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Date
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August 6, 2007
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Agenda
Item No. 41 Roll
Call No. 07- Communication No. 07-475
Submitted by: Mike Matthes, |
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AGENDA
HEADING:
Approving the hardware
buyout option of the Seat Management Contract with Public Technology Institute,
Inc. and L-3 Communications Government Services, Inc.
SYNOPSIS:
Recommend approval to exercise the hardware buyout
option of the City’s Seat Management Contract with L-3 Government Service, Inc.
(
FISCAL
IMPACT:
Amount: The
full funding required to exercise the buyout option and close out the contract
is $214,460. This is a reduced buyout
price from the terms of the agreement that staff negotiated because of
under-performance in some areas of the contract, specifically asset management.
Despite this initial one-time cost, staff anticipates annual savings of
$188,500 from closing the contract.
Funding
Source: Funding for the buyout option is available in
the Fiscal Year 2007-08 Operating Budget, Information Technology Department,
Network and Operations, GE001 IFT010100, page 197.
ADDITIONAL
INFORMATION:
The City of
The contract
renewal expired on July 17, 2007. Through
a buyout option in the contract, the City has the opportunity to acquire the
current desktop and laptop equipment. Currently
229 desktop configurations are still on lease and 584 desktop configurations
have fully paid leases, but they remain under the seat management services
component of the agreement.
Staff has
determined that considerable cost savings can be achieved in two ways by
exercising the buyout option in the contract:
- Purchase
Future Equipment at a Reduced Cost through a WSCA Contract: Rather than lease equipment, in the
future the city will acquire all hardware for refresh and deployment from the
State of Iowa HP Western States Contract Alliance (WSCA) - contract number
A63309. Through the current seat management contract, the city pays $1168.20
in lease costs for a standard desktop configuration. The same configuration is available
through the WSCA contract for $956. This results in a savings of $212.20
each for all future desktop configurations.
- Perform
Desktop Configuration In-house:
The City is contractually obligated to pay L-3 Communications a monthly fee
of $32.45 per desktop configuration currently on lease and $19.33 per
desktop configuration for seat management services under lease or out of
warranty. Staff does not believe the city is receiving that level of value
for this service. Although L-3 is onsite to perform the configurations,
city staff must also participate in this process, creating a duplication
of efforts. Staff capacity is available in the short-term to absorb the
workload of services currently being performed by L-3. Therefore, if the
city acquires the equipment through buyout, the monthly costs will be
eliminated, resulting in a monthly savings of $15,715, or annual savings
of $188,580. Future seat management
services will be provided, as needed, by the City’s Information Technology
(IT) Department.
In
addition to the cost savings, there are other advantages to buying out the
contract. First, by owning the hardware, the IT Department will be able to
perform necessary upgrades to equipment. The city has approximately 600
computers that still use the Windows 2000 operating system. Because these are
leased machines, we do not have the ability to perform necessary upgrades. At
the end of this year, Microsoft will stop supporting Windows 2000. Unless
upgrades are performed, the city could be exposed to security vulnerabilities
through software that is no longer supported.
Another
advantage is that the city can better perform asset management. Although asset
management was included in the seat management contract, this is a function
that was never performed as the city had anticipated. Ideally all city
computers were to be upgraded on a three-year cycle, but many city machines
have exceeded that lifespan. The IT Department is currently performing its own
asset inventory to determine future upgrades. The software and staff are
already in place for this effort. By bringing the asset management function
in-house, we will have greater flexibility in managing our hardware and
software needs. The goal will be to hold down costs by extending the life of
machines and strategically allocating the hardware.
Though the IT
Department is able to absorb the immediate workload associated with bringing
this function in-house, over the long-term additional resources may be
required. Once the asset inventory is completed, further analysis will be
necessary to determine the appropriate scheduling for future upgrades and new
deployments. This analysis will include examining options to find the most
cost-effective method for completing the work, such as by adding additional
staff on a full- or part-time basis or contracting for service. In any event,
staff feels confident that the cost savings generated through this action to
buyout the contract will be more than sufficient to cover any additional
resource needs that are identified.
PREVIOUS
COUNCIL ACTION(S):
Date: November
21, 2005
Roll Call
Number: 05-2799
Action: Amendment and renewal of Seat Management
Contract with Public Technology, Inc. and L-3 Government Services to provide
technology services. (Council
Communication No. 05-671) Moved by Hensley to approve. Motion Carried 7-0.
Date:
September 27, 2005
Roll Call
Number: 04-2057
Action: Addendum to Seat Management Contract with
Public Technology, Inc. and EER Systems, Inc. to reflect name change of EER
Systems, Inc. to L-3 Communications Government Services, Inc. Moved by Hensley to approve.
Motion Carried 7-0.
Date:
July 8, 2002
Roll Call
Number: 02-1707
Action: Contract with Public Technologies/EER Systems
for Seat Management pilot program. (Council
Communication No. 02-374). Moved by Coleman to adopt. Motion Carried 7-0.
BOARD/COMMISSION
ACTION(S): NONE
ANTICIPATED
ACTIONS AND FUTURE COMMITMENTS: NONE