HomeMy WebLinkAboutStaff Report 400-08TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: UTILITIES
REPORT TYPE: CONSENT CMR: 400:08
DATE:OCTOBER 6, 2008
SUBJECT:Approval of Sole Source Software Purchase, Support and Maintenance
Contract and Contract Contingency with Pitney Bowes Software, Inc. in
the Amount of $330,000 for the Upgrade of the Utilities Bill Print
Processing and Storage Systems
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or his designee to
execute the attached contract, or contract in substantially similar form, which will include a
schedule for deliverables to be included in the exhibits and attachments, with Pitney Bowes
Software Inc. (Group 1 Software) in the amount of $300,000 for the purchase, implementation,
support and maintenance of software required to upgrade the Utilities bill print processing and
storage systems.
Staff also recommends that Council approve and authorize the City Manager or his designee to
negotiate and execute one or more change orders to the contract with Pitney Bowes Software Inc.
for related, additional but unforeseen work which may develop during the project, the total value
of which shall not exceed $30,000.
BACKGROUND
Utilities bills are printed on-site in City Hall using third-party software compatible with the
Utilities Customer Information System (CIS). The printing software system, Group 1 Software
Inc.’s DOC 1, was originally approved for purchase and implementation by Council on June 28,
1999 (CMR 280:99) in the amount of $341,539, with a contract contingency of $34,000. Group 1
Software Inc. was subsequently wholly acquired by Pitney Bowes Software Inc.
The City of Palo Alto has upgraded its SAP Enterprise Resource Planning (ERP) Version 4.6c
package to SAP ERP 2005. As part of that upgrade, "BANNER", the current CIS, is being
converted to the "SAP Industry-specific Solution for Utilities (SAP-ISU)" system with funding
from several Capital Improvement Projects. The current utilities bill print software must be
upgraded from Series 4 to Series 5 to ensure the proper functioning of the new SAP-ISU
platform.
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DISCUSSION
The Utilities CIS Conversion Project has specified that customers will receive, at minimum, the
current level of utility billing functionality after the SAP conversion. In the final Statement of
Work developed by the City for the SAP-ISU implementation, it was identified that the current
Pitney Bowes/Group 1 DOC 1, Series 4 software would be maintained as the software for
printing utility bills.
The City’s SAP consultant has recently determined that the previously identified Series 4
software solution for Utilities billing is no longer viable since:
the data extract file format of Series 4 is not compatible with the input requirements of
the new SAP-ISU without significant programming modifications to the SAP platform;
modifying SAP-ISU to accept the current output file format of Series 4 would still require
future reprogramming of SAP-ISU to accept a different file format when DOC 1, Series 4
is finally de-supported by the manufacturer. Sale of DOC 1, Series 4 was halted in 2004.
Such modification would be necessary for either an upgraded Pitney Bowes/Group 1 or
other third-party software product.
"E2 Vault" is necessary to complete the archival repository functionality of the SAP-ISU
system, and is a critical component of online utility bill-viewing capability.
Staff recommends a sole source contract with Pitney Bowes/Group 1. The DOC 1 system is
proprietary software owned by Pitney Bowes/Group 1 Software, which is the only company that
can provide the upgraded software, implementation and training of city staff for the upgrade
from DOC 1, Series 4 to Series 5, and the "E2 Vault" software application needed for data
storage, compression and retrieval.
Alternatives :
All alternatives considered (including the recommended option) would be required to meet the
SAP-ISU project implementation fimelines for: a) programming development and system testing
of all functions (beginning mid-October 2008); and, b) a Utilities SAP-ISU "go live" date of
February 2009. Delay in implementing the billing function will significantly increase the total
implementation cost for the SAP-ISU conversion project.
Alternatives to this sole source request considered the following options as permanent solutions:
Continue using the current DOC 1, Series 4. This would require extensive programming
changes to create an interface capable of working with SAP-ISU. This solution was not
selected because of the product age and lack of manufacturer support of the Series 4
product (which would force a change upon the City in the future), the incompatibility of
the Series 4 data extract file with SAP-ISU, and the time required to produce an interface
with SAP-ISU;
Outsourcing of the bill print function to a third-party fulfillment house. This would
remove the physical reproduction and mailing of utility bills from City Hall. Staff met
with two third-party billing fulfillment houses to evaluate this alternative. This alternative
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was not selected due to the difficulty in meeting the strict SAP-ISU project timelines.
There would be insufficient time available to issue and process a Request for Proposal for
third-part fulfillment house services, program an interface to SAP-ISU, and create a bill
design. Staff will monitor this billing methodology as a potential cost-effective
alternative for Utilities billing in the future when the City’s current investments in bill
production, sorting, insertion and processing equipment in City Hall reach the end of
their usable life.
Utilize the internal billing capability of SAP-ISU. SAP-ISU has the capability of bill
printing and presentment. Due to the significant limitations for bill design and customer
data presentment, this alternative was not selected as a permanent solution. There would
be significant programming required by consultants to display up to seven possible utility
services. Depending upon the programming resources available after implementation of
the recommended altemative, this option may be considered as a back-up system in the
event of a DOC 1 system failure.
RESOURCE IMPACT
The not-to-exceed cost of the combined implementation for DOC 1, Series 5, and the "E2 Vault"
product is $300,000. These funds, along with a 10% contingency ($30,000), are currently
available in Capital Improvement Project TE-07003 "Bill and Payment Processing." Staff is
negotiating a final contract and exhibits and attachments with the vendor, including an exhibit or
an attachment for the schedule of deliverables. A detailed timeline and payment schedule will be
included in the final executed agreement with Pitney Bowes Software Inc.
ENVIRONMENTAL ASSESSMENT
Approval of this contract does not constitute a project under California Environmental Quality
Act (CEQA). Therefore, no environmental assessment is required.
ATTACHMENT
A: Pitney Bowes Software Inc. Contract
PREPARED BY:TOM AUZENN~
Assistant Director,~
Utilities Customer Support Services
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
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