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APPROVE EXTENSION OF HYLAND ONBASE HOSTED SOLUTION AGREEMENT WITH NEKO INDUSTRIES, INC.
recommended action
RECOMMENDATION
Staff recommends the City Council approve a motion to:
1. Authorize the City Manager to execute a one year Hyland OnBase Online Hosted Solution Agreement and an additional one-month extension with NEKO Industries, Inc., using the County of Sonoma cooperative purchasing agreement (previously approved by Council on Motion 2017-06-20-1104) for a total amount estimated at $241,241, effective July 1, 2020 through June 30, 2021, with the one-month extension through August 2, 2021. (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 electronically. This software solution is purchased through a reseller, NEKO Industries, Inc. The City is investing in a more comprehensive and strategic approach to electronic document management with the new Enterprise Resource Planning (ERP) system; however, due to the long timeline associated with the implementation of a new ERP system this system is still in use. Once the ERP implementation is completed, the City will work to consolidate document management systems with a focus on leveraging technology investments. Implementation of a citywide document management system is a major project and represents a significant investment. As such, the City is recommending an extension with NEKO to be co-terminus with the County of Sonoma cooperative purchasing agreement, effective July 1, 2020 to August 2, 2021.
DISCUSSION
Background
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 of Hyland OnBase Online.
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, and 10-0365, and later Motions 2014-04-01-1201, 2015-03-24-1203, and 2017-06-20-1104. The current agreement with Neko expires on June 30, 2020.
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. In 2015, upon Council approval, IT implemented Office 365 with SharePoint online. As part of the migration of GroupWise to Office 365, many documents that were stored in GroupWise were moved to SharePoint/Office 365.
The hosting contract with NEKO was extended in 2015 and in 2017 to maintain critical business functions and continue the effort of examining other document management systems and collaborative software as a long-term solution.
Currently, the City is implementing a new ERP system that will reduce the storage requirements and investment needed for a document management system such as OnBase. Once the ERP implementation is completed, the City will work with a consultant to define a plan to retire the use of OnBase.
Present Situation
The most recent agreement with NEKO expires on June 30, 2020. 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 County of Sonoma cooperative purchase agreement with NEKO Industries Inc., effective July 1, 2020 to August 2, 2021.
Approval of the agreement with NEKO will ensure the City’s current hosted document management system is licensed and maintained, to be co-terminus with the County of Sonoma cooperative purchase agreement. Following the approval of this extension, the IT Department will review available options for future renewals and other contracting options, until such time the ERP implementation is completed. Once the ERP implementation is completed, the City will work with a consultant to perform an assessment of OnBase. 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 County of Sonoma cooperative purchase agreement will be utilized to extend the OnBase Hosted Imaging Solutions contract with NEKO Industries, which expires on August 2, 2021. The initial contract term is July 1, 2020, through June 30, 2021, with an optional one-month extension period, for a co-terminus date of August 2, 2021. The renewal amount is $18,557 monthly. The duration of the initial 12-month contract cost is $222,684, with an additional $18,557 for the optional one-month extension. Total contract cost is approximately $241,241. There is sufficient FY 2020-21 budget requested in the Computer Internal Service Fund, account number 502-5101-571. All future estimated annual cost will be 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.