TO:
Honorable Mayor and Members of the City Council
THROUGH:
Bruce Moe, City Manager
FROM:
Patrick Griffin, Interim Information Technology Director
Tatyana Roujenova-Peltekova, Senior Management Analyst
SUBJECT:Title
Consideration of a Resolution Approving a Three-Year Agreement with Dell for Microsoft Enterprise Software Licensing with a Total Value of $649,326 (Interim Information Technology Director Griffin).
A) WAIVE FORMAL BIDDING DUE TO COOPERATIVE PURCHASING
B) ADOPT RESOLUTION NO. 23-0097
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Recommended Action
RECOMMENDATION:
Staff recommends that the City Council:
a) Waive formal bid requirements pursuant to Manhattan Beach Municipal Code Section 2.36.150 (cooperative purchasing); and
b) Adopt Resolution No. 23-0097 approving a three-year contract with Dell for Microsoft Enterprise software licensing with a total value of $649,326.
FISCAL IMPLICATIONS:
Funding for year one is included in the Information Technology Fiscal Year 2023-2024 budget. Funding for years two and three will be allocated in future budgets.
BACKGROUND:
The City utilizes Microsoft (MS) products on a daily basis to provide a variety of services. Some of the MS products in place include Word, Excel, PowerPoint, Outlook, Windows servers, and email servers. These tools enable staff to access and generate data and provide reports, including communication and research tools to effectively complete work tasks. Microsoft supplies the licensing and software updates for these products through an Enterprise Agreement (EA) with the City. Since Microsoft does not sell directly, but only through authorized resellers, the current three-year MS Enterprise Agreement is with Dell, and is scheduled to expire in August 2023.
DISCUSSION:
In order to continue providing City staff, volunteers, and elected and appointed officials access to the MS suite of products and services, the City needs to execute a new three-year Enterprise Agreement. After including all the required products and the number of licenses, the cost of the EA is $216,442 per year, or a total of $649,326 for the entire three-year term.
The proposed licensing cost also includes Microsoft Office 365 subscription services for the duration of the contract. The City has been planning to migrate the organization from the current on premise Microsoft Office suite to cloud-based Microsoft Office 365 (MS Office 365). MS Office 365 is a subscription providing services in the cloud for Word, Excel, PowerPoint, and Outlook. It provides the same base functionality and suite of services including Word, Excel, PowerPoint, and Outlook. In addition, MS Office 365 provides additional features and functionality such as Microsoft Teams (collaboration tool) and OneDrive (data storage and sharing).
Cooperative Purchasing
Whenever practical and in the City's best interest, the City utilizes cooperative purchasing, also known as “piggybacking” onto contracts that are economically advantageous. Piggybacking is the extension of pricing, terms, and conditions of one agency's contract to other governmental agencies with the mutual consent of all parties. This is permissible under the City's Municipal Code, Section 2.36.150 (Cooperative Purchasing). Dell’s proposed pricing utilizes the competitively awarded Master Enterprise Agreement negotiated by the County of Riverside. Riverside County Microsoft (Master) Enterprise Agreement leverages California state and local government desktop volumes to achieve the best prices. Based on that master contract, Microsoft offers a customized EA to government agencies within the state to streamline the acquisition process by applying the most cost-effective pricing.
Once the license agreement is in place, the Information Technology Department will continue its planning efforts for the phased implementation of Microsoft Office 365 throughout the organization. Because MS Office 365 has a different user interface than the current Microsoft suite of products, IT will be rolling out the implementation in a structured and phased approach over several months.
Based on this available piggyback opportunity, staff recommends City Council authorize the City Manager to execute a contract with Dell for an agreement term of 3 years and a total cost of $649,326.
PUBLIC OUTREACH:
Staff determined that public outreach was not required for this item.
ENVIRONMENTAL REVIEW:
The City has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that there is no possibility that the activity may have a significant effect on the environment; therefore, pursuant to Section 1506 (b)(3) of the State CEQA Guidelines, the activity is not subject to CEQA; thus no environmental review is necessary.
LEGAL REVIEW:
The City Attorney has approved the agreement as to form.
ATTACHMENTS:
1. Resolution No. 23-0097
2. Agreement - Dell (Microsoft Enterprise)
3. Dell Quote