City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Administrative Services
Meeting Date: June 2, 2025
Report #:2503-4397
TITLE
Approval of Contract Amendment Number 4 to Contract Number C16166822 with ARC Document Solutions in the Amount of $1,020,000, Bringing the New Total Not To Exceed to $3,855,340, for Copiers/Printers to increase; CEQA Status - Not a Project
RECOMMENDATION
Staff recommends the City Council approve and authorize the City Manager or their designee to execute Amendment No. 4 to Contract No. C1616822 (Attachment A) with ARC Document Solutions (ARC) to extend the term of the contract for three additional years from July 1, 2025, to June 30, 2028 and increase the not-to-exceed amount by $1,020,000 for managed print services. This amendment results in a revised total contract total not-to-exceed of $3,855,340.
BACKGROUND
The City of Palo Alto uses multifunctional copier, printer, fax and scanner machines and related maintenance services citywide provided by ARC in a five-year contract established in 20161, with a not to exceed value of $1.7 million over the five-year term. The contract was amended in 2022 for an additional three-year term2 and included the addition of utility bill printers. This contract was originally entered into in place of an expired Toshiba copier lease agreement. The ARC contract implemented new multifunctional machines under a managed print services model providing standard copy and scanning functions and link via the cloud to the ARC document storage platform. The new machines replaced the City’s prior fleet of standard office copiers. Staff evaluated options from several service providers through cooperative pricing arrangements and determined that ARC offered the best combination of price and features. 1City Council, November 14, 2026, Managed Print Services Contract with ARC; http://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=54544 2City Council, November 14, 2022: Approval of Contract Amendment Number 3 to Contract Number C16166822 with ARC Document Solutions for Copiers/Printers to Extend the Term of the Contract for Three Additional Years and to Decrease the Annual Amount by $102,068 to $306,000 Per Year and a Total Contract Not to Exceed amount of $2,835,340; https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=9108&compileOutputType=1
Offerings from ARC, Cannon, EIS-Xerox, Toshiba, Ricoh, Sharp and CT Konica, and KBA-Kyocera were reviewed during this process.
Currently the City of Palo Alto prints its own utility bills for all utility customers, approximately 350,000 paper bills annually. This function will be outsourced in FY 2026 (outsourcing scheduled to be in place in September 2025)3. This contract has been adjusted to take into account the outsourcing of utility bill printing.
ANALYSIS
The City has an existing contract and seeks an exemption by PAMC 2.30.360(b) from solicitation to process Amendment 4 to contract C1616822 for an additional 3 years. This amendment will extend the contract term to June 30, 2028, and increase compensation for an additional $1,020,000 to a total not to exceed $3,855,340. Staff has reviewed pricing received by ARC compared to cooperative pricing and ARC comes in lower because ARC is not charging Palo Alto a leasing fee.
The IT Department expects to review copier technology options during this contract period to determine the path forward for the networked copier-printer system as this contract concludes. This review may include choosing different technology, which would require time for migrating from the incumbent system and possibly running parallel processes to facilitate a smooth transition. In the meantime, continuing this contract with competitive pricing will ensure that copier services continue to be available to satisfy copying needs in the City. This Amendment includes the option for the IT department to add additional printers such as stand- alone desktop printers, if necessary. Staff is currently evaluating the usage of these stand-alone printers to determine if adding them to this maintenance contract is cost advantage over the ad-hoc services that are currently being performed. The goal is to capture these costs to evaluate the need for these stand-alone printers.
FISCAL/RESOURCE IMPACT
The annual not-to-exceed amount increased from $306,000 per year to $340,000 per year, an 11% increase, for a new contract total not-to exceed amount of $3,855,340. The increase is related to an increase in printing volume due to staff demands, which is estimated at $54,000.
The increase is partially offset by a decrease in cost for the removal of the utility bill printers, which is estimated at $20,000. Volume has increased due to staffing on site post COVID utilizing the equipment. The increase in annual cost will be allocated to City departments based on recent historical experience. The actual cost will vary depending on printing quantity and color versus black and white. Funding for this contract is in the proposed FY 2026 Print and Mail Fund Budget and costs are allocated to departments based on usage.
3 City Council, April 14, 2025, Professional Services Contract with InfoSend; https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=7707&meetingTemplateType=2&compiledMeetingDocumentId=13 889
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by the California Environmental Quality Act (CEQA) because the contract for printing and copier services is a continuing administrative or maintenance activity. CEQA Guidelines section 15378(b)(2).
ATTACHMENTS
Attachment A: ARC Document Solutions, C16166822 Amendment No. 4 APPROVED BY:
Lauren Lai, Administrative Services Director