CA Review AZ
Meeting Date: Dec. 3, 2024
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: Maria Callander, Information Technology Director [email protected] or 442-339-2454
Chris Larson, Information Technology Security Manager
[email protected] or 442-339-2450
Subject: Adding Cybersecurity Products to the to the Third Year of the 2022 Microsoft Enterprise Agreement with CDW Government LLC
Recommend
ed Action
Adopt a resolution authorizing the City Manager or designee to execute any necessary documents to add additional cybersecurity products to the City of Carlsbad’s current Microsoft Enterprise Agreement with CDW Government LLC for an amount of $280,662.50 for a new not-to-exceed amount of $966,252.37 for the third year of the Agreement ending Dec. 31, 2025.
Executive Summary
Maintaining adequate cybersecurity is crucial to protect the city from threats and cyber extortion attempts. The City Council is being asked to approve the purchase of additional cybersecurity products under its contract for Microsoft products to better protect the city’s data and operations.
The city purchases its Microsoft products, which are used in all aspects of city operations, under an agreement from CDW Government LLC. The agreement covers software licensing, maintenance and support of the city's Microsoft product inventory. It was executed in 2022 with a 36-month term ending Dec. 31, 2025.
The agreement allows the city to buy additional items during the term. Staff are recommending the city purchase additional cybersecurity products for the third year of the agreement. This would increase the third-year payment to $966,252.37, which includes the original annual amount of $670,888.07, annual adjustment costs of $14,701.80 and $280,662.50 for the enhanced cybersecurity products.
Funding for this purchase is available in the Information Technology Department’s fiscal year 2024-25 operating budget and the Strategic Digital Transformation Investment Program. The City Council’s approval is required under Carlsbad Municipal Code Section 3.28.060 - Procurement of Professional Services and Services because the additional purchase will cost the city more than $100,000 per agreement year.
Dec. 3, 2024
Item #7 Page 1 of 9
With this purchase, staff will consolidate and replace existing security tools that are no longer needed or effective. The cost savings generated by phasing out these tools will fully offset the expense of the new Microsoft security projects in future fiscal years.
Explanation & Analysis
Microsoft software products are used by over 1,400 city staff, volunteers and contractors and are installed on over 1,500 computers and servers, including those used by library patrons. The products include desktop, laptop and server operating systems, database systems and the cloud-based office productivity tool known as Microsoft 365. All of these products are potentially vulnerable to continually evolving cybersecurity threats and need to be made as secure as possible.
The city purchases these Microsoft products under a three-year volume purchasing agreement with CDW-G. The current agreement, approved by the City Council on Dec. 13, 2022, expires on Dec. 31, 2025. The agreement allows for the ability to upgrade some product licenses to higher tiers that include additional features, a process known as a step-up.
CDW-G was selected as the vendor of choice in 2022 based on their experience and capability to add value to purchases and are qualified for bidding under the Microsoft Enterprise Agreement. The purchase of cybersecurity products under this agreement from CDW-G represents the best value to the city by purchasing through a cooperative purchasing agreement, in compliance with Carlsbad Municipal Code, Chapter 3.28.100 - Cooperative Purchasing. CDW-G is an authorized Enterprise Agreement reseller and provides products and technology services under the County of Riverside’s Cooperative Purchasing Enterprise Agreement No. 8084445 (PSA - 0001522).
The current agreement allows the city to add new products within the scope of the agreement without additional bidding, contract amendments or new agreements. Making this additional purchase under the current Microsoft agreement with CDW-G leverages the pricing levels already agreed upon in the existing agreement.
Staff recommend the city purchase additional features to protect against the ongoing risk of a cyberattack to digital systems, which would significantly impact city operations if taken offline.
These features will improve threat detection, protect sensitive data and defend against phishing and malware to keep city systems secure and operational.
Fiscal Analysis
Cost of cybersecurity purchase
With this additional step-up purchase cost of $280,662.50, as well as for increased use of Microsoft products beyond what is included the original agreement added during the year, known as the true-up costs, the new third-year cost of the Microsoft EA with CDW-G is not to exceed $966,252.37.
Funding for the revised third year is in the fiscal year 2024-25 Information Technology Department’s Operating Budget and the Strategic Digital Transformation Investment Program.
Due to the addition of the Microsoft cybersecurity products, the Strategic Digital Transformation Investment Program – Cyber Security Program Development Project budget will be used as a one-time disbursement in fiscal year 2024-25. The IT Operating Budget already included the annual costs for the third year of the agreement.
Dec. 3, 2024
Item #7 Page 2 of 9
As noted above, as the IT Department will phase out current but no longer needed security products in fiscal year 2024-25 and fiscal year 2025-26 the budgets allocated to these products will be reallocated to cover the increased expenses of a new Microsoft enterprise agreement that will begin in January 2026.
Total Microsoft enterprise agreement costs
The total adjusted not-to-exceed amount for the three years of the 2022 Microsoft enterprise agreement is $2,321,015.51, which includes the original cost, the true-up costs and the cost of the recommended cybersecurity products to be purchased.
Microsoft enterprise agreement with CDW-G
Description Original costs True-up costs New cybersecurity products
Year 1 $670,888.07
Year 2 $670,888.07 $12,987.00
Year 3 $670,888.07 $14,701.80 $280,662.50
Totals $2,012,664.21 $27,688.80 $280,662.50
TOTAL AGREEMENT COST: $2,321,015.51
Next Steps
With the City Council’s approval, staff will execute the necessary purchases and immediately begin rolling out several of the new features, with some to be completely implemented before the end of March 2025.
Environmental Eval uation
This action does not require environmental review because it does not constitute a project within the meaning of the California Environmental Quality Act under California Public Resources Code Section 21065 in that it has no potential to cause either a direct physical change or a reasonably foreseeable indirect physical change in the environment.
Exhibits
1. City Council resolution
Microsoft enterprise agreement third-year funding
Information Technology Department’s operating budget $748,752.37 Strategic Digital Transformation Investment Program $217,500.00 Total available balance $966,252.37
Additional appropriation needed $0
Dec. 3, 2024
Item #7 Page 3 of 9
Exhibit 1
Dec. 3, 2024
Item #7 Page 4 of 9
RESOLUTION NO. 2024-268
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, AUTHORIZING THE CITY MANAGER OR DESIGN EE TO EXECUTE
ANY NECESSARY DOCUMENTS TO ADD ADDITIONAL CYBERSECURITY
PRODUCTS TO THE CITY OF CARLSBAD'S CURRENT MICROSOFT ENTERPRISE
AGREEMENT WITH CDW GOVERNMENT LLC FOR AN AMOUNT OF
$280,662.50 FOR A NEW NOT-TO-EXCEED AMOUNT OF $966,252.37 FOR THE THIRD YEAR OF THE AGREEMENT ENDING DEC. 31, 2025
WHEREAS, the City of Carlsbad (City) uses a number of Microsoft software products and hosted services and has determined that the most cost-effective way to purchase those products and services is under Microsoft's Enterprise Agreement Program; and
WHEREAS, CDW Government LLC (CDW-G LLC), an authorized Microsoft reseller, provides products and technology services using Microsoft's Enterprise Agreement Program; and WHEREAS, under Carlsbad Municipal Code 3.28.100 - Cooperative Purchasing, the Purchasing Officer has the authority to join with other public agencies for the purchase of goods or services when it is in the best interest of the City; and
WHEREAS, CDW-G LLC offers competitive pricing through the County of Riverside's Cooperative Purchasing Enterprise Agreement No. 8084445 (PSA- 0001522); and WHEREAS, the Purchasing Officer reviewed the County of Riverside's Cooperative Purchasing Enterprise Agreement with CDW-G LLC and agreed cooperative purchasing was in the best interest of the City; and
WHEREAS, on Dec. 13, 2022, the City Council approved a three-year agreement with CDW-G LLC ending on Dec. 31, 2025, to purchase Microsoft products, maintenance and hosted services under Microsoft's Enterprise Agreement using cooperative purchasing (Agreement) as reflected in Resolution No. 2022-283; and
WHEREAS, the Agreement approval also included the annual true-up payments as applicable for changes to the software purchases during the term of the Agreement; and WHEREAS, the City wants to add additional cybersecurity products in the amount of $280,662.50 to the third year of the Agreement; and
WHEREAS, the budget to procure the additional cybersecurity products is available in the fiscal year 2024-25 Information Technology Department's Operating and Strategic Digital Transformation Investment Program Budgets.
Dec. 3, 2024
Item #7 Page 5 of 9
follows:
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
1. That the above recitations are true and correct.
2. That the addition of a step-up payment for cybersecurity products to the Agreement with CDW-G LLC is approved, and the City Manager, or his designee, is authorized to execute all required documents on behalf of City.
3. That the purchase of the step-up for cybersecurity products for Microsoft Software from CDW-G LLC shall not exceed $280,662.50 and the annual true-up payment shall not exceed $14,701.80, for a new not to exceed amount of $966,252.37 for the third year of the Agreement, Attachment A.
4. That the new Agreement total for the entire three-year term, including this step up payment for cybersecurity products and the annual true-up payment, is $2,321,015.51.
5. That funding for the third Agreement year payment is in the fiscal year 2024-25 Information Technology Department's Operating and the Strategic Digital Transformation Investment Program Budgets.
PASSED, APPROVED AND ADOPTED at a Regular Meeting ofthe City Council of the City of Carlsbad on the 3rd day of December, 2024, by the following vote, to wit:
AYES:
NAYS:
ABSTAIN:
ABSENT:
BLACKBURN, BHAT-PATEL, ACOSTA, BURKHOLDER, LUNA.
NONE.
NONE.
NONE.
u0 -tr
SHERRY FREISINGER, City Clerk
(SEAL)
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QUOTE CONFIRMATION
MICHAEL PUGLIESE,
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QUOTE # QUOTE DATE QUOTE REFERENCE CUSTOMER # GRAND TOTAL PDMC224 10/24/2024 MS EA 6387665 $966,252.37
QUOTE DETAILS
ITEM QTY CDW# UNIT PRICE EXT. PRICE
Microsoft M365 G5 GCC Step-Up License M365 G3 Per User 1250 6668133 $224.53 $280,662.50 Mfg. Part#: AAL-45737-12-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
Microsoft Office Professional Plus - software assurance - 1 PC 200 2084640 $109.71 $21,942.00
Mfg. Part#: 269-05704-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
Windows Enterprise - software assurance - 1 license
200 3878003 $48.72 $9,744.00
Mfg. Part#: KV3-00368-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
Microsoft Visual Studio Enterprise with MSDN - software assurance - 1 user
2 3891396 $1,072.12 $2,144.24
Mfg. Part#: MX3-00117-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
Microsoft SQL Server - software assurance - 1 CAL
100 2186887 $34.14 $3,414.00
Mfg. Part#: 359-00792-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
Microsoft SQL Server Enterprise Core Edition - software assurance - 2 cores
16 2747931 $2,247.99 $35,967.84
Mfg. Part#: 7JQ-00343-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
Attachment A
Thank you for choosing CDW. We have received your quote.
Dec. 3, 2024
Item #7 Page 6 of 9
co~y. _________ _
QUOTE DETAILS (CONT.)
Microsoft SQL Server Standard Edition - software assurance - 1 server
14 2106689 $146.77 $2,054.78
Mfg. Part#: 228-04433-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
Microsoft SQL Server Standard Core Edition - software
assurance - 2 cores
36 2716749 $586.24 $21,104.64
Mfg. Part#: 7NQ-00292-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
Microsoft System Center Datacenter Edition - license &
software assurance -
194 4503400 $114.62 $22,236.28
Mfg. Part#: 9EP-00037-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
Microsoft System Center Datacenter Edition - license &
software assurance -
30 4503400 $49.09 $1,472.70
Mfg. Part#: 9EP-00037-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
Microsoft Windows Remote Desktop Services - software
assurance - 1 user CAL
100 2288626 $23.69 $2,369.00
Mfg. Part#: 6VC-01254-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
MS EES WIN SVR DCCORE L SA
60 4341905 $293.75 $17,625.00
Mfg. Part#: 9EA-00039-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
MS EA WIN SVR DCCORE SA MVL
164 4354663 $125.87 $20,642.68
Mfg. Part#: 9EA-00278-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
Microsoft Windows Server - External Connector License & Software Assurance
13 2502771 $770.27 $10,013.51
Mfg. Part#: R39-00374-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
Microsoft Windows Server - External Connector Software
Assurance - unlimite
5 2415170 $330.12 $1,650.60
Mfg. Part#: R39-00396-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
MS EA WIN SVR STDCORE SA MVL
240 4354666 $19.32 $4,636.80
Mfg. Part#: 9EM-00270-SLG
Dec. 3, 2024
Item #7 Page 7 of 9
QUOTE DETAILS (CONT.)
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
Microsoft M365 G3 Unified FUSL GCC Subscription License Per User
1250 5489074 $376.29 $470,362.50
Mfg. Part#: AAD-34704-12-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
MS EA VISIO P2 GCC FROM SA P USER
50 4350093 $115.91 $5,795.50
Mfg. Part#: 9K4-00003-12-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
Microsoft Azure - subscription license (1 month) - 1 license 1 3669730 $1,215.00 $1,215.00
Mfg. Part#: J5U-00001-12-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
Microsoft Intune Device - subscription license - 1 device 25 5529842 $20.05 $501.25
Mfg. Part#: NMH-00001-12-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
Microsoft 365 F1 - subscription license - 1 user
150 6317721 $23.33 $3,499.50
Mfg. Part#: 3EB-00001-12-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
MS EA PROJECT P5 GCC P USER
25 4579875 $499.85 $12,496.25
Mfg. Part#: 7VX-00001-12-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
Microsoft Audio Conferencing Select Dial Out - subscription license - 1 lic
1400 6976615 $0.00 $0.00
Mfg. Part#: NYH-00001-12-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
Microsoft M365 F3 Unified GCC Subscription License Per User 50 5759147 $82.98 $4,149.00
Mfg. Part#: AAD-63092-12-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
MS EA M365 F3 GCC SU
150 6837124 $59.66 $8,949.00
Mfg. Part#: AAH-52837-12-SLG
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
MS EA POWER ATMT PER USR W RPA GCC
10 6240545 $160.38 $1,603.80
Mfg. Part#: 105-00001-12-SLG
Dec. 3, 2024
Item #7 Page 8 of 9
QUOTE DETAILS (CONT.)
Electronic distribution - NO MEDIA
Contract: County of Riverside - Agreement No. 8084445
(PSA-0001522)
SUBTOTAL $966,252.37
SHIPPING $0.00
SALES TAX $0.00
GRAND TOTAL $966,252.37
PURCHASER BILLING INFO DELIVER TO
Billing Address:
CITY OF CARLSBAD
ACCOUNTS PAYABL
1635 FARADAY AVE
CARLSBAD, CA 92008-7314
Phone: (442) 602-2400
Payment Terms: Net 30 Days-Govt State/Local
Shipping Address:
CITY OF CARLSBAD
MICHAEL PUGLIESE
1635 FARADAY AVE
CARLSBAD, CA 92008-7314
Phone: (442) 602-2400
Shipping Method: ELECTRONIC DISTRIBUTION
Please remit payments to:
CDW Government
75 Remittance Drive
Suite 1515
Chicago, IL 60675-1515
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Item #7 Page 9 of 9
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