CITY OF MENIFEE
SUBJECT: Agreement with SHI International Corp. for Microsoft 365 Software Licenses
MEETING DATE: March 18, 2026
TO: Mayor and City Council
PREPARED BY: Ross Sublett, Management Analyst I
REVIEWED BY: Michelle Sarkissian, Chief Information Officer APPROVED BY: Armando G. Villa, City Manager
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RECOMMENDED ACTION
1. Authorize the Finance Department to issue individual purchase orders to SHI International Corp. on an as-needed basis, in a total aggregate amount not-to-exceed $1,347,984.96, for the purchase of Microsoft 365 software licenses pursuant to the California Department of Technology Cooperative Agreement, through March 31, 2031; and
2. Approve and authorize this purchase utilizing California Department of Technology Contract No. SC 25-0198737 pursuant to Menifee Municipal Code Section 3.12.210; and
3. Authorize the City Manager to execute all documents required for this purchase.
DISCUSSION
In 2021, the City entered into a five-year Microsoft Enterprise Agreement through the California Department of Technology’s (CDT) statewide licensing program, which is set to expire on March 31, 2026. The CDT has now completed a new competitive solicitation process and designated SHI International Corp. as the authorized reseller under the renewed statewide Enterprise Agreement.
The proposed recommended action would authorize the City to renew its Microsoft licensing through the State’s cooperative purchasing agreement. These licenses provide the Microsoft 365 tools City staff use daily, including email (Outlook), document creation and collaboration (Word, Excel, PowerPoint), cloud storage, and other related Microsoft services that support City operations.
City of Menifee Staff Report
Microsoft Enterprise Agreements
March 18, 2026
3 1
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Continuing under the State’s agreement allows the City to maintain its Microsoft platform while benefiting from State-negotiated pricing and procurement efficiencies, representing the most fiscally responsible option. Renewing the licenses through the CDT statewide agreement provides several benefits:
1.Cost Savings Through State Cooperative Purchasing
By participating in the statewide agreement, the City leverages the State’s collective purchasing power to obtain competitive pricing. Because the agreement has already been competitively solicited by the State, the City also avoids the time and administrative costs associated with conducting a separate Request for Proposals (RFP).
2.Budget Stability
The five-year structure provides cost stability and protects the City from unexpected price increases.
3.Security & Compliance
Maintains the secure government cloud environment designed to meet federal and state security standards.
4.Operational Reliability
Provides reliable services such as email, file storage, and collaboration tools used daily by City staff. Renewal avoids disruption to daily City operations.
5.Compatibility With Other Agencies
Microsoft products remain the recognized standard for government agencies nationwide, ensuring compatibility with county, state, and federal partners.
STRATEGIC PLAN OBJECTIVE
Regular City Business
FISCAL IMPACT
The fiscal impact of the proposed five-year agreement with the California Department of Technology is a not-to-exceed amount of $1,347,984.96.
Funding for the first year of the proposed agreement with California Department of Technology is available within the Fiscal Year 2026/27 budget, under Software/Subscriptions within the IT Fund (1110-ITD-651353). Funding for the subsequent fiscal years will be budgeted into each respective annual budget and are displayed in Table 1 on the following page.
No additional budget appropriation(s) would be required for this action.
City of Menifee Staff Report
Microsoft Enterprise Agreements
March 18, 2026
3 1
8 2
TABLE 1- PURCHASE ORDER BUDGET BREAKDOWN
Fiscal Year Proposed Budget Anticipated Account
FY 2026/2027 $265,278.72 1110-ITD-651353
FY 2027/2028 $265,278.72 1110-ITD-651353
FY 2028/2029 $272,475.84 1110-ITD-651353
FY 2029/2030 $272,475.84 1110-ITD-651353
FY 2030/2031 $272,475.84 1110-ITD-651353
TOTAL $1,347,984.96
ATTACHMENTS
1. SHI International Corp Quote
2. CDT Agreement with SHI International Corp