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APPROVE A MOTION TO ENTER INTO A COOPERATIVE PURCHASING AGREEMENT WITH DELL MARKETING L.P. THROUGH THE STATE OF CALIFORNIA DEPARTMENT OF GENERAL SERVICES.
recommended action
RECOMMENDATION
It is recommended that the City Council approve a motion to:
1. Approve the use of the State of California, Department of General Services (DGS) Participating Addendum Number 7-23-70-55-01 with Dell Marketing L.P., which incorporates the Minnesota NASPO ValuePoint Master Agreement Number 23026, to provide the City access to preferential pricing of Information Technology products, computer equipment, peripherals, and related services.
2. Authorize the City Manager to execute a multi-year Cooperative Purchasing Agreement, expiring June 30, 2025, in an amount not to exceed $4,801,301 with Dell Marketing L.P., for the purchase of Information Technology products and services. The NASPO master agreement initially expires June 30, 2025, but may be extended for up to 36 months in increments determined by the lead state until June 30, 2028.
3. Approve findings which support and justify an exception to the competitive bid process; and
4. Authorize the City Manager or designee to take necessary and appropriate actions to carry out the purpose and intent of the motion.
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Summary
City staff representing Administrative Services and Information Technology conducted a review to determine if savings could be achieved using Cooperative purchase agreements (COOP) that combine the purchasing power of multiple entities to achieve more competitive pricing. The State of California DGS NASPO agreement with Dell Marketing has been identified as offering potential savings.
Utilizing this DGS NASPO agreement will allow the City to continue to support operational activities at competitive prices for desktop computers, rugged mobile data computers (MDCs), laptops, tablets, small servers, computer network equipment, and associated peripheral parts from Dell Marketing L.P. The proposed contract term through June 30, 2025, with optional extensions through June 30, 2028, is for a total amount not to exceed $4,801,301.
DISCUSSION
Background
A recognized ‘best practice’ for local governments is to utilize State of California cooperative agreements that leverage the combined purchasing power of many entities and provide significant benefits to the participating organizations. Cooperative agreements (COOPs) are established through a formal competitive bidding process that meets City requirements and thus fulfills the City’s procedural requirements for full and open marketplace competition. COOPs are negotiated agreements. The combined leverage of numerous participating entities that are represented by a cooperative purchasing group gives the City the ability to receive preferential pricing, terms, and conditions that the marketplace would typically offer only to a much larger organization.
Pursuant to California Public Contract Code section 10298, the State of California, Department of General Services, may consolidate the needs of multiple agencies and leverage the State’s buying power through a competitive and/or negotiated process to achieve better pricing for goods and services. These agreements are available to cities without further competitive bidding.
On September 27, 2016, Council approved Motion 2016-09-27-1201-07 to enter into a Cooperative Purchase Agreement with Dell Marketing through the NASPO ValuePoint Cooperative Purchasing Program. The City Manager granted approval to extend the contract in 2018, 2020, 2021, and 2022. That agreement expired on February 28, 2023.
On April 4, 2023, Council approved Motion 2023-04-04-1203 to provide additional funding to the National IPA Cooperative Agreement, Contract Number 2018011-01, with CDW-G LLC for Dell equipment purchases.
Present Situation
The City currently makes direct purchases of Dell brand products such as desktop computers, MDCs, laptops, tablets, and associated peripheral parts from CDW-G LLC. As shown in Table 1, approximately $1,520,000 was expended on Dell brand products during the recent 12 months under the current contract. Scheduled IT replacements starting in FY 2024-25 through FY 2027-28 are estimated in the amount of $4,364,820, with an additional 10% contingency in the amount of $436,481 for department supplemental purchases and inflationary adjustments. The proposed contract is for a total amount not to exceed $4,801,301.
The State of California's DGS NASPO agreement with Dell has been identified as providing significant benefits to the City. Ongoing access to this agreement provides the City with discounts on Dell’s published list prices. Additional discounts may be negotiated for key orders based upon the preferential terms of the agreement. The agreement also provides ‘no cost’ standard delivery on all City orders.
Table 1 - Replacement Schedule
|
Product Type |
Current Annual Spend |
FY 2024-25 |
FY 2025-26 |
FY 2026-27 |
FY 2027-28 |
Total |
|
IT (Dell) products replacement schedule |
$1,520,000 |
$1,720,145 |
$822,371 |
$1,265,164 |
$557,140 |
$4,364,820 |
|
10% Contingency for Departments |
|
$172,015 |
$82,237 |
$126,515 |
$55,714 |
$436,481 |
|
Total Not to Exceed |
|
$1,892,160 |
$904,608 |
$1,391,679 |
$612,854 |
$4,801,301 |
A City team consisting of representatives from Administrative Services and Information Technology reviewed cooperative agreements offered by the State of California. The DGS NASPO agreement with Dell Marketing offers multi-year support through June 30, 2025, with optional extensions through June 30, 2028, and is available for all Dell hardware purchased and used by the City. The efficiencies gained by participating in COOPs instead of repetitive City processes will save significant staff time and City resources.
Findings
Stockton Municipal Code section 3.68.070 provides an exception to the City’s competitive bidding requirement in cases where the City Council has approved findings that support and justify the exception. The findings are as follows:
1. The Dell agreement was established through a formal competitive bid process conducted by NASPO ValuePoint, represented by the State of Minnesota (lead agency) and incorporated into the State of California, Department of General Services agreement with Dell Marketing L.P.
2. The City, on its own, would pay higher prices for the same goods and services and does not achieve the purchasing volume to obtain the same discounts available through the leveraged procurement agreements negotiated by multi-state cooperatives.
3. Taking advantage of the leveraged procurement agreements negotiated by multi-state cooperatives will also save the administrative expense of City staff conducting separate bulk purchasing procurements.
4. Pursuant to California 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. These leveraged procurement agreements are available to cities without further competitive bidding.
FINANCIAL SUMMARY
The cooperative agreement with Dell Marketing L.P. is for the acquisition of information technology products and services. Total expenditures are not to exceed $4,801,301 through June 30, 2028 (reference Table 1 above for annual breakdown). The FY 2024-25 estimated costs are appropriated in the 510 Technology Fund, Project accounts, and Department accounts.
Future annual estimated costs will be included in the annual budget appropriation process.
Attachment A - Dell DGS NASPO COOP Agreement