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APPROVE A MOTION TO UTILIZE A VENDOR POOL OF COOPERATIVE AGREEMENTS FOR INFORMATION TECHNOLOGY SOLUTIONS AND SERVICES
recommended action
RECOMMENDATION
It is recommended that the City Council approve a motion to:
1. Approve findings which support and justify an exception to the competitive bid process;
2. Authorize the execution of five (5) contracts, utilizing multiple cooperative agreements established through a formal competitive bidding process that meets City requirements and provides access to preferential pricing, terms and conditions for Information Technology Solutions and Services for a total estimated amount of $25,030,000 for the term of the contracts, which includes renewal option terms (Attachments A through F); and
3. Authorize the City Manager to take necessary and appropriate actions to carry out the purpose and intent of the motion.
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Summary
The Information Technology (IT) department supports more than 3,000 computers, printers, servers, mobile devices on a secure network and uses approximately 700 network devices and software to support this equipment. This infrastructure allows users access to email, software applications, network drives, internet, private and public WiFi, VoIP phones, and all hosted services. In the coming years, it is necessary to continue maintenance, servicing, licensing, and replacement of existing equipment based on the lifecycle replacement schedule.
This request establishes a vendor pool of cooperative agreements for purchases of general technology products and services. The use of these agreements will allow the City to purchase products and services in a timely manner, create efficiencies for staff, and to take advantage of significant discounts, estimated to provide potential savings from list prices of $1,120,000. Staff requests the Council authorize the execution of five contracts, utilizing multiple cooperative agreements for Information Technology Solutions and Services through FY 2028-29, for a total estimated amount of $25,030,000.
DISCUSSION
Background
The Information Technology (IT) department supports more than 3,000 computers, printers, servers, mobile devices on a large and complex wired and wireless secure computer data network. The City uses approximately 700 network devices and software to support this equipment. This infrastructure is what allows users access to email, software applications (Word, Excel, Computer-Aided Dispatch, Records Management Systems, etc.), network drives, the Internet, private and public WiFi, VoIP phones, and all hosted services.
In recent years, the City has spent an average of $5.5M annually (See: Table 1) and is budgeted at $11.2M in the current fiscal year, an increase that reflects additional spend plan for cybersecurity products and services, projects for enhanced technologies, and replacement of outdated infrastructure.
TABLE 1 - Technology Internal Service Fund / Technology SubFund
|
Expenditure Description |
2022 |
2023 |
2024 |
2025 Current Budget |
|
Equipment & Materials |
2,146,437 |
2,302,955 |
2,011,708 |
4,373,113 |
|
Software & Hardware Maintenance, Subscriptions, Hosting |
3,387,404 |
1,502,240 |
4,524,945 |
5,762,217 |
|
Projects |
354,588 |
0 |
212,262 |
1,076,897 |
|
Total |
$5,888,429 |
$3,805,195 |
$6,748,915 |
$11,212,227 |
The City approves purchases of general technology solutions and services through an agreement with CDW Government LLC, utilizing the National IPA Contract Number 2018011-01, approved by Motion 2020-03-10-1401, initially awarded in the amount of $12,500,000 for five (5) years, and later amended under Motion 2023-04-04-1203 to include Dell technology (computers, laptops, police vehicle mobile data computers, tablet computers, and other associated equipment), for a total amended amount of $14,560,000. The current contract expires on February 28, 2025.
This request is to establish a vendor pool of cooperative agreements for purchases of general technology products and services, with the added benefit of including the participation of multiple vendors and providing the City with an opportunity for increased cost savings. Also, by continuing a multi-year process to obtain approvals for purchasing routine operational expenses, the City benefits by reducing staff overhead and delays in acquisitions of products and services. In the coming years, it is necessary to continue maintenance, servicing, licensing, and replacement of existing equipment based on the lifecycle replacement schedule.
Present Situation
The City’s current investment in desktops, laptops, server equipment, and network infrastructure is estimated at a total replacement value of more than $13,000,000 over a five-year replacement schedule, which means the City will replace, on average, approximately 20% or $2,600,000 per year. Scheduled replacements fluctuate based on the age and condition of the equipment and are monitored through the City’s asset inventory system. Additionally, the City utilizes cloud-based software, Office 365 (Outlook, Sharepoint, Office, etc), Tyler Munis (ERP) and cloud data storage for data backups. Maintenance includes agreements with vendors for version upgrades, patches, and support to cover any problems or issues that may arise with the equipment or software.
Since the initial 5-year estimate comparable to Motion 2020-03-01-1401, the cost of technology assets has increased by 30%, driven by inflation and business service growth. Annual software subscriptions and maintenance services have expanded in both scope and cost. Additional services are included in this request which were previously purchased using a standard 3-quote competitive bid process. Also, as demand for projects for enhanced technology continues to grow, a contingency allocation is added to this request for department purchases. City staff project the cost to continue the current, comparable level of general technology services to support the infrastructure and network over the next five (5) years will be approximately $25,030,000 (see Table 2).
TABLE 2 - Purchase Authority Request
|
|
FY 2024-25 |
FY 2025-26 |
FY 2026-27 |
FY 2027-28 |
FY 2028-29 |
TOTAL |
|
Equipment Replacements Schedule |
1,940,734 |
1,372,664 |
2,320,742 |
1,077,542 |
1,411,467 |
8,123,149 |
|
Maintenance & Software Subscriptions |
1,768,666 |
2,514,078 |
2,888,317 |
2,997,733 |
3,112,620 |
13,281,414 |
|
Projects for Enhanced Technologies |
|
750,000 |
200,000 |
200,000 |
200,000 |
1,350,000 |
|
Contingency ~ 10% for departments |
370,937 |
463,670 |
540,901 |
427,524 |
472,405 |
2,275,437 |
|
Total Request |
$4,080,337 |
$5,100,412 |
$5,949,960 |
$4,702,799 |
$5,196,492 |
$25,030,000 |
Authorizing the use of multiple cooperative agreements will allow the City to procure products and services in a timely manner and to take advantage of significant discounts, as well as create efficiencies for staff in terms of fewer staff reports, contract routings, and requests for quotes, which impacts multiple departments across the City: IT Department, Procurement, Budget Office, City Attorney, Human Resources/Risk, City Manager’s Office, and City Clerk’s Office. The following cooperative agreements have been identified as offering estimated potential savings of $1,120,000 from list prices and estimated allocations as described below (See Table 3):
An Omnia Partners cooperative agreement with CDWG has been identified as providing significant benefits for the City. Ongoing access to this agreement provides the City with an average 10% discount off of listed pricings from a large catalog, in any quantity. Additional discounts may be negotiated for key orders, based upon the preferential terms of the cooperative agreement. The agreement also provides ‘no cost’ standard delivery on all City orders under 70 pounds.
A total of six (6) Statewide Contracts between the Department of General Services and NWN Corporation has been identified and provides eligibility for the City to join. This agreement will provide significant discounts on a wide range of products and services. NWN offers an average discount of 37% on their enterprise technology contract. All contracts will offer the City Free On-Board Destination shipping.
City staff has identified and reviewed a cooperative contract between Omnia Partners and ePlus. This cooperative provides an average discount of 15% on products ordered. The agreement will provide the City with will Free On Board Destination shipping. Not only will the seller pay all shipping fees, but this contract will increase the City’s ability to purchase discounted products.
An Omnia cooperative agreement between Zones, LLC has been reviewed and confirmed to offer significant benefits to the City of Stockton. Zones, LLC has a vast catalog of products listed on this cooperative that will be utilized to bring the City savings. The catalog lists an average discount of 15% and will assist City staff in sourcing vital products and services.
The final cooperative contract identified and reviewed has been created between Cobb County, GA and Carahsoft. This contract is hosted by Omnia Partners and will assist the IT Department in completing their goals. Carahsoft’s cooperative agreement provides an extensive catalog including over 300 manufacturers that the City will be offered products at a discounted rate. The discounts listed in this agreement offer an average of 8% depending on the manufacturer.
TABLE 3 - Estimated Allocations & Cost Savings
|
Contract Vendor |
Estimated Allocation |
Avg. Discount |
Estimated Cost Savings |
|
CDW |
$ 7,509,000 |
10% |
$ 170,000 |
|
NWN |
$ 5,006,000 |
37% |
$ 590,000 |
|
Zones |
$ 5,006,000 |
15% |
$ 180,000 |
|
Carahsoft |
$ 5,006,000 |
8% |
$ 90,000 |
|
ePlus |
$ 2,503,000 |
15% |
$ 90,000 |
|
Total |
$ 25,030,000 |
|
$ 1,120,000 |
Staff recommend that the Council adopt findings and approve entering into five agreements that offer competitive pricing through leveraged procurements, for a total estimated amount not to exceed $25,030,000 for the term of the contracts, which includes renewal options, for a total of five (5) years.
FINDINGS
Stockton Municipal Code Section 3.68.070(A)(5) provides an exception to the competitive bidding process where the City accesses the terms of a competitively bid and negotiated cooperative purchasing agreement and where the City Council has approved findings that support and justify the exception. The following findings support and justify an exception:
1. The City’s Procurement Office recommends and approves the use of these participating agreements and the City’s Cooperative Purchase Agreement, as it meets the criteria as an exception to the competitive bidding process by way of competitive pricing secured through public procurement sources, making it a valuable alternative to the standard bid requirement.
a. The CDW Agreement was established through a formal competitive bidding process conducted by Omnia Partners, represented by the City of Mesa, Az.
b. The agreement with NWN Corporation was established through formal competitive bidding processes conducted by the Department of General Services.
c. The agreement with ePlus was confirmed to be established through a formal competitive bidding process, conducted by the Department of General Services.
d. The cooperative agreement with Zones, LLC was established through a formal competitive bidding process conducted by Omnia Partners, represented by Region 14 ESC - TX.
e. The agreement with Carahsoft was established through a formal Competitive bidding process conducted by Omnia Partners, represented by Cobb County, Ga.
2. Participation in these five agreements will provide significant cost savings from lower prices, reduced freight charges, and more efficiently utilized City resources, create efficiencies for staff to acquire products and services in a timely manner. These cooperative agreements take advantage of established long-term agreements rather than performing repetitive transactional bidding.
3. Pursuant to Public Contract Code Sections 10298-10299 the State Department of General Services may consolidate the needs of multiple agencies and leverage the state’s buying power through a competitive process to achieve better pricing for goods and services, and these leveraged procurement agreements are available to cities without further competitive bidding.
FINANCIAL SUMMARY
All purchases of Information Technology Solutions and Services made from the five (5) contracts as shown in Table 3, utilizing multiple cooperative agreements, for a total estimated amount of $25,030,000 for the term of the contracts (including renewal option terms) will be funded through the Technology Internal Service Fund 510, project accounts, or department accounts and will not exceed budget authority approved through the annual budget process for FY 2024-25. Future annual costs estimated through FY 2028-29 will be included in the annual budget appropriation process. There is no impact to the General Fund.
Attachment A - Cooperative Agreements Summary
Attachment B - Cooperative Purchase Agreement with CDW-G
Attachment C - Cooperative Purchase Agreement with NWN
Attachment D - Cooperative Purchase Agreement with ePlus
Attachment E - Cooperative Purchase Agreement with Zones
Attachment F - Cooperative Purchase Agreement with Carahsoft