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CC - CONSENT ITEM: (1) Authorization to Enter into a Microsoft Enterprise Agreement through SHI International Corp., or any Approved Large Account Reseller (LAR), Utilizing the County of Riverside Cooperative Purchasing Agreement, for a Term Not-to-Exceed Three Years in the Amount of $439,994 Per Year; and (2) Authorization to the City Manager to Approve Amendments for Additional Licensing and Unanticipated Costs in an Additional Amount Not-to-Exceed Ten Percent (10%) Annually.
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Meeting Date: October 26, 2026
Contact Person/Dept: Johnnie Griffing / IT Department
Phone Number: (310) 253-5976
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Attachments: Yes [] No [X]
Public Notification: (E-Mail) Meetings and Agendas - City Council (10/22/2026)
Department Approval: Johnnie Griffing, Acting Chief Information Officer (10/15/2026)
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RECOMMENDATION
Staff recommends the City Council (1) authorize entering into a Microsoft Enterprise Agreement through SHI International Corp., or any approved Large Account Reseller (LAR) utilizing the County of Riverside cooperative purchasing agreement, in the amount of $439,994 per year for a total expenditure of $1,319,982 over the three year term; and (2) authorize the City Manager to execute necessary agreements, approve amendments, and additional purchases for unanticipated costs in an additional amount not-to-exceed 10% annually.
BACKGROUND
The City relies extensively on Microsoft technologies and services to support daily operations across all City Departments. Microsoft products provide the foundation for the City’s email and collaboration systems, office productivity applications, identity and access management, endpoint and cybersecurity protection, device management, cloud services, and server and database infrastructure.
Microsoft also supports numerous Department-specific applications used for financial management, permitting, public safety, transportation, public works, records management, and other City operations. Many of these applications rely upon Microsoft server operating systems, database technologies, identity services, and cloud infrastructure.
The City currently purchases Microsoft licensing through an Enterprise Agreement with CDW Government LLC (CDW) as the City’s licensing reseller. The current agreement expires October 31, 2026.
In preparation for the expiration of the existing agreement, the Information Technology Department conducted a comprehensive review of the City’s Microsoft licensing requirements including user licensing, cybersecurity and compliance capabilities, endpoint management, server and database licensing, and cloud services. The review was intended to align licensing with current operational requirements, strengthen the City’s cybersecurity capabilities, and avoid purchasing licenses or services that are not currently required.
DISCUSSION
Microsoft’s Enterprise Agreement provides the City with a consolidated mechanism for licensing products and cloud services that are integral to City operations. The agreement also provides standardized licensing terms and volume pricing and enables the City to adjust licensing as staffing, technology, and operational requirements change.
Since the City’s previous Enterprise Agreement was approved, the City’s technology environment and cybersecurity requirements have continued to evolve. Microsoft licensing now supports not only email and office productivity, but also identity and access management, endpoint security, device management, data protection, compliance, electronic discovery, cloud services, and enhanced cybersecurity capabilities.
As part of the renewal process, IT reviewed the City’s staff use and technology requirements rather than simply renewing existing license configurations. The proposed agreement utilizes a new approach with user licensing levels based upon employee and operational requirements including comprehensive Microsoft 365 licensing for users requiring the City’s full capabilities, more limited licensing for frontline workers, and email-focused licensing where broader capabilities are not required. This approach is intended to provide appropriate functionality and cybersecurity protections while controlling costs by avoiding higher-tier licensing for users whose job requirements do not warrant those capabilities.
IT also reviewed the City’s Microsoft server and database environment including Windows Server, SQL Server, and related licensing to better align with the City’s current infrastructure. The Enterprise Agreement will maintain the licensing necessary to support the City’s existing server and database environment while allowing IT to continue evaluating opportunities to simplify and optimize licensing as the environment evolves.
The agreement also supports the City’s ongoing cybersecurity program. Microsoft security capabilities available through the City’s licensing provide tools for endpoint protection, identity protection, device management, data security, compliance, and electronic discovery. These capabilities complement the City’s existing cybersecurity technologies and initiatives and may be implemented or expanded over the term of the agreement based on operational priorities and available resources.
As a part of the review, IT also evaluated anticipated Microsoft services. Where the City is not currently prepared to implement a service, the associated licensing has not been included in the proposed renewal. For example, licensing associated with a potential future migration of City telephony services to Microsoft Teams Phone was evaluated but is not included in the proposed agreement at this time. Should the City elect to pursue such a migration in the future, the required licensing would be evaluated as part of that project.
In addition to the fixed subscription and licensing costs included in the proposed Microsoft Enterprise Agreement, the City utilizes Microsoft cloud services that incur consumption-based charges, including Azure infrastructure and related security services. These costs vary based on actual utilization and are not included in the fixed licensing amounts quoted for the agreement. Consumption-based expenditures will be managed through the City’s established budgeting, purchasing, and financial oversight processes. The IT Department will monitor utilization and associated expenditures and evaluate opportunities for cost optimization. Any expenditures requiring additional appropriation or contracting authority will be brought forward for approval in accordance with City requirements.
The City’s existing Microsoft Enterprise Agreement is administered through CDW. For the proposed agreement, staff recommend utilizing SHI International Corp. as the City’s Microsoft Licensing Solution Provider. The change in reseller does not represent a migration away from Microsoft’s technology platforms or the City’s existing Microsoft cloud environment. Rather, SHI will serve as the facilitator for the City’s new Microsoft Enterprise Agreement. IT has been coordinating with Microsoft, SHI, and CDW to complete the expiration and renewal process and transition the City’s Microsoft licensing and related billing to the new agreement. Staff are also coordinating the transfer of applicable Microsoft Azure subscription billing to the new enrollment.
Pursuant to Culver City Municipal Code (CCMC) Section 3.07.055.E, formal competitive bidding procedures are not required where the items to be purchased are computer software, hardware maintenance services or software maintenance services. Additionally, per CCMC Section 3.07.055.G competitive bidding is not required where such process has already been utilized by another public agency and products and services are being supplied to the City at the same or better price, as was obtained through the competitive bid procedures of that entity.
The County of Riverside conducted a competitive procurement for Microsoft Licensing Solution Provider services and entered into an agreement with SHI International Corp. Staff proposes utilizing the County of Riverside cooperative purchasing agreement for the City’s Microsoft Enterprise Agreement. The County’s agreement with SHI, agreement number ITARC-00929, was awarded pursuant to RFQ number ITARC-532 and supports Microsoft Enterprise Agreement number 8084445.
Microsoft Enterprise Agreements are generally established on multi-year terms and the proposed 3-year term provides continuity of licensing and predictable pricing while allowing the City to periodically reassess its Microsoft technology and licensing strategy as products, cybersecurity requirements, staffing, and operational needs evolve.
FISCAL ANALYSIS
Sufficient funding for the first year cost of the proposed Microsoft Enterprise Agreement is included in the Adopted Budget for Fiscal Year 2026-2027 in Account #10124100.600200 (Information Technology - Repairs and Maintenance). Funding for future years will be included during the annual budget process to be approved by City Council each subsequent fiscal year.
The City incurs consumption-based charges for certain Microsoft Azure services supporting the City’s Madison AI initiatives, for which the City has previously utilized Azure prepayment credits through CDW, and Microsoft Sentinel security monitoring services for which the City established a separate $36,000 purchase order through the California Department of Technology. These consumption-based expenditures are not included in the fixed licensing costs of the proposed SHI agreement. The IT Department will coordinate the transition of applicable Azure services associated with the expiring agreement and continue managing consumption-based expenditures through the appropriate purchasing agreements, subject to available appropriations and applicable purchasing authority.
ATTACHMENTS
None.
recommended action
MOTION
That the City Council:
1. Approve a Microsoft Enterprise Agreement through SHI International Corp. or any approved Large Account Reseller utilizing the County of Riverside cooperative purchasing agreement, for a three-year term, with a base expenditure each year of $439,994 (electronic delivery of software is not expected to incur sales tax); and a three-year base amount not-to-exceed $1,319,982; and
2. Authorize the City Manager to approve amendments to the agreement in an additional amount of ten percent (10%) per year for the term of the agreement for unanticipated costs; and
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.