SR 10-10-2017 3L
City Council Report
City Council Meeting: October 10, 2017
Agenda Item: 3.L
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To: Mayor and City Council
From: Joseph Cevetello, Chief Information Officer, Information Systems Department
Subject: First Modification to Microsoft Enterprise Agreement for Software Licenses
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute a first modification to agreement #9975 (CCS) in the amount of $1,390,000 with
Insight Public Sector, an Illinois-based company for the purchase of Microsoft software
licenses, software license upgrades, and license tracking services. This will result in a
five year amended agreement with a new total amount not to exceed $3,402,250 with
future year funding contingent on Council budget approval.
Executive Summary
The Information Services Department (ISD) manages the City’s Microsoft software
purchases through an Enterprise Agreement (EA) with Insight Public Sector. Under the
agreement, Microsoft provides Software Assurance for all software purchases.
Software Assurance ensures that the City can leverage Microsoft technologies and
services, including new product version rights, training, deployment planning, and
support. Over the past three years, the City has increased its purchases of Microsoft
products at higher rate than originally projected, as a result of implementing various City
initiatives, including providing email account licenses to all City officials and Boards and
Commissions members; increased database licenses for applications requiring
advanced database management; and enabling cloud-based services to all City staff for
secure access to City applications. Due to this increase, the City will have expended its
not to exceed contract authority two years prior to the end of the contract term. At this
time, staff seeks approval to modify the agreement with Insight Public Sector to
increase the contract amount to pay for the additional software licenses though the term
of the agreement. This first modification would increase the contract by $1,390,000,
resulting in five-year amended agreement in the amount not to exceed $3,402,250 for
licensing through October 30, 2019.
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Background
On October 14, 2014 (Attachment A), Council authorized a contract with Insight Public
Sector in the amount of $2,012,250 over a five year period for the purchase of Microsoft
software licenses, software license upgrades, and license tracking service. Over the
past three years, the City has increased its use of licenses for Microsoft software and
cloud services by 138% and database management licenses by 25%, as compared to
the license count taken at the inception of the agreement. This increase has resulted in
the need to modify the agreement, prior to the end of the contract term, to pay for the
additional licenses.
Discussion
The Microsoft Enterprise Agreement (EA) is a comprehensive volume licensing program
designed for organizations like the City that have standardized on Microsoft technology.
Through the EA program, Microsoft offers substantial cost savings over standard
license pricing over a multi-year period. The EA consolidates software purchases
across the City while streamlining the software license management and tracking
process. The EA provides Software Assurance, which provides Microsoft technologies
and services including new product version rights, training, deployment planning, and
support.
Over the past three years, the City has increased its purchases of Microsoft products at
higher rate than originally projected, as a result of implementing various City initiatives,
including providing email account licenses to all City officials and Boards and
Commissions members; increased database (SQL) software licenses needed for new
City applications requiring advanced database management; and enabling cloud-based
services to all City staff to allow for anytime, anywhere, secure access to City
applications.
Microsoft offers various tiers of licensing to accommodate for employee role-based
deployment. ISD has been leveraging this type of licensing to achieve cost savings by
deploying licenses with limited functionality (email-only being the most basic) based on
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employees’ needs. However, it is anticipated that with City’s increasing reliance on
cloud-based software services, costs will continue to increase. This assumption is
incorporated into the costs included in the contract modification. ISD will continue to
closely manage the City's licensing model, adjusting license levels to optimize savings.
As well as continue to leverage research and advisory services from its membership
with Gartner, Inc. to adopt industry best practices in license management. Staff will
return to Council in 2019, prior to the expiration of the current agreement to request
approval of a new multi-year Microsoft licensing agreement upon completion of a
competitive process.
Funding for this modification and for all enterprise software license purchases have
been set aside as part of the Computer Equipment Replacement Program, and are
available in the Information Technology Replacement and Services Fund.
Vendor/Consultant Selection
In November 2011, the County of Riverside issued a Request for Proposals (RFP) and
conducted a similar process again in May 2014 for the purchase of Microsoft licenses.
In both cases, the County of Riverside selected Insight Public Sector as the company
with the most competitive pricing and best-suited to provide Microsoft software licenses,
software license upgrades, and license tracking services. Under the terms of the RFP
and the resulting contract, similar pricing is also offered to other government agencies in
the State of California under cooperative purchase agreements. The County of
Riverside indicated that the pricing offered by Insight Public Sector under their contract
was the most competitive available, except for pricing offered to Federal Government
agencies, which is not available to local government agencies. As a result, staff
recommended piggy-backing from that agreement as opposed to issuing an RFP.
Piggybacking is the post-award use of a contractual process that allows an agency that
was not involved in the original competitive procurement to purchase the same
supplies/equipment through that original process. Many local government agencies
have taken advantage of the pricing offered under the County of Riverside contract,
including the State of California. Pursuant to section 2.24.080(b) of the Santa Monica
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Municipal Code, Exception to Competitive Bidding, staff recommended contracting with
Insight Public Sector for a period of five years.
Financial Impacts and Budget Actions
The contract modification to be awarded to Insight Public Sector is $1,390,000, for an
amended contract total not to exceed $3,402,250. Funds of $235,763 are available in
the FY 2017-18 Capital Improvement Program budget in account C55000314.589000.
Future year funding is contingent on Council budget approval.
Prepared By: Oscar Santiago, Principal Administrative Analyst, ISD
Approved
Forwarded to Council
Attachments:
A. October 14, 2014 Staff Report (web link)
B. OAKS INITIATIVE FORM - Insight Public Sector - 04.10.2017
:-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 services 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 established landuse 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; or7.Payment of "cash or specie" of a net value to the recipient of $10,000 in any 12-
month period.
Name(s) of persons or entities receiving public benefit:
Insight Public Sector, Inc.
Name(s) of trustees, directors, partners, and officers:
Kenneth Lamneck- CEO and President
Glynis Bryan- Chief Financial Officer
David Cristal- VP and General Manager
Name(s) of persons with more than a 10% equity, participation, or revenue interest:
None
Prepared by: Erica Falchetti
Signature: G (,:;,,:i,Q�
Email: erica.falchetti@insight.com
FOR CITY USE ONLY:
Bid/PO/Contract# _________ _
Title: Capture Manager
Date: April 10, 2017
Phone: 480-333-3071
Permit# ________ _
REFERENCE:
FIRST MODIFICATION TO
AGREEMENT NO. 9975
(CCS)