entered into pursuant to a process that resulted in the contract being awarded to the lowest responsible and responsive bidder under CMC 2610(i); provided, that the selected bidder was selected in compliance with the competitive bidding or proposal process requirements of any participating entity or association within three years of City’s approval of the City contract entered into with the selected bidder via cooperative purchasing. The City Council has made a determination that the benefits to City of utilizing cooperative purchasing outweigh any incremental higher price that may be paid by City in certain instances as a result of not soliciting directly utilizing the lowest responsible and responsive bidder standard under CMC 2610(i).
The County of Riverside is part of a cooperative purchasing program through which it entered into a contract with City’s vendor referred to as Riverside County Dell Agreement #PSA-0001524 and Riverside County Master EA #8084445, after engaging in a competitive bidding process, whereby it now receives cloud-based Microsoft 365 licenses at a significantly discounted rate. The City’s Purchasing Manager has determined that the Riverside County cooperative purchasing bidding process complies with the requirements of Section 2611(g) of the CMC and has therefore waived the formal bidding process for procurement of the Microsoft Software Licenses.
On June 10, 2024, the City obtained a quotation from SHI International, Corp. for Microsoft Software Licenses based upon the number of computer users with different requirements, and the number of Microsoft Windows servers. The quotation was priced in accordance with the County of Riverside cooperative purchasing contract. The City and SHI International, Corp negotiated an agreement, and the contract was approved by City Council on July 16, 2024.
Following City Council approval, on July 17, 2024, SHI International Corp staff contacted City staff notifying that SHI International Corp staff made an error in calculation of their Microsoft license pricing and is therefore demanding an increase in the total contract amount while refusing to sign the City-approved contract. City staff countered that SHI should rectify their pricing error without impacting the City’s total contract amount, and SHI disagreed. City staff escalated the issue to Microsoft and thereafter SHI agreed to restore pricing back to the agreed upon license costs. However, SHI staff then communicated that their company was still unwilling to sign the agreement to execute contract terms and conditions previously agreed upon even after City staff reluctantly accepted SHI’s proposed revisions pursuant to several meetings.
Based upon the unwillingness of SHI International Corp staff to execute verbal and written commitments made during the negotiation via a contract signature process, and the pending expiration of the current Microsoft licenses on July 31, 2024, City staff solicited a quote for Microsoft Software Licenses based upon the equivalent number of computer users with different requirements, and the equivalent number of Microsoft Windows servers from Dell Marketing L.P. Dell Marketing L.P. is a Microsoft Partner participating in the County of Riverside Cooperative Purchasing Program through which Riverside County entered into a contract with Dell Marketing L.P., referred to as Riverside County Dell Agreement #PSA-0001524 and Riverside County Master EA #8084445. Dell Marketing L.P.’s quote is competitive and City staff were quickly able to reach agreement on contract terms with Dell Marketing L.P. The City and Dell Marketing L.P. seek approval from City Council to execute a contract for total amount not to exceed $865,174.20 for a maximum term of three (3) years. This requires that City also enter into a Microsoft Enterprise Enrollment Agreement thereby allowing implementation of the terms of the Dell Marketing L.P. agreement, which incorporates by reference both Riverside County Dell Agreement #PSA-0001524 and Riverside County Master EA #8084445.
V. FISCAL IMPACT
The cost associated with the 3-year contract with Dell Marketing L.P. is not to exceed the amount of $865,174.20. The first-year costs for software licenses, including maintenance and support, is for a total of $288,391.40.
The total cost of $288,391.40 for the initial year of software licensing, including maintenance, and support is included in the current Information Technology & Security Department FY2024-25 budget. Software licensing, maintenance and support will be included in the proposed FY2025-26 and subsequent fiscal year budgets.
|
Fiscal Year |
Amount |
Account Number |
|
FY2024-25 |
$288,391.40 |
101-54-520-101-6004 |
|
FY2025-26 |
$288,391.40 |
101-54-520-101-6004 |
|
FY2026-27 |
$288,391.40 |
101-54-520-101-6004 |
|
Total |
$865,174.20 |
101-54-520-101-6004 |
VI. EXHIBITS
1. Contract with Dell Marketing L.P. (pgs. 5 - 7)
2. County of Riverside Microsoft Enterprise Agreement. (pgs. 8 - 39)
3. County of Riverside Microsoft Enterprise Amendment No. 1. (pgs. 40 - 41)
4. Dell Marketing L.P. Quote. (pg. 42)
5. Microsoft Enterprise Enrollment Agreement. (pgs. 42 - 59)
6. Purchasing Waiver. (pgs. 60 -61)
1.
Prepared by: Gary Carter, Director, Information Technology&Security Department