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ADOPT A MOTION APPROVING FINDINGS AUTHORIZING EXCEPTIONS TO THE COMPETITIVE BID PROCESS FOR THE PURCHASE AND IMPLEMENTATION OF MICROSOFT OFFICE 365 LICENSES, EXECUTION OF AN AGREEMENT FOR EMAIL MIGRATION SERVICES AND EXECUTION OF AN AGREEMENT FOR DOCUMENT MIGRATION SERVICES.
recommended action
RECOMMENDATION
Staff recommends the City Council adopt a motion taking the following action:
1. Approve findings which support and justify an exception to the competitive bid process for the purchase of up to 1,600 Microsoft Office 365 licenses by authorizing the City Manager to execute an agreement with CompuCom Systems, Inc., for an annual cost not to exceed $375,000, for word processing, spreadsheet, email, and other business office software under the terms established in the County of Riverside cooperative purchasing agreement (Attachments A and B) and
2. Approve findings which support and justify an exception to the competitive bid process and authorize the City Manager to execute an agreement with Strategic Products and Services, LLC (ExtraTeam Inc. an SPS Company), in the amount of $100,000 for email migration services using the State of California Multiple Award Schedules (CMAS)( Attachment C); and
3. Approve findings which support and justify an exception to the competitive bid process and authorize the City Manager to execute an agreement with Kiefer Consulting not to exceed $100,000 for document management migration services using CMAS; and
4. Authorizing the City Manager, or his designee, to execute all documents necessary and appropriate to carry out the purpose and intent of this motion.
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Summary
The purchase of Microsoft Office 365 licenses will allow the City to migrate from Novell's GroupWise email system to Microsoft Exchange/Outlook which is a more industry standard, stable and robust email system. In addition to Outlook, Microsoft Office 365 licenses include: Word, Excel, PowerPoint, Publisher, OneNote, and SharePoint. Additionally, migrating to Microsoft Office 365 provides for centralized document storage and meets regulatory and eDiscovery requirements.
DISCUSSION
Background
Due to significant operating issues, replacing the City's email system has been under consideration for several years. The Information Technology Department (IT), working in collaboration with departmental staff, is recommending the City move from Novell GroupWise to Microsoft Office 365.
Information Technology's highest priority is to continue to provide a range of systems that City departments can rely on including basic email, calendar, and email address directory as well as ease of email access from all devices. We continue to strive for an easy-to-use, reliable, secure, 'always on' IT infrastructure on our clients behalf.
In addition to providing the City a more stable and robust email system, the move to Microsoft Office 365 also offers:
· Licensing for Word, Excel, PowerPoint, Publisher, OneNote, and SharePoint
· Centralized document storage which meets regulatory and eDiscovery requirements
· Seamless access to documents from multiple devices
· Maintaining all City users on the most current software
· Better integration with products already in place at the City such as Accela Electronic Permits, CityWorks Computerized Maintenance Management System, ProLaw Legal Case Management System and mobile devices, as well as providing a foundation for modernizing web development and document management
· Cloud-based licensing, maintenance, and backups
· Broad universe of support and expertise from Microsoft
· Microsoft Office 365 meets and exceeds Stockton's obligations from a legal and regulatory compliance perspective and aligns with Stockton's information security requirements
· Microsoft Office 365 has a proven track record of delivering industry expertise and value to business organizations; Microsoft Office 365 delivers the reliability, transparency, and control that empower IT to efficiently serve departments
· Organizations expect services that are supported by rigorous operational practices and processes regarding security and data handling; Microsoft Office 365 is independently verified to meet requirements specified in the most rigorous State and Federal security standards
· Technological compatibility with other public agencies, partner organizations and vendors
Present Situation
The City of Stockton, IT Department, supports GroupWise email and Microsoft Office Standard for approximately 1,600 employees. These applications are the primary productivity tools used for managing day-to-day business functions and communication. The current annual investment for these products is estimated to be $1,085,436 for FY 14/15, $955,726 in FY 15/16, $1,462,886 in FY 16/17, and 1,025,557 in FY 17/18. These figures, which are summarized in the chart below, represent the costs for licenses, hardware, software, staffing, and maintenance. These costs do not include estimates for intangible loss, such as productivity losses caused by unplanned system downtime and from using systems which are not fully integrated.
Current Year
Business Solution |
FY 14/15 |
GroupWise & Office 2010 (Planned) |
$1,085,436 |
GroupWise & Office 2010 (Actual) |
$348,000 |
Funds available |
$737,436 |
|
|
Microsoft Office 365 |
$589,505 |
Calculated savings |
$147,931 |
Once the decision was made to recommend moving to Microsoft Office 365, expenditures previously planned to support the ongoing use of GroupWise and Office 2010 were suspended, resulting in $737,436 available for funding the Microsoft Office 365 initiative. Of this available funding, $589,505 will be utilized to initialize the Microsoft Office 365 project in FY 14/15, with the remaining balance of $147,931 carried over to FY 15/16 as part of the fund balance.
Ongoing Savings
Business Solution |
FY 15/16 |
FY 16/17 |
FY 17/18 |
3-year totals |
GroupWise & Office 2010 |
$955,726 |
$1,462,886 |
$1,024,557 |
$3,443,169 |
Microsoft Office 365 |
$806,676 |
$804,195 |
$826,280 |
$2,437,151 |
Calculated savings |
$149,050 |
$658,691 |
$198,277 |
$1,006,018 |
Beginning with FY 2015/16, the move to Microsoft Office 365 will provide savings to the City of more than $1,006,018, over the next three fiscal years in licensing, support, and staffing. The savings is based on the Total Cost of Ownership (TCO). The TCO calculates actual savings from the costs as well as redeployment of staff resources.
The CompuCom agreement for the purchase of the licenses has guaranteed pricing for three years. Prior to the end of the third year, the City will conduct a bid process or recommend utilizing another cooperative purchasing agreement. This gives the City the flexibility to examine other products and seek the best pricing.
The migration services are critical to the success of the transition to Microsoft Office 365. The City has been using Groupwise since the early 1990's and we estimate that there are currently over 60 million Groupwise e-mails and one million Groupwise documents. These records need to be cleaned up and organized and many converted to a Microsoft compatible format. The agreements with ExtraTeam for e-mail migration services and with Kiefer Consulting for document migration services are each not to exceed $100,000 as indicated in the attached contracts and the term for each is until the work is completed (Attachments D-F). The overall transition from the current use of GroupWise and Microsoft Office 2010 will be completed by November 2015.
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 findings are as follows:
· Utilizing current Microsoft technology will generate an increase in user productivity by enabling integration with other automated systems the City is currently using.
· Riverside County has established a cooperative purchase agreement with CompuCom Systems, Inc. and offers all entities within the State of California the same Terms and Conditions, the same price and for the same effective period.
· Riverside County established these cooperative purchase agreements pursuant to a competitive bidding process.
· The bid specifications used by Riverside 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.
· The California Multiple Award Schedules (CMAS) offers a wide variety of commodities, non-IT services and information technology products and services at prices which have been assessed to be fair, reasonable and competitive.
· By using the Riverside County cooperative purchasing agreement with CompuCom Systems for the Microsoft Office 365 licenses and CMAS for email and document management migration, the City will realize substantial savings.
FINANCIAL SUMMARY
Expenditures for the purchase of 1,600 user licenses for Microsoft Office 365, migration of GroupWise documents and email are not to exceed a total of $575,000, itemized as follows:
· Microsoft Office 365: $375,000
· Email migration services: $100,000
· Document management migration services: $100,000
There is available appropriation in the Computer Internal Service Fund, account number 502-5101-571, to cover the FY 14-15 estimated cost of $575,000.
Future annual cost estimated at $375,000 for the ongoing subscription of Microsoft Office 365 will be included in the annual budget.
Attachment A - County of Riverside Cooperative Purchasing Agreement with CompuCom, Contract ID RIVCO-20800-002-12
Attachment B - Amendment #1 to County of Riverside Cooperative Purchasing Agreement with CompuCom, Contract ID RIVCO-20800-002-12, extending the agreement to 12/31/2015
Attachment C - State of California CMAS
Attachment D - Contract - CompuCom Systems, Inc.
Attachment E - Contract - Strategic Products and Services, LLC
Attachment F - Contract - Kiefer Consulting, Inc.