TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: Maria Öberg
SUBJECT: See Below DATE: March 24, 2025
Approved
Date:
4/4/25
COUNCIL DISTRICT: Citywide
SUBJECT: Oracle Master Agreement for Software Licenses and Support Services
RECOMMENDATION
Approve the Oracle Master Agreement to enable issuance of purchase orders for Oracle software licenses and support services subject to the appropriation of funds.
SUMMARY AND OUTCOME
Accepting this recommendation allows the City to execute the Oracle Master Agreement, which would allow the City to issue purchase orders for Oracle software licenses and support services in the future that fall under the Master Agreement, subject to the appropriation of funds.
BACKGROUND
Oracle requires customers to accept the terms and conditions of its Master Agreement prior to purchasing licenses to use its software and on premises support services.
Licenses and support services are purchased through purchase orders, which are governed by the terms and conditions of the Master Agreement.
Since its inception in 2014, the San José-Santa Clara Regional Wastewater Facility Capital Improvement Program (CIP) has utilized the services of a third-party vendor, Stantec Consulting Services, Inc. (formerly MWH Americas, Inc.) using Oracle Primavera P6 software for essential program and project scheduling services. At the end of 2020, scheduling services for the CIP, using Primavera P6 software, transitioned COUNCIL AGENDA: 4/15/25
FILE: 25-366
ITEM: 2.10
HONORABLE MAYOR AND CITY COUNCIL
March 24, 2025
Subject: Oracle Master Agreement for Software Licenses and Support Services
to two different consultants: PMA Consultants LLC and Project Controls Joint Venture LLC. The agreements expire on December 31, 2026, and the City does not intend to renew or extend these agreements; staff instead would prefer to assume direct responsibility for CIP scheduling activities using the Oracle Primavera P6 software. The City procurement of Primavera P6 licenses will ensure a seamless migration of CIP data from the vendor-hosted environment to a City-hosted environment. The use of Primavera P6 will also maintain consistency and continuity in the capability and format of CIP schedules.
The City also uses Oracle on premises support services for licensing and authorizing the City to operate financial applications on Oracle databases. These applications include but are not limited to the Financial Management Systems, Business Tax, HR/Payroll, Data Warehouse, Amanda Systems, Code Enforcement Systems, Asset Management Systems, and Capital Project Management Systems. Additionally, the support services provide access to security updates, bug fixes, technical support, and advisory resources.
ANALYSIS
In reviewing the terms and conditions of the Oracle Master Agreement, staff identified two specific terms (excerpted below) that the City does not typically agree to standard agreements, however, they are common in software agreements:
1. Mutual indemnification. This clause provides that if a third party makes a claim against either the City or Oracle that any information, design, specification, instruction, software, data, hardware, or material furnished by either the City or Oracle infringes on the third party’s intellectual property rights, the party who provided the information will indemnify the other party.
2. Limitation of liability. This clause limits Oracle’s liability to their gross negligence or intentionally wrongful acts up to the amount of fees the City paid Oracle under the schedule giving rise to the liability, which will be approximately $7,300 per year.
Oracle has indicated to the City that it is not willing to negotiate these terms and conditions. Its position is that the terms are standard and are required for everyone who elects to use their software.
Despite these atypical contractual terms, staff have determined that the probability of the risks occurring is low due in part to the fact that Oracle has implemented robust safety and security practices and also that the type of data collected through the Oracle Primavera P6 software do not lend itself to privacy concerns. Using the Primavera P6 software will ensure that the CIP program and project scheduling services are uninterrupted during the transition to City management, this outweighs the risks of the
HONORABLE MAYOR AND CITY COUNCIL
March 24, 2025
Subject: Oracle Master Agreement for Software Licenses and Support Services
atypical contract terms. To try and limit the risks and City’s liability should City Council accept the recommendation herein, staff will implement the following measures:
1. Finance Department will manage the Master Agreement based on the established processes and will review any updates to terms, as needed, to assess if the City should consider terminating the Agreement.
2. I nformation Technology Department will review all Oracle software and support service purchases for security, infrastructure, and privacy risks. Departments will be responsible for submitting requests to purchase Oracle software licenses or update Oracle software applications to the Information Technology Department with all supporting technical documentations and follow the change management processes.
3. The Information Technology Department will require all City staff who will be involved in utilizing the City’s Oracle software application(s) and support services to read and acknowledge the terms and conditions in the Oracle Master Agreement.
EVALUATION AND FOLLOW-UP
This memorandum will not require any follow-up from staff.
COST SUMMARY/IMPLICATIONS
The recommended master agreement is to agree to the terms and conditions for the licenses and services of Oracle and it has no cost implications. However, entering into the master agreement will allow the City to issue purchase orders for Oracle software licenses and support services. The total cost of these purchase orders will be subject to appropriation and subject to the City Manager’s contract authority.
COORDINATION
This memorandum has been coordinated with the City Attorney’s Office, the City Manager’s Budget Office, the Environmental Services Department, and the Information Technology Department.
PUBLIC OUTREACH
This memorandum will be posted on the City’s Council Agenda website for the April 15, 2025 City Council meeting.
HONORABLE MAYOR AND CITY COUNCIL
March 24, 2025
Subject: Oracle Master Agreement for Software Licenses and Support Services
COMMISSION RECOMMENDATION AND INPUT
No commission recommendation or input is associated with this action.
CEQA
Not a Project, File No. PP17-003, Agreements/Contracts (New or Amended) resulting in no physical changes to the environment.
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
/s/
Maria Öberg
Director of Finance
For program- and contract-related questions, please contact Albie Udom, Deputy Director of Finance and Chief Procurement Officer, Finance Department, at email [email protected]
.
For program-related questions, please contact Nick Ajluni, Division Manager of Utility Financial and Business Operations – Environmental Services at email [email protected]
.