City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: IT Department
Meeting Date: June 17, 2025
Report #:2504-4543
TITLE
Approval of Professional Services Contracts for SAP Enterprise Resource System On-call Programming Services: Contract C26193272A with 360S2G, C26193272B with Sage Group Technologies Inc, C26193272C with Avertra Corp, C26193272D with Amick Brown LLC, C26193272E with 2iSolutions Inc, C26193272F with the Peloton Group, C26193272G with Phoenix Business Inc, C26193272H with EPI-USE America in an Amount Not-to-Exceed $2,000,000 in Fiscal Year 2026; CEQA status – Not a project.
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or their designee to execute eight separate five-year contracts for time-limited, on-call, as-needed, SAP project support services for a collective total not-to-exceed amount of $2,000,000 in Fiscal Year 2026 with:
1. 360S2G, Contract Number C26193272A 1;
2. Sage Group Technologies Inc, Contract Number C26193272B 2;
3. Avertra Corp, Contract Number C26193272C 3;
4. Amick Brown LLC, Contract Number C26193272D 4;
5. 2iSolutions Inc, Contract Number C26193272E 5;
6. The Peloton Group, Contract Number C26193272F 6;
1 360S2G SAP On-Call Contract No. C26193272A; https://www.paloalto.gov/files/assets/public/v/1/it- department/cmr-attachments/sap-on-call/amick-brown-c26193272d.pdf 2 Sage Technologies Group SAP On-Call Contract No. C26193272B; https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/sage-technologies- group-c26193272b.pdf
3 Avertra SAP On-Call Contract No. C26193272C; https://www.paloalto.gov/files/assets/public/v/1/it- department/cmr-attachments/sap-on-call/avertra-c26193272c.pdf 4 Amick Brown SAP On-Call Contract No. C26193272D; https://www.paloalto.gov/files/assets/public/v/1/it- department/cmr-attachments/sap-on-call-project-support-services/2025-contracts/amick-brown-c26193272d.pdf 5 2iSolutions SAP On-Call Contract No. C26193272E; https://www.paloalto.gov/files/assets/public/v/1/it- department/cmr-attachments/sap-on-call/2isolutions-c26193272e.pdf 6 Peloton Group SAP On-Call Contract No. C26193272F; https://www.paloalto.gov/files/assets/public/v/1/it- department/cmr-attachments/sap-on-call/peloton-group-c26193272f.pdf
7. Phoenix Business Inc, Contract Number C26193272G 7; and
8. EPI-USE America, Contract Number C26193272H 8.
Staff will return for City Council approval for services in Fiscal Year 2027 through Fiscal Year 2030 based on anticipated needs in the future.
EXECUTIVE SUMMARY
SAP is the City’s Enterprise Resource Planning (ERP) software platform for citywide financial and personnel management, and evolving business operations require a wide range of software programming projects. With the expiration of the City’s previous SAP on-call contracts awarded in 2019, staff issued a new Request for Proposals (RFP No. 193272) in early 2025 to identify multiple qualified vendors who can provide project-based, time-limited professional services on an as-needed basis. Following a competitive and structured evaluation process, eight firms are recommended for contract award based on qualifications, experience, past performance, and competitive pricing. These contracts will enable the City to meet evolving SAP requirements, upgrades and support needs over the next five years.
BACKGROUND
In 2019, the City’s Information Technology Department (ITD) issued RFP (CMR #113609) and awarded six contracts for SAP on-call services. These contracts allowed City departments to engage qualified firms to support time-limited SAP projects through task orders.
Staff issued RFP No. 19327210 in January 2025 to replace the expiring contracts. The goal was to establish a new pool of qualified vendors for contracts from July 1, 2025, through June 30, 2030. As the City continues to upgrade and expand its SAP platform - including tools like Fiori apps, business intelligence dashboards, and utility-specific solutions - specialized support is needed for tasks such as system configuration, data integration, troubleshooting, and project delivery. The on-call structure allows the City to access skilled resources for any department on a limited time basis.
ANALYSIS
The solicitation was posted on OpenGov, the City’s eProcurement platform, for 32 days; 3,339 vendors were notified of the opportunity. The RFP closed on February 17, 2025. Work under each contract will be assigned through individual Task Orders. The City is not obligated to assign any specific amount of work or budget to any contractor. The proposed annual not-to-exceed 7 Phoenix Business SAP On-Call Contract No. C26193272G; https://www.paloalto.gov/files/assets/public/v/1/it- department/cmr-attachments/sap-on-call/phoenix-business-c26193272g.pdf 8 EPI-USE America SAP On-Call Contract No. C26193272H; https://www.paloalto.gov/files/assets/public/v/1/it- department/cmr-attachments/sap-on-call/epi-use-america-c26193272h.pdf 9 June 22, 2020 City Council Staff Report no. 11360: https://www.paloalto.gov/files/assets/public/v/1/agendas- minutes-reports/reports/city-manager-reports-cmrs/year-archive/2020/id-11360.pdf 10 January 16, 2025 SAP On-Call Professional Services RFP: https://procurement.opengov.com/portal/palo-alto- ca/projects/141183
amount increases these contracts by $350,000 over the Fiscal Year 2025 contract year. In FY2025 the department spent 95% of the not-to-exceed amount. It is estimated that 40% of the task orders will be funded by the Utilities Department in Fiscal Year 2026. Staff has received an increase in request for enhancements and process improvements which warrants the increase of the not-to-exceed amount.
FY26 through FY27 Consulting Needs:
•$1.12M for Ongoing Production Support
(Payroll/HR, CRM, Utilities, Finance, Budget) — tied to staff vacancies and operational continuity
•$1.05M for In-Progress & Planned Enhancements
(e.g., Fiori upgrades, Year-End closing automation, SAP integration, HR and utility reporting)
Tentative Pipeline Projects (FY26–FY27):
•SAP S/4 HANA Migration (Administrative Services Department, HR, Utilities) •Fiber Billing Integration
•SEW Portal Upgrade Project (Utilities)
•Telecom OSS/BSS Project (Utilities)
•Bill Redesign Project (Utilities)
•OMS Upgrade Project (Utilities)
Professional Services may include:
•Upgrading and customizing the City’s SAP software to meet changing business needs •Improving user interfaces and staff experience
•Supporting payroll, timekeeping, benefits, and HR processes •Enhancing financial and utility billing systems
•Developing dashboards and reports
•Troubleshooting technical issues and keeping critical systems highly available •Integrating SAP with other City systems
•Providing expert advice and hands-on support for specialized projects across departments
Vendors were asked to provide hourly rates for a range of specialized SAP roles, including developers, analysts, architects, and project managers. These roles support key areas such as finance, human resources, utility billing, procurement, customer service, data reporting, system security, and application development.
Table 1: Summary of Request for Proposal
Proposal Description SAP On-Call Professional Services RFP 193272 Date Solicitation was Issued January 16, 2025
Date Solicitation was Closed February 17, 2025
Proposed Length of Project 5 years
Number of Vendors Notified 3339
Number of Proposal Packages Downloaded 67
Total Days to Respond to Proposal 32
Pre-Proposal Meeting No
Pre-Proposal Meeting Date N/A
Number of Proposals Received 26
Proposal Price Range $45 – $250/hour (depending on consultant roles as outlined above)
Public Link to Solicitation https://procurement.opengov.com/portal/pa lo-alto-ca/projects/141183
Proposals were evaluated by staff from the Information Technology and Utilities Departments based on criteria outlined in the RFP, including proposal quality, feasibility and effectiveness of the proposed solution, relevant experience and staff qualifications, financial stability, ability to meet deadlines, past performance with the City and other agencies, and capacity to provide ongoing support. This is an on-call contract for as-needed services, and each vendor submitted hourly rates that vary by level of service and expertise, reflecting their specialization in different areas of the scope of work. The selected vendors submitted well-structured proposals, demonstrated proven experience, and showed a strong ability to meet current and future City needs. Several have successfully worked with the City in the past and received positive feedback for their responsiveness and service delivery. In addition to technical qualifications, vendors were selected for their ability to meet operational and compliance requirements and to support the City’s long-term goals.
On-call services will be assigned on a Task Order basis. A contractor will be selected based on their resource availability and relevant expertise. Staff will be responsible for evaluating the adequacy of each task order's proposed scope of work, contractor experience, and billing rates.
To provide checks and balances, department directors or designee will be required to approve all task orders, reviewing contractor selection and budget adherence. The City Manager or designee will approve any task order over $100,000. Designated staff will manage the deliverables and budget of each task order, approving invoices to ensure that the billed hours match the hours actually worked as well as acceptance of work progress and products.
Before entering into a task order, staff will review whether work demands and specialized skills not available internally require use of a consultant. Task orders will also require consultants provide documentation and effective knowledge transfer.
These contracts operate on an on-call, project-by-project basis and do not guarantee a minimum level of work or budget. The contract terms allow the City to terminate without cause/for convenience by providing written notice to the contractor. In the event the City finds itself facing a challenging budget situation, and it is determined that City resources need to be refocused elsewhere, the City can terminate. Other options include termination due to non- appropriation of funds or amending the contract to reduce the cost, for example, by reducing the scope of work. The contract may also be temporarily suspended by written notice of the City Manager.
FISCAL/RESOURCE IMPACT
Funding for these on-call contracts in FY 2026 ($350,000) is within proposed budgeted levels; no additional funding is requested. The not-to-exceed amount is higher than the budgeted amount to allow other departments to utilize these on-call contracts with their approved operating and capital budgets.
Funding for subsequent years of the contract will be subject to approval through the annual budget development process. The Information Technology Department is funded by an internal service fund. Approximately 49% of the department is General Fund funded with the remaining 51% funded by enterprise and special revenue funds.
STAKEHOLDER ENGAGEMENT
Service providers were evaluated by City Staff and chosen through the City’s RFP process, RFP No. 193272.
ENVIRONMENTAL REVIEW
The approval of this contract 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.
LINKS TO CONTRACTS
SAP On-Call Project Support Services Contracts:
• 360S2G SAP On-Call Contract No. C26193272A11
• Sage Group Technologies SAP On-Call Contract No. C26193272B12 • Avertra SAP On-Call Contract No. C26193272C13
• Amick Brown SAP On-Call Contract No. C26193272D14
• 2iSolutions SAP On-Call Contract No. C26193272E15
• Peloton Group SAP On-Call Contract No. C26193272F16
• Phoenix Business SAP On-Call Contract No. C26193272G17 • EPI-USE America SAP On-Call Contract No. C26193272H18 APPROVED BY:
Darren Numoto, Chief Information Officer
11 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/360s2g- c26193272a.pdf
12 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/sage- technologies-group-c26193272b.pdf
13 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/avertra- c26193272c.pdf
14 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/amick-brown- c26193272d.pdf
15 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/2isolutions- c26193272e.pdf
16 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/peloton-group- c26193272f.pdf
17 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/phoenix- business-c26193272g.pdf
18 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/epi-use-america- c26193272h.pdf