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SR 09-26-2023 5F City Council Report City Council Meeting: September 26, 2023 Agenda Item: 5.F 1 of 5 To: Mayor and City Council From: Christopher Smith, Acting Chief Information Officer, Information Services Department Subject: Approval of Agreements with Zones and Hewlett Packard for City Computer Equipment Recommended Action Staff recommends that the City Council: 1. Adopt a finding of Categorical Exemption pursuant to Section 15061(d)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines. 2. Authorize the Procurement Manager to issue a change order to purchase order #22400546 in the amount of $100,588 with the Hewlett Packard Corporation for computer equipment for the Information Services Department. This would result in a revised purchase order total not to exceed $350,588. 3. Authorize the City Manager to negotiate and execute an agreement with Zones Corporation for computer equipment and installation services for the Information Services Department. This recommended award is made as an exception to the competitive bidding process pursuant to Section 2.24.250 (c) and is for a five- year total amount not to exceed $7,864,000 with future year funding contingent on Council budget approval. 4. Authorize budget changes as outlined in the Financial Impacts & Budget Actions section of this report. Summary The City maintains a fleet of approximately 2,000 laptops and desktops for staff and at public kiosks. The City suspended its Computer Equipment Replacement Program (CERP) in 2020 as part of the City’s fiscal rightsizing following the COVID-19 pandemic. This means that more than half of today’s computer fleet is over four years old, resulting in increased computer failures and repairs and security vulnerability as technology ages. Staff now proposes to restart CERP in FY 2023-24, replacing 25% of the City’s 5.F Packet Pg. 1041 2 of 5 computer fleet annually. Staff also seeks to replace approximately 100 mobile data computers (MDCs) used by the Santa Monica Police Department in their vehicles. To do this, staff requests authorization to enter into a five-year agreement with Zones to purchase computer equipment and associated services supporting the deployment and decommissioning of equipment as well as authorization to modify the City’s existing purchase order with Hewlett Packard to ensure the City can continue to purchase computer equipment on an emergency basis until the program can be restarted early next year. Discussion The City operates a modern, secure technology infrastructure supporting the City’s departments and staff to conduct their work and provide services to the community. A key part of this technology infrastructure is desktop and laptop computers for staff and at public kiosks. The City has historically replaced its computers every four years to ensure that they are secure, work reliably, and up to date. However, the City suspended CERP in 2020 due the financial impacts of the COVID-19 pandemic. This means, over 1,000 of the City’s computers are now over four years old and staff are relying on fragile and outdated computers while there have been enormous demands added to the City’s technology environment to support online meetings and collaboration, new software systems, enhanced cyber and information security protection, and other factors. Since 2022, the City has piggy backed off the State of California’s National Association of State Procurement Officials (NASPO) participating addendum to procure computer equipment from Hewlett Packard on an as-needed, emergency basis. The proposed modification to the current purchase order with Hewlett Packard Corporation would exceed the City Manager’s threshold and requires Council approval. Staff now propose to restart CERP to ensure staff and public kiosks have reliable computer equipment that supports the modern ways of working while meeting the City’s technical and information security requirements. Additionally, the MDCs installed in the 5.F Packet Pg. 1042 3 of 5 Santa Monica Police Department’s vehicles are now over eight years old and staff seek to replace this equipment at this time. In assessing the marketplace, staff evaluated computer equipment from the top manufacturers and determined that Dell laptops and desktop computers best meet the City’s technical requirements for computing. Staff also examined recent competitive bids completed by local agencies and identified a bid conducted by the Port of Los Angeles that was awarded to Zones. Zones currently provides the City’s 24/7 first tier computer support and some disaster recovery services and therefore knows the City’s computing environment. Zones has offered the City a 60% minimum discount on Dell equipment as part of this proposed agreement. Vendor Selection Agreement with Zones for Computer Equipment Replacement Program Exception to Competitive Bidding Staff recommends Zones to furnish and provide computer equipment and installation services as an exception to competitive bidding per Santa Monica Municipal Code Section 2.24.250 (c). This request is leveraging competitive pricing piggy backing off the City of Los Angeles Harbor Department Bid Number F-1137, formal request for cooperative agreement for IT Equipment, Supplies and Related Services. Zones is offering Dell laptop, desktop and MDC computers at a 60% to 66% discount from the manufacturer’s suggested retail price. They are also providing configuration, deployment, and decommissioning services of the computer equipment. Additionally, Zones currently provides the City’s 24/7 first tier computer support and some disaster recovery services and therefore knows the City’s computing environment. c. competitive procedures were followed by a governmental agency, federal, state, county, city, joint powers agency, special district, or cooperative purchasing agency and the goods or services are supplied to the City at the same or better price Change order to Purchase Order with Hewlett Packard Exception to Competitive Bidding Staff recommends Hewlett Packard to furnish and provide computers on an as needed basis as an exception to competitive bidding per Santa Monica Municipal Code Section 2.24.250 (c). This request continues to leverage competitive pricing piggy backing off the State of California’s Participating Addendum under the NASPO ValuePoint Computer Equipment, Peripherals & Related Services contract (Master Agreement – State of Minnesota, extended through October 31, 2023). The discounts offered through this agreement range between 18% and 28% off baseline list, with additional discounts on bulk orders. c. competitive procedures were followed by a governmental agency, federal, state, county, 5.F Packet Pg. 1043 4 of 5 city, joint powers agency, special district, or cooperative purchasing agency and the goods or services are supplied to the City at the same or better price Environmental Review The award agreement and purchase order modification to provide computer equipment and related services and purchase order modification to provide computer equipment is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the CEQA Guidelines. The award agreement is covered by the common sense exemption which states that CEQA does not apply, where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. The agreement and purchase order will allow the City to continue to procure computer equipment and related services. Therefore, it can be seen with certainty that the agreement would not result in adverse physical impacts on the environment, and as such, is categorically exempt from CEQA. Financial Impacts Staff seeks authority to approve funding from the Information Services & Technology Replacement Fund and the General Fund to award an agreement with Zones for the purchase of computer equipment and associated deployment services and to issue a change order to the purchase order with Hewlett Packard for the purchase of computer equipment on an as-needed basis. Award of the agreement to Zones and modifying the purchase order with Hewlett Packard requires the following budget change: FY 2023-24 Budget Change Appropriate Funds Fund Account Number Amount Information Services & Technology Replacement C7100030.689000 CERP 658,000 5.F Packet Pg. 1044 5 of 5 The appropriation from the Information Services and Technology Fund, as previously contributed by the City’s other funds, is required to ensure funds are available in the CERP capital account to fund projected replacements. Agreement Request: Zones FY 2023-24 Request Amount Future Years Amount CIP Account # Total Contract Amount 685,000 6,744,000 C7100030.689000 CERP 7,429,000 410,000 C0105830.689000 Mobile Data Computer Replacement 410,000 25,000 C0107810.689000 Bulk Process Improvement, Modernization, & Digitization 25,000 1,120,000 6,744,000  Total 7,864,000  Purchase Order Modification Request: Hewlett Packard Purchase Order # Current Authorized Amount FY 2023-24 Request Amount CIP Account # Total Revised Amount 22400546 250,000 100,588 C7100030.689000 CERP 350,588 Future year funding is contingent on Council budget approval. Prepared By: Christopher Smith, Acting Chief Information Officer Approved Forwarded to Council Attachments: A. HP OAKS INITIATIVE FORM B. ZonesLLC_Santa Monica_OAKS INITIATIVE FORM 5.F Packet Pg. 1045 CITY OF SANTA MONICA OAKS INITIATIVE NOTICE NOTICE TO APPLICANTS, BIDDERS, PROPOSERS AND OTHERS SEEKING DISCRETIONARY PERMITS, CONTRACTS, OR OTHER BENEFITS FROM THE CITY OF SANTA MONICA Santa Monica’s voters adopted a City Charter amendment commonly known as the Oaks Initiative. The Oaks Initiative requires the City to provide this notice and information about the Initiative’s requirements. You may obtain a full copy of the Initiative’s text from the City Clerk. This information is required by City Charter Article XXII—Taxpayer Protection. It prohibits a public official from receiving, and a person or entity from conferring, specified personal benefits or campaign advantages from a person or entity after the official votes, or otherwise takes official action, to award a “public benefit” to that person or entity. The prohibition applies within and outside of the geographical boundaries of Santa Monica. All persons or entities applying or receiving public benefits from the City of Santa Monica shall provide the names of trustees, directors, partners, and officers, and names of persons with more than a 10% equity, participation or revenue interest. An exception exists for persons serving in those capacities as volunteers, without compensation, for organizations exempt from income taxes under Section 501(c)(3), (4), or (6), of the Internal Revenue Code. However, this exception does not apply if the organization is a political committee or controls political committees. Examples of a “public benefit” include public contracts to provide goods or services worth more than $25,000 or a land use approval worth more than $25,000 over a 12- month period. 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. Therefore, if you are seeking a “public benefit” covered by the Oaks Initiative, you must supply that information on the Oaks Initiative Disclosure Form. This information must be updated and supplied every 12 months. 5.F.a Packet Pg. 1046 Attachment: HP OAKS INITIATIVE FORM (5856 : Computer Equipment Replacement Program) 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 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) of persons or entities receiving public benefit: Name(s) of trustees, directors, partners, and officers: Name(s) of persons with more than a 10% equity, participation, or revenue interest: Prepared by: Title: Signature: Date: Email: Phone: Permit # FOR CITY USE ONLY: Bid/PO/Contract # 5.F.a Packet Pg. 1047 Attachment: HP OAKS INITIATIVE FORM (5856 : Computer Equipment Replacement Program) CITY OF SANTA MONICA OAKS INITIATIVE NOTICE NOTICE TO APPLICANTS,BIDDERS,PROPOSERS AND OTHERS SEEKING DISCRETIONARY PERMITS,CONTRACTS, OR OTHER BENEFITS FROM THE CITY OF SANTA MONICA Santa Monica s voters adopted a City Charter amendment commonly known as the Oaks Initiative. The Oaks Initiative requires the City to provide this notice and information about the Initiative s requirements.You may obtain a full copy of the Initiative s text from the City Clerk. This information is required by City Charter Article XXII Taxpayer Protection.It prohibits a public official from receiving,and a person or entity from conferring,specified personal benefits or campaign advantages from a person or entity after the official votes, or otherwise takes official action,to award a public benefit to that person or entity.The prohibition applies within and outside of the geographical boundaries of Santa Monica. All persons or entities applying or receiving public benefits from the City of Santa Monica shall provide the names of trustees,directors,partners,and officers,and names of persons with more than a 10% equity, participation or revenue interest.An exception exists for persons serving in those capacities as volunteers, without compensation, for organizations exempt from income taxes under Section 501(c)(3),(4),or (6),of the Internal Revenue Code. However,this exception does not apply if the organization is a political committee or controls political committees.Examples of a public benefit include public contracts to provide goods or services worth more than $25,000 or a land use approval worth more than $25,000 over a 12-month period. 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. Therefore,if you are seeking a public benefit covered by the Oaks Initiative,you must supply that information on the Oaks Initiative Disclosure Form. This information must be updated and supplied every 12 months. 5.F.b Packet Pg. 1048 Attachment: ZonesLLC_Santa Monica_OAKS INITIATIVE FORM (5856 : Computer Equipment Replacement Program) 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 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 speci of a net value to the recipient of $10,000 in any 12- month period. Name(s) of persons or entities receiving public benefit: Name(s) of trustees,directors,partners,and officers: Name(s) of persons with more than a 10%equity,participation,or revenue interest: Prepared by: ____________________________Title: __________________________ Signature: ______________________________________Date: ________________ Email: ____________________________________Phone: ____________________ FOR CITY USE ONLY: Bid/PO/Contract # ____________________________ Permit # ___________________________ Jon Bailey VP, Business & Legal Affairs 10/07/2022 Jon.Bailey@zones.com 253-205-3571 Zones, LLC Zones, LLC Board of Directors are: Firoz Lalji (Chairman), and independent BODs; John Bauer, James Jiambalvo, Ken Kirkpatrick, John M. Steel, Yehia Maaty Omar Firoz Lalji - President/CEO 5.F.b Packet Pg. 1049 Attachment: ZonesLLC_Santa Monica_OAKS INITIATIVE FORM (5856 : Computer Equipment Replacement Program)