Item No. 7.
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: OFFICE OF THE CITY MANAGER
BY: VANIAH DE ROJAS, ASSISTANT CITY MANAGER
DATE: OCTOBER 14, 2025
SUBJECT: RATIFICATION OF MICROSOFT 365 GOVERNMENT COMMUNITY CLOUD (GCC) G3 LICENSING AGREEMENT WITH CRAYON FOR SOFTWARE
LICENSING AND ONLINE SERVICES
EXECUTIVE SUMMARY
The City Council will consider ratifying the City Manager’s preapproval of a Microsoft 365 Government Community Cloud (GCC) G3 licensing agreement with Crayon for software licensing and online services. Crayon specializes in government pricing models for Microsoft products, ensuring cost-effective procurement while meeting compliance requirements. Transitioning to Microsoft 365 Government Community Cloud (GCC) G3 licensing provides various benefits to the City including; full desktop Office apps, essential productivity and collaboration tools (like Exchange Online, SharePoint Online, and Teams), enhanced security and compliance features, and unlimited cloud storage.
RECOMMENDATION
That the City Council:
Ratify the City Manager's execution of a Microsoft 365 Government Community Cloud (GCC) G3 licensing Agreement with Crayon for software licensing and online services for a three-year term beginning October 1, 2025 for a total contract amount of $204,065.
BACKGROUND
The City migrated from an on-premise email system to the Microsoft Government Cloud service in October 2022. As part of the project implementation, the City enrolled in a Microsoft Enterprise Agreement with SoftwareOne. Microsoft Enterprise Agreements offer organizations with 500 or more users or devices with a manageable volume licensing program. It gives organizations the flexibility to buy cloud services and software licenses under one agreement. The Enterprise Agreement also includes a subscription option that lowers initial licensing costs because it gives subscribers the rights to use Microsoft products and services instead of owning them. The subscription option also enables the City to increase or decrease subscription counts on an annual basis (also known as:
Trueup), which may affect the total contract amount.
The Microsoft Enterprise Agreement was structured in a three-year term, at the end of the three-year term, the City has the option to enter into a new agreement for another three years. On July 26, 2022 an agenda memo was taken to Council and City staff was given authorization to enter into year one of the Agreement. In November 2023, the City entered into an agreement for the remaining two years of the term.
No RFP was needed to select SoftwareOne as the distributor of Microsoft Enterprise licensing because SoftwareOne holds the Riverside County Master Agreement contract and the City is able to piggy back off this contract.
ANALYSIS
After a through analysis by the City Manager's Office along and the I.T. Division, staff determined that it is essential for the City to transition from a basic Microsoft Government Cloud (Email Exchange-only) licensing to Microsoft 365 Government Community Cloud (GCC) G3 licensing, a significant upgrade that enhances security, compliance, and productivity. This move also introduces a suite of advanced tools tailored for government environments, including Microsoft Teams for secure collaboration, SharePoint and OneDrive for cloud storage, and Office desktop apps like Word, Excel, and PowerPoint. Additionally, the GCC platform ensures security compliance with federal and state regulations such as FedRAMP and Criminal Justice Information (CJIS), making it ideal for municipal operations.
Further, features like advanced threat protection, data loss prevention, and endpoint management through Intune will strengthen cybersecurity while enabling remote work capabilities. Employees will benefit from Windows 11 Enterprise, enhanced email security via Exchange Plan 2, and integrated productivity cloud apps, all designed to streamline workflows and improve service delivery to its users.
To facilitate this upgrade, the City of Downey is partnering with the company Crayon as its licensing vendor. Crayon specializes in government pricing models for Microsoft products, ensuring cost-effective procurement while meeting compliance requirements. This strategic choice follows Crayon’s acquisition of SoftwareOne, the City’s previous vendor, consolidating expertise and resources under one provider.
The current Microsoft Enterprise Agreement with SoftwareOne ended on September 15, 2025. In order to maintain the continuity of operations and take advantage of immediately available competitive pricing, the City Manager authorized the execution of a new agreement with Crayon on October 9, 2025.
CITY COUNCIL PRIORITIES
Fiscal Responsibility
Efficiency and
Adaptability
FISCAL IMPACT
Approval of the recommended action will result in an expenditure of $204,065 from the General Fund, IT Division, Account No. 10-4-1380-0144 as previously approved in the FY 2025-2026 operating budget.
ATTACHMENTS
Attachment A - Crayon Qoute.pdf