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APPROVE EXTENSION OF HYLAND ONBASE HOSTED SOLUTION AGREEMENT WITH NEKO INDUSTRIES, INC.
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RECOMMENDATION
Staff recommends the City Council approve a motion to:
1. Authorize the City Manager to execute the Hyland OnBase Online Hosted Solution Agreement with NEKO Industries, Inc. in an amount not to exceed $222,684 for one year with an option for two additional one-year renewals using the County of Sonoma cooperative purchasing agreement with NEKO Industries, Inc. (Attachments A, B and C);
2. Approve findings for an exception to the competitive bidding process; and
3. Authorize the City Manager to take necessary and appropriate actions to carry out the purpose and intent of this motion.
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Summary
Six departments (City Clerk, Administrative Services, Public Works, Economic Development, Municipal Utilities, and Community Development) use OnBase to image and retrieve documents. This software solution is purchased through NEKO Industries, Inc., a reseller. Consideration has been given to invest in a more comprehensive citywide document imaging and management system, such as Microsoft SharePoint/Office 365. A consultant will be hired to perform the assessment to determine if Microsoft SharePoint/Office365 will meet the needs of the City as a replacement to OnBase or if another solution will best fit the City’s needs. However, additional time is necessary to complete the assessment and develop a recommendation. Implementation of a citywide document management system is a major project and represents a significant investment. As such, the City is recommending a one-year extension with NEKO, with an option for two additional one-year terms.
The new agreement with NEKO will allow sufficient time to examine, develop and forward recommendations for implementing a well thought-out citywide strategy for document management that will provide greater internal efficiencies and increased transparency.
DISCUSSION
Background
An agreement with NEKO Industries, Inc. to provide imaging and hosting solutions was first approved under Resolution 06-0409 and extended by Resolutions 07-0420, 08-0240, 09-0179, 09-0369, 10-0365, 13-1002, and 15-1479. The agreement with Neko was recently extended to June 30, 2017.
In July 2011, an assessment of the City’s information technology system was conducted by NexLevel Information Technology, Inc. The report was presented to Council at that time. Issues with hosted OnBase were identified in this report. It recommended the City consider a more comprehensive and strategic approach to document management.
In April 2014, the hosting contract with NEKO was extended to maintain critical business functions and to allow time for completing an assessment of the hosted OnBase system. The assessment was to be part of a larger project that may have included expansion of OnBase to all City departments and conversion of GroupWise documents to OnBase. It was recommended that an alternative to OnBase be considered as a long-term solution because of the ongoing monthly costs.
In 2015, upon Council approval, IT implemented Office 365 with SharePoint online. As part of the migration of GroupWise to Office 365, a majority of documents that were stored in GroupWise were moved to SharePoint/Office 365.
Currently, the City is planning to work with a consultant to perform an assessment of our options for the use of OnBase versus the ongoing use of SharePoint/Office 365. The outcome of this assessment will focus on the long-term investment in SharePoint/Office 365 for meeting the requirements of all City Departments. This work will complete the City’s migration from GroupWise for citywide document management and retention. With the consultant evaluating further transition to SharePoint/Office 365, additional time is necessary to fully evaluate and recommend a direction for a citywide document management system.
Present Situation
The most recent agreement with NEKO expires on June 30, 2017. Staff is now recommending that Council adopt findings to support an exception to the competitive bidding requirements for an additional extension of the agreement using Sonoma County’s cooperative purchase agreement with NEKO Industries Inc. for a period of one year, effective July 1, 2017, to June 30, 2018, with an option to renew for two additional one-year terms.
Approval of the agreement with NEKO will ensure the City’s current hosted/online document management system is licensed and maintained while the assessment of SharePoint/Office 365 is being completed. During this time, an extension of the existing contract with NEKO is needed to meet the City’s document management needs.
Findings:
Stockton Municipal Code Section 3.68.070 provides an exception to the competitive bidding process in cases where the City Council has approved findings that support and justify the exception. The proposed findings are as follows:
1. Sonoma County has established a cooperative purchase agreement with NEKO Industries, Inc. and offers all entities within the State of California the same Terms and Conditions, the same price and for the same effective period.
2. Sonoma County established these cooperative purchase agreements pursuant to a competitive bidding process.
3. The bid specifications used by Sonoma County have been assessed by Purchasing as compatible to the City of Stockton standards with regards to the formal process, lowest pricing, awarded contract, and cooperative purchasing language allowing public agencies to avail of such process and pricing.
4. While the City is in the process of exploring its options for a comprehensive document management solution, it is not in the best interests of the City to seek a new vendor until that process is complete. This contract extension will allow the City to continue using the existing vendor NEKO during this period.
FINANCIAL SUMMARY
The annual amount is $222,684 for the Hyland OnBase Online renewal through NEKO Industries Inc. The contract term is July 1, 2017, through June 30, 2018, with optional two one-year renewals. There is sufficient appropriation in the Computer Internal Service Fund, account number 502-5101-571, to cover the FY17-18 portion of the expense. Future estimated annual cost of $222,684 for the hosted service is included in the proposed annual budget requests.
Attachment A - County of Sonoma Cooperative Purchasing Agreement with NEKO Industries, Inc.
Attachment B - Letter from County of Sonoma extending Cooperative Purchasing Agreement
Attachment C - Agreement with NEKO Industries, Inc.