April 5, 2022, Item #11DATE: TO: FROM: CONTACT: SUBJECT: Summary: AGENDA REPORT CityofPoway April 5, 2022 Honorable Mayor and Members of the City Council Aaron Beanan, Director of Finance . Brad Rosen, Assistant Director of Finance Operations ~ Brad Rosen, Assistant Director of Finance Operations (858) 668-4452 or [email protected] CITY COUNCIL Approval of Agreement Between the City of Poway and Crayon Software Experts LLC and the California Department of Technology (CDT) for the Purchase of Microsoft Product and Services, and Appropriation of Funds The City's current three-year Microsoft Enterprise Agreement (EA) which provides software licensing for all computers, servers, databases, and Office 365 applications (Outlook, Word, Excel, Teams, One Drive, SharePoint) expires on April 30, 2022. As such, the City needs to renew its agreement. An agreement with Crayon Software Experts utilizing the State of California Department of Technology (CDT) Enterprise Level Agreement (ELA) for Microsoft 365-G5 licenses and a Microsoft Select Plus Agreement for server and database licensing is the most cost-effective solution available. The Microsoft 365-G5 licensing includes Microsoft's best security products including advanced threat protection, identity protection, cyber security, voice, information archiving and data analysis tools. The agreement includes all upgrades distributed by Microsoft and consolidates the City's software purchases at a reduced cost while streamlining the software license management and accounting process. Recommended Action: It is recommended that the City Council authorize the City Manager to execute an agreement with Crayon Software Experts LLC utilizing the CDT contract for a four-year Microsoft 365-G5 ELA and a three-year Microsoft Select Plus Agreement for server and database licensing, and appropriate funds. Discussion: As part of its technology procurement practices, the City's Information Technology (IT) Division typically upgrades and deploys core software on a timescale that keeps software versions at, or near, current commercial release versions. This practice is necessary to ensure core City software is current with product feature and security-related improvements. 1 of 5
April 5, 2022, Item #11In the prior twelve years, the City has entered into four three-year enterprise agreements through a cooperative County of Riverside contract for Microsoft licensing. The City's current EA will expire on April 30, 2022. Under the terms of the Riverside cooperative purchase agreement, the City of Poway received the most competitive EA available to local government agencies. Over the past several years, Microsoft has raised retail prices multiple times with increases amounting to approximately 36% compared to our current EA cost from 2019. The Riverside agreement expired during the past year and Microsoft did not renew that agreement with the same level of discounts. After a review of the licensing options available to the City, entering into an ELA for Microsoft Office 365-G5 product and services with the State of California Department of Technology and a Microsoft Select Agreement for server and database licensing provides the most cost-effective model. CDT conducted a full procurement process through a Request For Offer (RFO) for Microsoft 365 (M365) products and services, and awarded the consolidated contract to Crayon Software Experts, LLC. CDT has broad responsibility and authority over all aspects of technology in California state government and partners with local government and educational entities to deliver and develop responsive solutions for business needs. The ELA and Select Plus Agreements include discounted and fixed pricing over a period of time. CDT will facilitate the City's enrollment through Crayon for the M365 licensing and their online services. The Microsoft CDT Agreement is a five-year agreement that started on May 1, 2021. The agreement allows State agencies and local governments to join on the anniversary date. As such, the City will enter into a four-year agreement, from May 1, 2022 through April 30, 2026 for the M365-G5 licensing. The agreement has two pricing levels based on the total number of statewide M365-G5 licenses purchased. The lower cost level was reached in early 2022 as over 200,000 state and local government licenses were purchased. As such, Poway will receive that lower pricing. The CDT agreement only covers the M365-G5 licensing, and a separate three-year Microsoft Select Plus Agreement from May 1, 2022 through April 30, 2025 is needed for the server and database licensing. In addition to the current applications and security products utilized by the City, the purchase of the M365-G5 license under the CDT agreement provides the City Microsoft's best security products including advanced threat protection, identity protection, cyber security, voice, information archiving and data analysis tools. At the end of each contract year, the City must report to Microsoft any products that need to be added to the ELA and Select Plus Agreements. Microsoft identifies these license additions as true-up fees. Any additional Microsoft licenses required by the City would be added under these agreements at the prices identified. Historically, the City has not seen increased pricing under this portion of the EA as the number of licenses has remained fairly consistent. Environmental Review: This action is not subject to review under the California Environmental Quality Act (CEQA). Fiscal Impact: The cost of the four-year ELA is $604,864.18. The cost for the three-year Select Plus Agreement is $40,393.98. The total cost for Microsoft licensing for these agreements $645,258.16. The City will be invoiced annually as detailed in the table on the following page. 2 of 5
April 5, 2022, Item #11•J -' iQi,....,, .... ,1.. .. ,ffl ..J""-.• ..... .
. •·-•· , ~ . 1 . , .. • ..... ·-··-_ ... -.. ----........ • Year1 $125,689.71 $13,464.66 $139, 154.37 Year 2 $137,116.20 $13,464.66 $150,580.86 Year 3 $163,609.90 $13,464.66 $177,074.56 Year4 $178,448.37 --$178,448.37 TOTAL $604,864.18 $40,393.98 $645,258.16 The City proactively plans for the purchase of the Microsoft licensing by setting aside a portion of the anticipated licensing costs by charging Departments for the number of licenses used as part of the annual replacement charges for each computer. However, the increase in Microsoft licensing and the move to a four-year agreement requires an additi'onal appropriation. The adopted FY 2021-22 budget includes $303,620 (115010-61222) and $40,000 (113010-61222) for this purpose for a total available budget of $343,620. An appropriation of $301,638.16 to 113010-61222 is being requested from General Fund unassigned fund balance for these agreements. Sufficient funds are available for this request. Future rent charges will be updated to reflect the new costs associated with the updated licensing model. Public Notification: None. Attachments: A. Quote: Crayon Software Experts LLC -M365-G5 B. Quote: Crayon Software Experts LLC -Select Plus Reviewed/ Approved By: Wend ,;,aserman Assistant City Manager 3 of 5 Reviewed By: Alan Fenstermacher City Attorney
April 5, 2022, Item #11Crayon Quote Date: 03.02.2022 Customer Otech on behalf of City of Poway Attn: Brad Rosen [email protected] ••Budgetary Pricing does not include CDT Fees•• **Please note a final quote will be issued once final configuration is determined and validated by Microsoft.•• ••FromSA pricing available on initial purchase of GS licenses only; all reservations and adds will receive full USL pricing.•• Pricin2 for Enterorise Aereement Renewal Part Number Description Qty Procmg and Usage Year 2 -11 months wrth 05/01 start (05/01/2022 • 03/27/2023) Enterprise Products • Monthly subscriptions AAL-48033 M365 ES From SA GCC ALNG SubsVL MVL PerUsr Additional Products• Monthly subscriptions 7MS-00001 Project Plan3 GCC Shared All Lng Subs VL MVL Per User P3U-00001 VisioPlan2GCC ShrdSvr ALNG SubsVL MVL PerUsr Part Number Description Qty Pricing and Usage Year 3 -12 months (03/28/2023 -03/27/2024) Enterprise Products • Monthly Subscriptions AAL-48033 M365 ES From SA GCCALNG SubsVL MVL PerUsr Additional Products -Monthly subscriptions 7MS-00001 Project Plan3 GCC Shared All Lng Subs VL MVL Per User P3U-00001 VisioPlan2GCC ShrdSvr ALNG SubsVL MVL PerUsr Part Number Description Qty Pricing and Usage Year 4 -12 months (03/28/2024 -03/27/2025) Enterprise Products -Monthly Subscriptions AAL-48033 M365 ES From SA GCC ALNG SubsVL MVL PerUsr Additional Products • Monthly Subscriptions 7MS-00001 Project Plan3 GCC Shared All Lng Subs VL MVL Per User P3U-00001 VisioPlan2GCC ShrdSvr ALNG SubsVL MVL PerUsr Part Number Description Qty Pricing and Usage Year 5 -12 months (03/21/2025 -03/31/2026) Enterprise Products • Monthly Subscriptions AAL-48033 M365 ES From SA GCC ALNG SubsVL MVL PerUsr Additional Products -Monthly subscriptions 7MS-00001 Project Plan3 GCC Shared All Lng Subs VL MVL Per User P3U-00001 VisioPlan2GCC ShrdSvr ALNG SubsVL MVL PerUsr •• Pricing Expires in 45 days from date of quote•• **All items included in this RFQ are new, unused, not refurbished, with original manufacturer warranty.•• Remit to Address: CDT will remit payment 4 of 5 ATTACHMENT A Annual Unit Price 336 $ 350.35 1 $ 249.26 3 $ 124.63 Year 2 Total Annual Unit Price 336 $ 382.20 1 $ 271.97 3 $ 135.99 Year 3 Total Annual Unit Price 336 $ 456.44 1 $ 271.97 3 $ 135.99 Year 4 Total Annual Unit Price 336 $ 498.02 1 $ 271.97 3 $ 135.99 Year 5 Total Total Years 2-5 CA Dept ofTech Admin Fees (6.21%) TOTAL Quoted by: Crayon Software Experts LLC 12221 Merit Drive, Suite 1400 Dallas, TX 75251 Susan McDowell [email protected] Extended Amount $ 117,717.60 $ 249.26 $ 373.89 $ 111,340.75 Extended Amount $ 128,419.20 $ 271.97 $ 407.97 $ 129,099.14 Extended Amount $ 153,363.84 $ 271.97 $ 407.97 $ 154,043.71 Extended Amount $ 167,334.72 $ 271.97 $ 407.97 $ 161,014.66 is 569,491.33 j j $ 35,365.15 j i s 604,864.18 j
April 5, 2022, Item #11Crayon Quote Date: 03.02.2022 Customer Part Number 7NQ-00301 9EA-00268 9EM-00263 Part Number 7NQ-00301 9EA-00268 9EM-00263 Part Number 7NQ-00301 9EA-00268 9EM-00263 City of Poway Attn: Brad Rosen [email protected] Select Plus Renewal for SA Description Pricing and Usage Year 1 (05/01/2022 -04/30/2023) SQLSvrStdCore SNGL SA MVL 2Lic Corelic WinSvrDCCore SNGL SA MVL 2Lic Corelic Win Server Standard Core Slng SA 2L Description Pricing and Usage Year 2 (05/01/2023 -04/30/2024) SQLSvrStdCore SNGL SA MVL 2Lic Corelic WinSvrDCCore SNGL SA MVL 2Lic Corelic Win Server Standard Core Slng SA 2L Description Pricing and Usage Year 3 (05/01/2024 -04/30/2025) SQLSvrStdCore SNGL SA MVL 2Lic Corelic WinSvrDCCore SNGL SA MVL 2Lic Corelic Win Server Standard Core Slng SA 2L ** Pricing Expires in 45 days from date of quote** Qty Qty Qty 10 $ 48 $ 72 $ 10 $ 48 $ 72 $ 10 $ 48 $ 72 $ Annual Unit Price 584.85 125.58 22.06 Year 1 Total Annual Unit Price 584.85 125.58 22.06 Year 2 Total Annual Unit Price 584.85 125.58 22.06 Year 3 Total Quoted by: Crayon Software Experts LLC 12221 Merit Drive, Suite 1400 Dallas, TX 75251 Susan McDowell [email protected] Extended Amount $ 5,848.50 $ 6,027.84 $ 1,588.32 $ 13,464.66 Extended Amount $ 5,848.50 $ 6,027.84 $ 1,588.32 $ 13,464.66 Extended Amount $ 5,848.50 $ 6,027.84 $ 1,588.32 $ 13,464.66 Total Value Years 1-3 I $ 40,393.98 I **All items included in this RFQ are new, unused, not refurbished, with original manufacturer warranty.** 5 of 5 Remit to Address: Crayon Software Experts, LLC Attn: Finance Manager 12221 Merit Drive, Suite 1400 Dallas, TX 75251 Phone: 469-329-0290 [email protected] Send POs to [email protected] ATTACHMENT B