City of Culver City, California
Agenda Item Report
RECOMMENDATION:
Staff recommends the City Council approve a Renewed Enterprise License
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 Server Licenses in an amount
not-to-exceed $77,915.51.
BACKGROUND:
The City relies on Microsoft’s operating System, 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. Microsoft Office E-mail and Internet
software is used for communication, research, and to access software applications
on a daily basis.
The City also has purchased a wide range of department specific software for
handling financial transactions, timekeeping, 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 foundation to do their
work.
In 2003 the City entered into an Enterprise agreement modeled on the County of
Riverside’s Microsoft Enterprise Agreement. It was renewed in October of 2008 for
Meeting Date: 10/28/13 Item Number: C-7
CITY COUNCIL AGENDA ITEM: Approval of a Renewed Enterprise License
Agreement with the Microsoft Corporation (through Dell, Inc. LAR) for PC
Operating System, Office Professional Software, Client Access Licenses, and
Server Licenses in an Amount Not-to-Exceed $77,915.51.
Contact Person/Dept.: David Leuck Phone Number: (310) 253-5950
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Public Hearing: [] Action Item: [] Attachments: []
Commission Action Required: Yes [] No [X] Date: _______________
Public Notification: Meetings and Agendas – City Council (10/22/13), Erica Robinson,
Dell Inc. (10/15/13)
Department Approval:
Michele Williams (10/17/13)
City Attorney Approval:
Carol Schwab (by H. Baker) (10/21/13)
Chief Financial Officer Approval:
Jeff Muir (by M. Noller) (10/22/13)
City Manager Approval:
John M. Nachbar (10/22/13) City of Culver City, California
Agenda Item Report
an additional five year period which is expiring. This agreement bundles desktop
and server licensing into a single program with favorable pricing. Microsoft has
extended this program and is negotiating changes, options, new software to be
included, and pricing. The present agreement between Riverside and Microsoft
expires on 12/31/13 while Culver City’s current contract expires 10/31/13. The
bundle and 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 staff proposed to continue 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 support assistance each year.
DISCUSSION:
The Enterprise Agreement has been very beneficial to the City over the last five
years. During the contract term, the City has benefitted from at least two major
update releases of all 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 the Information Technology
(IT) Department to estimate costs over multiple years and eliminated large lump sum
capital budget requests when a major update is released during a particular year.
The IT Department will be investigating internet/cloud based services including e-
mail and productivity software which would typically be licensed under the Microsoft
Enterprise Agreement. The evaluation and decision to transition to a cloud-based
solution will not be complete prior to the expiration of the present agreement and will
in all likelihood continue through the end of this fiscal year.
Staff recommends renewing the Microsoft Enterprise Agreement for a term of one
year. Negotiations between Riverside and Microsoft are not yet complete and, at City of Culver City, California
Agenda Item Report
this time, the IT Department does not know what options and coverage the new
agreement will contain. Additionally, staff does not recommend committing to a
multi-year contract as the City’s technological direction for E-mail (cloud evaluation)
has not yet been determined.
Extending the contract for one year brings several benefits:
• The City maintains it current licenses and benefits for one more year at the
preferred volume rates. If the City allows coverage to lapse all new
purchases will be at non-preferred pricing schedules and each new version
rolled out will have to be purchased at then-current prices as a new
purchase.
• The City will know what changes, additions, and deletions of software will
result from the County of Riverside negotiations. If they add licensing
options for cloud based services that will also be evaluated.
• If the City determines to move E-mail and/or productivity applications to the
internet/cloud, the transition will be planned to coincide with the expiration of
the one year extension allowing a smooth transition with time to plan, test,
and prepare.
• If the IT Department does not recommend moving services to the cloud a
new three or five year agreement can be signed with Microsoft/Dell without a
lapse in coverage.
Pursuant to Culver City Municipal Code Section 3.07.045.E, computer software is
excepted from the competitive bid requirements.
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 the City alone would not normally qualify. The one year
extension is at price rates comparable to the expiring agreement. Comparing the
previous agreements with the new pricing:
Agreement Cost/Desktop/Year
Original (2003) Agreement $173.04 + tax*
Current (2008) Agreement $133.04 + tax*
One Year (2013) Agreement $138.88 + tax
* Past agreements have been non-taxable since software delivery is via Internet. It is expected that this will remain the same.
It should be noted that the reduction in pricing occurring with the 2008 agreement
resulted from reducing the number of covered desktops after an audit was City of Culver City, California
Agenda Item Report
performed. The proposed 2013 agreement covers 386 desktop computers at a price
of $53,607.68.
The server and database Client Access Licenses (CALs) are also covered by the
agreement. The annual count of server licenses changes slightly as Microsoft drops
some product lines, merges some product lines, or grants new licenses as their
licensing model evolves. The cost of server and database access licenses totals
$17,548.04. The total for the Enterprise Agreement is $71,155.72 (plus applicable
taxes) for one year.
Funding is appropriated in the Information Technology Repairs and Maintenance
budget - 10124100.600200 to cover the payment.
ATTACHMENTS:
None.
MOTION:
That the City Council:
1) Approve a Renewed Microsoft Enterprise Agreement for one year for an
expenditure not to exceed $77,915.51 (including tax) with Dell, Inc. as the Large
Account Reseller; and,
2) Authorize the City Attorney to review/prepare the necessary documents; and,
3) Authorize the City Manager to execute such documents on behalf of the City.