SR 07-11-2017 3J
Ci ty Council
Report
City Council Meeting : July 11, 2017
Agenda Item: 3.J
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To: Mayor and City Council
From: Joseph Cevetello, Chief Information Officer , Information Systems Department
Subject: Approve Agreements for the purchase of computer equipment and related
installation and maintenance services
Recommended Action
Staff re commends that the City Council:
1. A ward RFP #96 to Insight Public Sector, an Arizona -based company, for
deployment and installation services for the City’s desktop computer systems
and to Hewlett Packard, a California -based company, for the purchase and
warranty coverage of computer equipment ;
2. Authorize the City Manager to negotiate and execute a contract with Insight
Public Sector in an amount not to exceed $389,000 , including a $39,000
contingency, over a four -year period; and,
3. Authorize the Pur chasing Services Manager to issue a purchase order to Hewlett
Packard in an amount not to exceed $3,26 1 ,000 , including a $297,000
contingency, over a four -year period .
Executive Summary
T he Information S ervices Department (ISD) administers the City’s Comp uter Equipment
Replacement Program (CERP), which covers the purchase, installation and
maintenance of the City’s desktop computer systems, laptops, printers, servers and
other computer equipment. The majority of the City’s desktop computers and monitors,
including installation and maintenance services for CERP are procured from the City’s
master -purchase agreement with Hewlett Packard (HP). In anticipation of the
termination of the City’s agreement with HP in June 2017, staff conducted a competitive
biddi ng process in January 2017, to select a hardware and service provider for a new
multi -year agreement. As a result of the bidding process, staff recommends executing
two new agreements; 1) a four -year service agreement with Insight Public Sector, for
insta llation and deployment services of HP computer equipment, in an amount not to
exceed $389,000, including contingency; 2) a purchase order with HP for the purchase
and warranty coverage of computer equipment over a four -year period, in an amount
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not to exce ed $3,2 61 ,000, including contingency .
Background
U nlike most city governments that purchase computer equipment on a "pay as you go"
basis, Santa Monica installs, supports and maintains the City's computer technology
under a centralized purchasing program, the Computer Equipment Replacement
Program (CERP). CERP was established to standardize the City’s technology, as well
as ensure that computer equipment is properly maintained and re placed regularly, to
remain compliant with modern technology requirements .
Currently, the Information Services Department (ISD) manages approximately 2,100
desktop computers, laptops and tablets, 300 auxiliary computer monitors, 300 printers,
350 servers, various network equipment and all enterprise software. Funding for futu re
replacement of technology included in CERP is established at the time of purchase, and
includes the purchase price plus an annual depreciation cost that will fund its
replacement at the end of the life cycle. These funds are set aside in the Computer
T echnology Replacement and Services Fund and are used to replace computer
hardware, generally on a four -year cycle.
In February 2013 (Attachment A), Council authorized a four -year agreement with HP
(#9710 CCS) in an amount not to exceed $1,600,000, for t he purchase of desktop
computer equipment, installation services to refresh all end -of -life systems, four -year
warranty for product replacement , and on -site maintenance support. In September
2016 (Attachment B), Council authorized a first modification of the agreement to
increase the contract amount by an additional $700,000 to purchase additional
equipment. The term of that agreement expired in June 2017 .
Discussion
CERP was established over fifteen years ago to centrally administer purchases,
installa tions and maintenance of the City’s computer equipment, ensuring that the City’s
computer equipment is properly maintained and regularly refreshed. CERP now
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includes most types of hardware purchased from multiple sources, and staff computer
systems are ge nerally purchased from one contracted vendor, through a master
purchase agreement.
Installation services and purchase agreement
The City has historically had one vendor that provided the computer hardware, and
subcontracted the installation and warranty s ervices to a separate service provider.
Under the City’s previous agreement with HP, staff would purchase the equipment from
HP and HP would oversee that the installation services were delivered in accordance
with City requirements. In cases where the sub contractor did not meet the City’s
performance expectations, the City could request for HP to assign a new service
provider. This occurred in one case, under the previous contract, where the service
provider did not perform according to contracted expecta tions and the City asked HP to
assign a new subcontractor to provide the service.
In preparation for the termination of the City’s agreement with HP, staff conducted a
competitive bid process in January 2017, seeking a new hardware vendor and services
pro vider for a new multi -year agreement. Unlike the previous bid processes which
consistently yielded bids directly from hardware vendors (HP, Dell and Lenovo) who
subcontracted their services for installation and warranty repairs, this year’s process
yielde d bids directly from the service providers. These service providers partnered with
major hardware manufacturers (HP, Dell and Lenovo), submitting bids to provide both
the installation services as well as to resell computer hardware from their hardware
par tners. Under this scenario, the City could enter into one master agreement with the
installation service provider for both the purchase of services and hardware purchases;
however, this is not ideal as it would bundle the service and hardware together, wit hout
the flexibility to change one without the other. This would mean that the City would not
have the flexibility to change service providers, if not performing according to contracted
expectations, without losing the ability to purchase computer equipme nt .
It is for the above reasons that staff recommends separating the service and purchase
components into two separate contracts; 1) with the installation and deployment
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services provider; and 2) with the hardware manufacturer for the purchase of hardwa re
and warranty coverage.
Service and hardware selection
Four bids were received through the current bidding process. Bids were evaluated for
adherence to service level and compatibility requirements, as defined in the RFP. Staff
evaluated the service s proposals, with a primary focus on exceptional service delivery.
The goal was to identify a firm that would provide white -glove computer replacement
and installation services, at an affordable price. The chosen vendor would provide an
enhanced customer service experience, by ensuring that new computer systems are
setup promptly and properly, minimizing disruption to City operations.
The primary focus for selecting the hardware, was to select hardware that would be
compatible with City standards, that could help promote mobility through sleek,
lightweight, yet powerful mobile hardware, and has built -in security features and
safeguards to address current mobile security concerns. This is in alignment with the
City’s Total Workplace Initiative, whose go al is to cultivate an environment where staff
can work securely from any device, in any location via wireless access and through
web -based applications.
Staff anticipates that over the next four -year replacement cycle, approximately 80% of
the City’s d esktop computers will be replaced with laptops and tablets. In support of this
mobile technology, the City has continued to implement web -based applications, has
been outfitting City facilities with secured wireless connectivity, and, through future
compu ter replacements, will continue to increase deployment of mobile hardware to
further support the Total Workplace Initiative.
Vendor/Consultant Selection
On November 16, 2016, the City issued a Request for Proposals (RFP) for the
purchase, installation, and maintenance of City desktop computer equipment. The RFP
was posted on the City’s online bidding site and notices were advertised in the Santa
Monica Daily Press , in accordance with City Charter and Municipal Code provisions. A
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total of 1,469 vendors were notified, 69 vendors downloaded the RFP and four firms
responded. Proposals were submitted by the following firms: CoverageOne in
partnership with Dell, Insight Public Sector in partnership with HP, GST in partnership
with Lenovo and PCMG who did no t partner with a hardware manufacturer. Responses
to the RFP were reviewed by a selection panel of staff from the Information S ervice s
Department. Evaluation was based on the following selection criteria: cost of equipment
and services, service deployment strategy, experience/technical competence, value
added, stability and references, and sustainability practices. Staff then interviewed all
service providers, including the hardware manufacturers.
Based on this criteria and criteria in SMMC 2.24.072, staf f recommends Insight Public
Sector as the best bidder to provide computer replacement and installation services in
accordance with the City specifications. Staff also recommends HP for the purchase of
computer hardware. Insight Public Sector and HP were the lowest bidders, best
meeting the City’s requirements for services and product quality. Insight’s proposed
deployment strategy best aligned with the City’s expectation of white -glove service
delivery, and Insight has had extensive experience managing s imilar engagements for
the City Detroit in Michigan, Mesa Public Schools in Arizona, and Covina Valley Unified
School District in California. Insight received praise from all three references for their
exceptional service delivery, experience, and profess ionalism. HP’s product line is
compatible with City standards, promotes mobility through sleek, lightweight, yet
powerful mobile hardware, and has a product line with built -in security features and
safeguards to address current mobile security concerns.
At this time, staff recommends awarding RFP #96 to Insight Public Sector for computer
replacement and installation services and to HP for the purchase of computer
equipment and warranty coverage . This would result in a four -year services agreement
with In sight Public Sector in the amount of $389,000 and a four -year purchase order
with HP for hardware and warranty coverage in the amount of $3,2 6 1,000. The
combined total contract amount would not exceed $3,6 5 0,000. This proposed contract
amount reflects t he cost to refresh the City’s current inventory of systems, accounts for
future growth estimated at 10% based on equipment purchase request trends, and
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accounts for increased hardware costs for laptop workstation -type setups, which are
significantly more c ostly, as they require a docking station, extended monitor and
keyboard/mouse (depending on the specific setup).
Funding for equipment replacements has been set aside as part of CERP, and is
available in the Information Technology Replacement and Services Fund .
Financial Impacts and Budget Actions
T he contract to be awarded to Insight Public Sector is for an amount not to exceed
$389,000 . Funds in the amount of $100,000 are available in the FY 2017 -18 Capital
Improvement Program budget in account C5500031 4.589000. T he purchase order to be
awarded to HP is for an amount not to exceed $3,26 1 ,000. Funds in the amount of
$816,000 are available in the FY 2017 -18 Capital Improvement Program budget in
account C55000314.589000. Future funding is contingent upon Council budget
approval .
Prepared By: Yvonne Varela, Administrative Analyst
Approved
Forwarded to Council
Attachments:
A. February 12, 2013 Staff Report (web link)
B. September 13, 2016 Staff Report (web link)
C. OAKS INITIATIVE FORM - Insight Public Sector
D. OAKS INITIATIVE FORM - HP, Inc.
:-i .. o• Sanla Moal•a " CITY OF SANTA MONICA
OAKS INITIATIVE DISCLOSURE FORM
In order to facilitate compliance with the requirements of the Oaks Initiative, the City
compiles and maintains certain information. That information includes the name of any
person or persons who is seeking a "public benefit." If the "public benefit" is sought by
an entity, rather than an individual person, the information includes the name of every
person who is: (a) trustee, (b) director, (c) partner, (d) officer, or has (e) more than a ten
percent interest in the entity.
Public benefits include:
1.Personal serv ices contracts in excess of $25,000 over any 12-month period;
2.Sale of material, equipment or supplies to the City in excess of $25,000 over a 12-
month period;
3.Purchase, sale or lease of real property to or from the City in excess of $25,000
over a 12-month period;
4.Non-competitive franchise awards with gross revenue of $50,000 or more in any
12-month period;
5.Land use variance, special use permit, or other exception to an establi shed land
use plan, where the decision has a value in excess of $25,000;
6.Tax "abatement, exception, or benefit" of a value in excess of $5,000 in any 12-
month period; or
7 .Payment of "cash or specie" of a net value to the recipient of $10,000 in any 12-
month period.
Name(s) o f p er sons or ent ities receiving p ublic benefit:
Insight Public S ector, I nc.
Na me(s) of trustees, directors, partners, and officers:
K enneth Lamneck- CEO a nd President
Glynis Bryan- Chief Financial O f ficer
David Cr istal- V P a nd Gene ral Manager
Name(s) of persons with more than a 10 % equity, p articipation, or revenue interest:
N o ne
Prepared by : E rica Falchetti
Signature: G (,:;,,:i,Q�
E m a il : erica.falchetti@insight.com
FOR CITY USE ONLY:
Bid/PO/Contract # _________ _
Title: Capture Manager
Date: A pril 10, 2017
Phone: 480-333-3071
Permit # ________ _
REFERENCE:
Contract No. 10495
(CCS)