City of Culver City, California
City Council Agenda Item Report
RECOMMENDATION:
Staff recommends the City Council approve an agreement (Enterprise Agreement)
with Microsoft Corporation (Redmond, WA) using Dell, Inc. (Round Rock, TX) as the
Large Account Reseller (LAR) for PC Operating Systems, Office Professional
Software, Client Access Licenses, and Software Assurance on Server Licenses.
BACKGROUND:
The City relies on Microsoft Operating Systems, Office Productivity Software, Client
Access Licenses (CALs) and Server Products to run its desktop computers and
servers. Microsoft Office includes word processing and spreadsheet applications
along with presentation and database software. Office’s E-mail and Internet
software is used for communication and research on a daily basis.
The City also has purchased a range of department-specific software for handling
financial transactions, time keeping, police and fire record keeping, public works
requests for service and many other functions. These applications reside on the
City’s desktops or servers using the Microsoft products as a foundation to do their
work.
In 2003 the City entered into an Enterprise Agreement modeled on the County of
Riverside Microsoft Enterprise Agreement. It expires in October of 2008. This
program bundles desktop and server licensing into a single program with favorable
Meeting Date: 09/08/08 Item Number: C-6
AGENDA ITEM: (1) Waiver of the Competitive Bidding Procedures Pursuant to
Section 3.07.065 of the Culver City Municipal Code and (2) Approval of an
Enterprise Agreement with Microsoft Corporation (Dell, Inc. LAR) for PC
Operating System, Office Professional software, Client Access Licenses, and
Server Licenses.
Contact Person/Dept.: John H. Richo Phone Number: (310) 253-5950
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Public Hearing: [] Action Item: [] Attachments: [X]
Public Notification:
Dell Inc. (Eddie Munoz 08/12/08), Master E-Mail Notification List (09/03/08)
Department Approval:
John H. Richo 8/13/08
City Attorney Approval:
Carol Schwab (by H. Baker) (09/03/08)
Chief Financial Officer Approval:
Jeff Muir (09/03/08)
City Manager Approval:
Jerry B. Fulwood (09/03/08) City of Culver City, California
City Council Agenda Item Report
pricing. In 2008 Riverside County negotiated with Microsoft to extend this program
for five more years with the option to enroll for either three or five years. The pricing
is available to every municipality in California. The Riverside Agreement designates
Dell as a Large Account Reseller for Microsoft. The City used Dell, Inc. for the
previous agreement and will renew using Dell.
This Agreement simplifies licensing and record keeping compliance for the City.
Culver City declares the number of desktop computers and submits the number of
server licenses desired to be on the program as they are purchased. Each year a
payment is made for the licensing. In exchange Microsoft provides the City with the
current version of every declared product. In addition the City becomes eligible for
training credits and certain kinds of support assistance each year.
DISCUSSION:
Staff recommends the Agreement be executed for a five year term. The existing
Enterprise Agreement has been very beneficial to the City over the last five years.
During its term the City has benefitted from two major update releases of all the
covered products. The City also benefits from preferential pricing on new purchases
for City use, an employee purchase program, training credits for IT staff, and access
to support services.
One stop licensing through Dell’s reporting to Microsoft has simplified licensing
compliance checks, and ensures that Culver City will be able to pass compliance
audits. Additional purchases by the City during the life of the agreement are at
preferential pricing and added to the agreement’s annual coverage.
Annual budgeting for the license payment has enabled IT to estimate costs over
multiple years and removed large lump sum capital budget requests when a major
update is released during a particular year.
FISCAL ANALYSIS:
Riverside County’s negotiations include the buying power of counties and
municipalities within California. As a result, Microsoft extends to Culver City a level
of discount for which it could not normally qualify. The proposed Agreement has
negotiated larger price reductions than the expiring agreement. The following table
includes a comparison of pricing from the previous agreement with that included in
the proposed Agreement:
City of Culver City, California
City Council Agenda Item Report
Agreement Desktops Cost/Desktop Total (+ tax*)
Expiring Agreement 475 $173.04 + tax $82,194.00
New Enrollment 475 $133.04+ tax $63,194.00
Annual Reduction $40.00 + tax* $19,000.00
(*) The tax rate in Los Angeles County may change due to State and Voter driven efforts during the life of this agreement.
Server and Client Access License prices have also decreased. Including the
additional licenses purchased by the City in the last year the total annual cost has
dropped.
Agreement Total (+ Tax)
Expiring Agreement (+tax) Last Annual payment $93,257.98
New Enrollment (+ tax*) Annual total payment $91,191.35
Annual Reduction (+ tax*) $2,066.63
(*) The tax rate in Los Angeles County may change due to State and Voter driven efforts during the life of this agreement.
Funds for Fiscal Year 2008/2009 were included in the Adopted Budget. For future
years, the IT Department will request funds in the as part of the Maintenance fund
10124100.600220 each year for the duration of the contract. Attachment 1 details
the covered items and prices.
Section 3.07.065 provides for an exemption from formal competitive bidding in four
circumstances. As mentioned below:
The City Council may waive the formal competitive bidding procedures of this
Subchapter for the purchase of supplies or equipment which:
A. Can be obtained from only one (1) vendor;
B. Can be purchased through a cooperative purchasing agreement which has been
competitively bid, or through agreements executed with other governmental agencies;
C. Can be purchased by the City from a vendor, who within the past twelve (12)
months, has offered such equipment on the same terms and conditions to the City or
another public agency through the competitive bidding process; provided, that the
benefits of such terms and conditions are verified by informal bid confirmation; or
D. Is a component for equipment or a system of equipment previously acquired by
the City, and is necessary to repair, maintain or improve the City's utilization of the
equipment City of Culver City, California
City Council Agenda Item Report
Because Microsoft Enterprise Agreements are available from a very limited number
of sources and based upon the Riverside County Enterprise Agreement,
Subsections A, B, and D apply.
ATTACHMENTS:
1. Microsoft Enterprise price quote supplied by Dell, Inc.
MOTION:
That the City Council:
1) Pursuant to Section 3.07.065 of the Culver City Municipal Code, waive the formal
bidding procedures; and,
2) Approve an Enterprise Agreement in an amount not to exceed $91,191.35 + tax
with Microsoft Corporation with Dell, Inc. as the Large Account Reseller.
3) Authorize the City Attorney to review/prepare the necessary documents; and,
4) Authorize the City Manager to execute such documents on behalf of the City.
5) Authorize the Chief Information Officer to add PC or Server licensing acquired by
the City at the contract established rates during the annual renewals.