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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: IT Department
Meeting Date: March 3, 2025
Report #:2501-4024
TITLE
Approval of Contract Amendment Number 3 to Contract Number S17167826 with NEOGOV, in the Amount of $87,700 to Extend Onboarding Recruitment Software as a Service Subscription for an Additional Year for a Revised Total not-to-exceed Amount of $499,022 Over 9 Years.
CEQA Status - exempt.
RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or designee to execute Amendment No. 3 to Contract No. S17167826 with NEOGOV (Attachment A) to extend onboarding recruitment software as a service subscription in an amount not to exceed for $87,700 for an additional year. This amendment results in a revised total not-to-exceed amount of $499,022.
BACKGROUND
The City of Palo Alto Human Resources (HR) department currently utilizes NEOGOV, a cloud- based HR software platform, to manage recruitment, onboarding, and performance evaluations. The original Contract No. S17167826 was executed on April 9, 2017, with a sole source justification under Contract No. S14152589, for a total not-to-exceed (NTE) value of $87,964.26 over three years. Subsequent amendments were made to extend the contract and enhance its services:
•Amendment No. 1 (June 1, 2020): Extended the term to April 8, 2022, added onboarding and API services, and increased the NTE amount to $161,440. •Amendment No. 2 (April 9, 2022): Extended the contract to June 30, 2025, added new modules, and increased the NTE amount to $411,322.
The software's functionalities include job application tracking, onboarding, and reporting with data analytics. These features are critical to ensuring continuity in HR processes and supporting the City’s recruitment and retention objectives.
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ANALYSIS
To maintain uninterrupted HR operations, staff recommends extending the NEOGOV contract for an additional year. This extension will provide sufficient time to complete a comprehensive Request for Proposals (RFP) process to evaluate and transition to a new software solution, if needed. The RFP was posted on February 7, 2025, with the intent to award in May 2025 and present to Council in August 2025. If a new solution is selected, implementation will start in September 2025 and is anticipated to go live in March/April 2026.
The current contract expires on June 30, 2025, and the proposed Amendment No. 3 would extend the term to June 30, 2026. The additional year serves as a contingency to ensure a smooth and efficient transition, allowing the department to carefully implement a new system, if selected. By extending the contract, the City avoids potential costs and operational inefficiencies that could arise from prematurely transitioning to a new platform. This approach ensures HR processes remain fully functional and supports the City’s recruitment and onboarding needs during the transition period.
The extension aligns with Palo Alto Municipal Code (PAMC) Section 2.30.360(b), which permits exemptions to competitive solicitation when it provides fiscal, operational, or sourcing benefits.
In this case, the extension secures the continuity of critical HR functions while enabling a well- planned and cost-effective transition strategy.
FISCAL/RESOURCE IMPACT
Funding this purchase order in FY 2025 in the amount of $87,700 is within budgeted levels adopted by the City Council in the Information Technology Department, no additional funding is requested.
The Information Technology (IT) Department is funded by an Internal Service Fund (ISF) that allocates costs to other funds across the City to provide technology-related services to other City departments and funds. Approximately 45% of the services provided are for the General Fund with the remaining 55% for other funds such as enterprise, special revenue, and other internal service funds.
STAKEHOLDER ENGAGEMENT
The services were coordinated with internal stakeholders and the service provider.
ENVIRONMENTAL REVIEW
The approval of these contracts is exempt from review under the California Environmental Quality Act (CEQA) under CEQA Guidelines section 15061(c)(3) because it can be seen that there is no possibility that the activity in question may have a significant effect on the environment.
ATTACHMENTS
Attachment A: NEOGOV Contract S17167826, Amendment No. 3 APPROVED BY: Darren Numoto, Chief Information Officer