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RESOLUTION NO. 2015-120 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AUTHORIZING THE CITY MANAGER, OR DESIGNEE, TO PURCHASE VARIOUS COMPUTER EQUIPMENT FROM DELL, INC. UTILIZING NASPO VALUEPOINT CONTRACT #B27160, APPROVING A LEASE AGREEMENT WITH DELL FINANCIAL SERVICES TO LEASE 200 COMPUTER WORKSTATIONS, AND APPROVING A TRANSFER OF $60,610 FROM THE FY 2014-2015 INFORMATION TECHNOLOGY SERVICES CAPITAL BUDGET TO THE FY 2014-2015 INFORMATION TECHNOLOGY SERVICES SUPPLIES AND SERVICES BUDGET (4/5 VOTE REQUIRED)
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RECOMMENDED ACTION
Recommended Action
Council adopt the resolution.
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SUMMARY
The City wishes to contract with Dell, Inc. to provide computer equipment and enter into a leasing services contract to replace 200 desktop computers. Purchases would be via the NASPO ValuePoint contract #B27160. The City also seeks approval to transfer $60,610 from the FY 2015 Information Technology Services (ITS) Capital budget to the FY 2015 ITS Supplies and Services budget for the lease program.
ENVIRONMENTAL REVIEW
The Development Services Director has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that approval of a contract to purchase and rent computer equipment is not a "Project" as defined under Section 15378 (b)(2) of the State CEQA Guidelines because approval of the contract is a continuing administration activity; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary.
BOARD/COMMISSION RECOMMENDATION
Not applicable
DISCUSSION
The City’s Information and Technology Services (ITS) Department has begun an effort to modernize the City’s fleet of desktop and server computers. Nearly 60% of the desktop computers in the City utilize an operating system (Windows XP) which is no longer supported by the software manufacturer for security updates as well as program fixes. This poses significant issues in terms of network security, stability of the system as well as compatibility with new software that is deployed throughout the City.
Additionally, over half of the City’s 150 servers currently utilize an operating system which is also no longer supported by the software manufacturer, and like the desktop computers operating system, the software manufacturer no longer publishes software updates and program fixes with the same issues as outlined above. This is becoming an increasingly larger problem in that the older server operating system software does not work well with newer server operating systems causing a variety of issues which can lead to excessive downtime for these older servers. This causes productivity delays and customer service problems, as well as, these issues take ITS staff away from proactive projects in order to fix issues that would most likely be solved with upgraded servers and software.
Therefore, City ITS staff is currently moving forward with a modernization project to replace aging computers and servers. As part of this project, staff is seeking to standardize the computers (both desktops and servers) as well as the manufacturer in order to provide much quicker resolution to issues. Currently, there is a menagerie of desktop and server computer manufacturers in service throughout the City. This is problematic as there is not one source for ITS staff to consult with to troubleshoot issues. This also is problematic as testing of new software is almost impossible given the mix of desktop/server hardware that is in service today.
In order to rectify these issues, as well as modernize the computer fleet, the City is seeking to utilize a competitively bid contract via the NASPO ValuePoint (NASPO) contracting alliance (formerly the Western States Contracting Alliance - WSCA). NASPO ValuePoint is a cooperative purchasing program which facilitates public procurement solicitations and agreement using a lead state model. They are a non-profit organization dedicated to providing State Chief Procurement Officers with the support and procurement resources they need. Every NASPO ValuePoint contract is the result of a formal competitive solicitation conducted by trained, professional procurement officials of a lead state’s central procurement office under direction of a lead state’s State Procurement Official in accordance with that state’s procurement statutes, regulations, and policies. Section 2.56.140 of the City’s Municipal Code allows the City, to utilize this competitively bid contract to purchase computer equipment, provided that the purchasing agent determines the competitive bid process utilized was consistent with good purchasing practices. The purchasing agent has made that determination for the NASPO ValuePoint cooperative purchasing program. Because the contract value exceeds $100,000, Section 2.56.140 also requires City Council approval of the contract.
Staff has selected Dell Computers as the vendor of choice for the modernization project. Dell’s excellent reputation in the technology industry, coupled with the exemplary customer service that we’ve received over the years from Dell, as well as the fact that they are low bid on a majority of our quotes, makes purchasing from Dell an easy decision. Staff has almost exclusively been purchasing Dell servers, printers, network equipment and most recently desktop computers. Standardizing the fleets over the next few years will provide one point of contact with a vendor for service, as well as allowing much more flexibility in sharing hardware throughout our system.
Staff is also seeking approval to enter into a lease financing agreement with Dell Financial Services to lease 200 desktop computer workstations. The lease will be for a 4 year period, and at the end of the lease, the City will replace the computers with a new lease program. Leasing of computers offers a significant benefit over a straight purchase. The City will be able to leverage funds to acquire more computers. With a budget of $60,610 for computer replacement, if the City went with a straight purchase, only approximately 60 computers can be purchased. With a lease, the City can acquire 200 computers. The cost of a one-time purchase of 200 computers (not a lease) is $224,869. Although the current budget situation is brighter than previous years, there are still challenges in addressing equipment replacement needs. This approach spreads out the total cost over four years which provides a reduced impact to the ongoing budget.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site specific and consequently, the 500-foot rule found in California Code of Regulations section 18705.2(a)(11), is not applicable to this decision. Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy Community, Strong and Secure Neighborhoods and a Connected Community. The computer equipment replacement project positively affects all five strategic goals as they are used routinely to support projects and initiatives in each goal area.
CURRENT YEAR FISCAL IMPACT
Staff is seeking to transfer $60,610 from the FY 2015 Information Technology Services Capital budget to the FY 2015 ITS Supplies and Services budget for the lease project.
There is no net impact to the FY 2015 general fund budget as all funds for the lease have been included in the FY 2015 budget.
ONGOING FISCAL IMPACT
The 4-year lease agreement will require 4 yearly payments of $60,610. At the end of the lease, it is likely the City will enter into a new lease agreement with Dell for replacement of these 200 computers in FY 2020.
ATTACHMENTS
Exhibit A - Lease Agreement with Dell Financial
Exhibit B - NASPO ValuePoint Contract #B27160
Exhibit C - Dell Financial Services Quote
Staff Contact: Edward Chew, Director of Information Technology Services