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2002-07-22 City Council (8)
-Cityof Polo Alto C ty Manager’s Report TO: ATTENTION: HONORABLE CITY COUNCIL-5 CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES DATE:JULY 22, 2002 CMR: 356:02 SUBJECT:APPROVAL OF FOUR CONTRACTS TOTALING $4,062,879 ASSOCIATED WITH THE IMPLEMENTATION OF THE ENTERPRISERESOURCE PLANNING (ERP) SYSTEM RECOMMENDATION Staff recommends that Council: 1.Approve and authorize the Mayor to execute the attached Software License and Services Agreement with SAP, Inc. in the amount of $572,281 (Attachment 1). 2.Authorize the City Manager or his designee ~o exercise, the option to continue the maintenance support agreement with SAP, Inc. -for nine consecutive years, provided the qualityofthe vendor’s service is acceptable during the first year of the contract. Approve and authorize the Mayor to execute the attached professional service agreement with ea consulting, inc: for the implementation of the soflware in the amount of $3,168,328 (Attachment 2). o Approve and authorize attached Amendment No. 2 in the amount of $150,000 to the existing contract, No. $2140169, with Government Finance Officers Association (Attachment 3). - Approve and authorize the Mayor to execute the attached lease between the City of Palo Alto and 300 Hamilton Associates for 4,655 square feet of basement space at 300 Hamilton Avenue at an annual cost of $172,270 for 2.5 years (Attachment 4). DISCUSSION Project Description As discussed in the Information Technology Strategic Plan, the City currently has disparate business systems such as Human Resources, Payroll, and work order, which must be customized with interfaces between any two or more systems. Due to this multi- CMR:356:02 Page 1 of 7 vendor environment, the City incurs ongoing additional expenses for upgrade and retrofit costs, which result in delays in City services. The information kept on most of the City’s systems is unavailable or difficult to retrieve for statistical and financial artalysis. The Enterprise Resource Planning (ERP) system will consolidate and convert this data into useful information that will benefit not only the City, but also improve service to the residents and businesses of Palo Alto, as well as providing information exchange with other government agencies. The new system will provide staff opportunities to re- engineer and automate processes such as timekeeping, procurement~ and project management, which will result in desired information being readily available. The re- engineering efforts are cloSely related to many of the "Strengthening the Bottom Line" productivity and cost-cutting suggestions, as well as resolvingmany outstanding issues as defined in prior audits for Purchasing, Accounts Payable, Payroll, and Human Resources. This project will replace the existing financial system in Accounting, Budget, Purchasing (IFAS) and Payroll/Human Resources (Lawson). It will also deliver much needed new applications for work order management, project management, workflow, reporting tools, document management and imaging, and data warehouse. All of these applications will be fully-integrated into a citywide web-enabled suite utilizing a single database platform and tools. The foundation of an ERP system is its ~Workflow engine, which will improve effieiencies as well as effectivene.ss of the City’s business processes. It records and enforces the flow of the-City’s business processes, thus ensuring standardization, completeness and proper approvals electronically, and eliminating most paper transactions. Furthermore, it will give the City an integrated document management and imaging system to replace the rapidly deteriorating components that currently exist. Below is the estimated ERP implementation cost. Software License $572,281 Implementation Services $3,436,328 Annual Maintenance Fees $99,000 Project Space and Equipment.$595,000 Staff Education and Training $138,800 Estimated Total $4,841,409 Ongoing. Annual maintenance equal 17% with capped 5% increases for years 2 thru 5 and, 17% + 5% + CPI capped at 25% max for years 6 thru 10. Space rental will be ongoing for 2.5 years for a total cost of approximately $431,000. CMR:356:02 Page 2 of 7 Selection Process The ERP procurement was split into a two-step process, acquisition and implementation. This process was chosen to allow staff the. opportunity to select an. implementation team that best fits the needs of the organization. In addition, due to the importance and magnitude of this project, staff hired the Government Finance Officers Association (GFOA) to assist in the preparation of RFPs and selection process, as they have extensive experience in implementing ERP-in a local government environment. A Request For Proposals was issued electronically December 18, 2001 to approximately 24 ERP software vendors. Seven vendors responded to the RFP. Oracle and SAP were selected as top candidates based upon the scoring of all the proposals on major selection criteria described in Attachment 5. Oracle and SAP both provided 3 days of scripted demonstrations of their software to the City’s evaluation team, thus providing further valuable information toward the decision-making process. A Request For Proposals for Implementation Services was issued electronically February 13, 2002 to approximately 45vendors. Twelve consulting firms responded to the RFP. ¯ The evaluation committee, consisting of staff from Administrative Services,. Utilities; Public Works, Human Resources and representatives from GFOA rated andranked the proposals based upon reference checks, demonstrations, and interviews. The results were ¯ marked against a four-category list of decision criteria. As the highest-ranking firm, SAP was selected as the ERP so!tware vendor for a total cost of $572,281. SAP has a proven and powerful sottware suite developed specifically for the public sector. ea consulting, inc. (ea) was selected to implement the SAP suite of applications using a two-phase approach.. Phase One will implement financials, work order and projects.. Phase Two will .implement the .Human Resources and Payroll processes, ea staff is certified in the SAP implementation methodology and is continually trained to understand the intricacies of the software. In addition, of the finns bidding, ea has the most experience in public sector implementation, ea will implement the SAP software package within 18 months for a total cost of $3,168,328 as described in Attachment 2. The following table reflects the initial vendors’ proposal of $5.7 million and the final agreement of $3.9 million, a savings of $1.8 million. See details in table below. Implementation Costs Type of Contract Professional Services Training Travel and Accommodation Capped with time and materials $3,714,590 $467,800 $476,327 Not-to-exceed contract $2,840,328 Included in above $328,000 CMR:356:02 Page 3 of 7 Implementation method Implementation cost Holdback/Retainage Warranty on work GFOA Contract SAP Software Costs SAP License -Price prote.ction Web access users ITUsers ~ 3ra party Software Maintenance Utility Billing ITSP Support 9 months None 90 days after each phase $250,000 for 9 months ¯$652,500 None offered None proposed None proposed $182,775 17% with capped 5%¯ ¯ increases for years 2 thru 5; paymgnt at tst day of monk after SLA execution None proposed None proposed Phased implementation: Phase 1:10 months; Phase 2: 8.months 15% retainage payable at fmal system acceptance (approx $425,000) 90 days after each phase plus 60 days after each non- common process $150,000 for 12 months $438,568 24 months 5,000 20 $133,713 17% with capped 5% increases for years 2 thru 5 AND17% + 5% + CPI capped at 25% max for years 6 thru 10; payment quarterly in arrears Price protection until July, 2004 Price protection for 3 years to add ITSP customers Ongoing training is a major component of any implementation. As part of the training strategy described in Attachment 2, Exhibit "A", the City’s Key Users will attend a train- the-trainer program p~oyided by ea consulting in preparation for end-user training. The goal of the program is for City trainers to "teachback" and provide ongoing training to end-user community. City trainers will be selected based on their area of. expertise and will attend future refresher courses to be up to date on any system upgrades. Amendment to Government Finance Officers Association (GFOA) Contract GFOA has assisted City staff for the past six months with the finalization of the initial ¯ RFP for ERP software and in the evaluation of software vendors and implementation service providers. GFOA is very knowledgeable about ERP systems and has established rapport with major vendors, as well as various implementation-consulting firms. GFOA knows the ERP marketplace with respect to reasonable expectations and costs and has completed dozens of ERP. acquisitions for other public sector entities. CMR:356:02 Page 4 of 7 The proposed Amendment No. 2 covers GFOA’s assistance in providing quality assurance’and project management support during the implementation of the ERP project: GFOA will assist the City in developing project milestones, system design, process. change re-engineering and project oversight throughout the system implementation. Staff. did not initially plan to use GFOA as part of .the implementation team, but after experiencing their successful process, extensive knowledge, and valuable advice, it became apparent that their addition would be extremely valuable. 300 Hamilton Site Expansion of the Computer room to meet the needs of the ERP project will displace approximately 10 existing IT staff. In addition, the ERP project will require future employment of approximately 12 additional contractors. Lease of the 300 Hamilton site will provide Space for 12 ea contractors as well as 10 existing IT staff. The site will allow staff and contractors to be in one location with close proximity to City Hall while working on the ERP project. Staff determined the need for approximately 4,500 square feet of office space. A site close to City Hall-is required because the implementation staff will need to work Closely with City Hall Staff on the crucial steps of planning, designing and training. A survey of available. space in the University Avenue area was undertaken and below are results of the survey of the 9omparable space considered: LOCATION RENT/SQ FTiMONTH 203 Forest $3.25 420 Florence $4.00 285 Hamilton ~$5.00 300 Hamilton $3.24 The 300 Hamilton site was selected because it provided location, adequate space, connectivity to the fiber cable for faster connections, and the best overall lease rate. The terms of the propoged lease are summarized in. Attachment 4. Major conditions includea term of 2.5 years and a monthly rental of $9,080 per month. In addition to the_ rent, the C.ity as tenant will pay 13.1 percent of common area charges, and a management fee of 3 percent based on the annual rent. The monthly costs of the common area charge and management fee are estimated to be $5,300. The common area charges include the City’s share of utilities, taxes, janitorial and exterior maintenance expenses. CMR:356:02 Page 5 of 7 Annual Estimated Lease Costs in 2002-03 Rent Common Area Charge Management Fee Total $109,000 $60,000 $3,270 $172,270 Other Costs Associated with the Lease & Contractual Expenses Office supplies, equipment and furniture Moving expense Computer equipment and fiber connection Total $45,000 $5,OOO $72,0O0 $122,000 Staff anticipates that the ERP project will be completed within the 2;5 year term of the lease, but added two options to extend the term of the lease as a precaution, should the need arise. RESOURCE IMPACT. The ~!icense package of $572,281 will be acquired through SAP, Inc. maintenance fees for th~ first year...are approximatelY $99,000. Professional services will be provided by ea Consulting for $3,168,328 and GFOA for $150,000 for a total cost of $3,318,328. Of this, approximately $1,735,000 is payable in 2002-03 in accordance with the payment schedule described in Attachments 2 and 3, Exhibit "B." , Rent for the 300 Hamilton site is $109,000. The pro-rated share of common area charges and management fees is $63,2.7.0 for an annual cost of $172,270. Funds for this project and all other associated costs of implementation of the new ERP system have been included in the Capital Improvement Program (10216) and in the Technology Fund budget. Staff will be able to implement outstanding items from "Strengthening the Bottom Line" recommendations that Were held pending an ERP system implementation. These items will improve productivity and reduce operating costs in several areas as well as streamline processes. POLICY IMPLICATIONS The ERP system supports a number of program elements of the Comprehensive Plan. The elements supported are primarily in the Governance and Transportation chapters and provide technological support and assistance to facilitate the flow of information for different issues. CMR:356:02 Page 6 of 7 ENVIRONMENTAL ASSESSMENT Approval of this agreement does not constitute a project under the California Environmental Quality Act (CEQA); therefore, no environmental assessment is required. ATTACHMENTS Attachment 1: Exhibit A: Exhibit B: Exhibit C: Attachment 2: Exhibit A: Exhibit B: Exhibit C: Exhibit D: Attachment 3: Exhibit A: Exhibit B: Attachment 4: Attachment 5: Software End-User License Agreement with SAP, Inc- Authorized Affiliate Agreement Certificate of Non-Discrimination Response to Functional/Technical Requirements Agreement for Implementation Services for ERP Software with ea consulting, inc. Statement-of.Work Payment. Schedule Insurance Requirement Form Certificate of Non-Discrimination Amendment No. 2 to Professional Services Contract ($2140169) with GFOA Scope of Work, Payment Schedule Lease Summary .ERP Software Selection Criteria PREPARED BY: DEPARTMENTAL HEAD APPROVAL: CITY MANAGER APPROVAL:. MYRNA MCCALEB Business Analyst . ~r~tion Technology Director, Administrative Services FRANK BENEST City Manager CMR:356:02 Page 7 of 7 ATTACHMENT 1 i mySAP.com SAP PUBLIC SERVICES, INC. SOFTWARE END-USER LICENSE AGREEMENT ("Agreement") This Agreement is made effective as of the 22 day of July, 2002, by and between SAP Public Services, Inc., aDelaware corporation, With offices at The Ronald Reagan Building, International Trade Center, 1300 Pennsylvania Ave, NW Suite 5(~0, North Tower/Gray, Washington, DC 20004 ("SA..~P") and the City of Palo Alto, a chartered .municipal corporation of the State of California, with offices at 250 Hamilton Avenue, Palo Alto, CA 94301 ("Licensee.__~"). RECITAL WHEREAS, SAP desires to grant to Licensee, and Licensee desires to accept from.SAP, a license to Use (as defined herein) SAP’s proprietary Software (as defined herein) upon the terms and conditions hereinafter set forth; NOW, THEREFORE, SAP and Licensee agree as follows: 1:DEFINITIONS. 1.1 "Affiliate" means a corporation located in the Territory in which Licensee owns more than fifty percent (50%) Of the vot!r~g securities. Any su’ch.entity shall be considered an Affiliate for only such time as Licensee continUes to own such equity interest. 1.2 "Business Third Party" means any third party that requires access to the Software in connection with the operation of Licensee’s and/or its Affiliates’ business including, but not limited to, customers, distributors and suppliers. 1.3 "Correction Level" means a change in the Software between Versions made generally available to SAP Licensees [e.g., 3.1(.~)]. 1.4 "Desiqnated Unit".means each individual computer in which the Software and Third-Party Database are installed. 1.5 "Documentation." means SAP’s documentation in any medium, which is delivered t6 Licensee under th s Agreement, including SAP’s manuals, training materials, program listings, data models, flow charts, logic diagrams, functional specifications, instructions, and complete or partial copies of the foregoing. 1.6 "Extension" means an addition to the Software which does not require a Modification. 1.7 "Modification" meansa change to the Software which changes the source code, 1.8 "Named Users" means any combination of users licensed under this Agreement. 1.9 "N0n-Productive Use" means Use of the Software solely for Licensee’s or-an authorized Affi!iate’s internal training, teSting or developmental work. 1.10 "Productive Use" means Use of the Software solely to operate Licensee’s or an authorized Affiliate’s business. 1.11 "Program Concepts" means the concepts, techniques, ideas, and know-how embodied and expressed in’any computer programs or modules included in the Software including their structure, sequence, and organization. 1.12 "Proprietary Information" means: (i) with respect to SAP and SAP AG, the Software and Documentation and any complete or partial copies thereof, the Program ConceptS, Third-Party Database, any other third-patty software licensed with or as part of the Software, benchmark results; and (ii) information reasonably identifiable as the confidential and proprietary information of SAP or Licensee or their licensors excluding, any part of the SAP or Licensee Proprietary Information which: (a) is or becomes publicly available through no act or failure of the other party; or (b) was or isrightfully acquired by the other party from a source other than the disclosing party prior to receipt from the disclosing party; or (c) becomes independently available to the other party as a matter of right. 1.13 "Release" means each issuance of the Software, excluding third party software, identified by the numeral to the left of the decimal point (e.g.,_3.0). 1.14 "SAP AG" means SAP Aktiengesellschaft, the licensor of the SAP Proprietary Information to SAP, 1.15 "Software" means (i) all software specified in agreed upon Appendices hereto, developed by or for SAP and/or SAP AG and delivered to Licensee hereunder; Iii) any Releases, Versions, or Correction Levels of the Software as contemplated by this Agreement; and (iii) any complete or partial copies of any of the foregoing. 1.16 ’q’erritor~" means the United States of America. 1.17 "Third-Party Database" means third.party proprietary database software licensed through SAP to Licensee. 1.18 "Use" means to load execute, access, employ, utilize, store, or display the Software. 1.19 "Version" means each issuance of each Release of the Software, excluding third party software, identified by the numeral to the right of the decimal point (e.g., 3.1_). 2.LICENSE GRANT. 2.1 Grant of License. (a) Subject to this Agreement, SAP grants and Licensee accepts, a non-exclusive, perpetual (unless terminated in accordance with Section 5 herein) license to Use the Software, Documentation other SAP Proprietary Information and Third-Party Database provided by SAP to Licensee, at specified site(s) within the Territory for Productive and Non-Productive Uses. This license does not permit Licensee to: (i) Use the Software and Third- Party Database for a service bureau application; (ii) sublicense or rent the Software or Third-Party Database; or (iii) provide training to any third party except as specifically permitted hereunder. (b) Licensee agrees to install the Software and Third-Party Database only on Designated Unit(s), intranet server(s) or internet server(s) as identified by Licensee pursuant to this Agreement and which have been previously approved by SAP in writing or otherwise officially made known to the public as appropriate for~Use or interoperation with the Software and Third Party Database. Any individuals directly or indirectly accessing the Software on behalf of Licensee, its Affiliates or Business Third Parties must be licensed as Named Users. The maximum number of Named .Users (or other relevant metric) licensed to directly or indirectly access the Software, and/or Third Party Database, shall be specified in Appendices to this Agreement. Access by non-Named Users may be authorized provided the appropriate Software is licensed in Appendices hereto. Licensee shall promptly provide written notice to SAP if the number of Named Users or other relevant metric exceeds such maximum numbers. (c) Licensee may transfer the software and Third-Party Database from one Designated Unit to another at no additional license fee, and shall provide written notice to SAP within five business days of such installation. Licensee shall be responsible for the cost of any migration tools, Third-Party Database costs, third-party software or additional Software required for the new Designated Unit. The Software and Third-Party Database must be promptly deleted in their entirety from the Designated Unit no longer in Use and from each back-up copy for that Designated Unit. 2.2 Authorization of.Affiliates to Use the Software. Affiliates shall be authorized to Use the Software and Third-Party Database; ~ that: (i) each Affiliate shall first sign and deliver to SAP its agreement to be bound by the terms herein in the form of Exhibit A attached hereto; and (ii) such Use shall be subject to the following: (A) Licensee accepts responsibility for the acts or omissions of such Affiliate as if they were Licensee’s acts or omissions; (B) Licensee shall indemnify SAP against losses or damages.suffered by SAP arising from breach of this Agreement by any such Affiliate as if effected by Licensee; and (C) such Use shall not constitute an unauthorized exportation of any SAP Proprietary Information under U.S. Government laws and regulations. ¯ 2.3 Authorization of Business Third Parties to Access the Software. Business Third Parties may have access to the Software provided (i) each Business Third Party accessing the Software shall execute a confidentiality agreement pursuant to Section 6.2 herein; (ii) all individuals directly or indirectly accessing the Software on behalf of Business Third Parties shall be licensed as Named Users; (iii) Business Third Parties are expressly limited to screen access to the Software; (iv) in no circumstances may Business Third Parties have access, to Software source code; (v) in no c~rcumstances shall Business Third Parties Use the Software to operate or manage the business of such Business Third Parties (vi) such Use shall be subject to the following: (A) Licensee accepts responsibility for the acts or omissions of such Business Third Parties as if they were Licensee’s acts or omissions; (B) Licensee shall indemnify SAP against losses or damages suffered by SAP.arising from breach of this Agreement by any such Business Third Party as if effected by Licensee; and (C) such Use shall not constitute an unauthorized exportation of any SAP Proprietary Information under U.S. Government laws and regulations. 2.4 Audit Ri.qht. During normal business hours and at any time during which the Software, Documentation, Third-Party Database, or other SAP Preprietary Information are.being utilized, SAP, or its authorized representative or licensors, shal have the right upon reasonable advance notice to audit and inspect Licensee’s or any Affiliate’s utilization of such items, in order to verify compliance with the terms of this Agreement. (a) Upon SAP’s reasonable request, which shall not occur more than once annually, Licensee shall deliver to SAP a report, as defined by SAP, evidencing Licensee’s usage of the Software licensed under this Agreement. Should Licensee fail to produce such report within a reasonable period of time, SAP (or its authorized representative) reserves the right to access Licensee’s Software installation(s) to generate a usage report and Licensee shall pay SAP’s reasonable costs of generating such report. In the event an audit reveals Licensee’s non-compliance with the terms of the Agreement or if SAP has a good faith reason to believe that the usage report generated by Licensee is inaccurate, SAP shall be permitted to perform a re-audit notwithstanding the one audit per year limitation. (b) In the event an audit reveals that Licensee underpaid License and/or Maintenance Fees to SAP, Licensee shall pay such underpaid fees based on SAP’s list of prices and conditions n effect at the time of the audit. (c) If Proprietary Information is g~ven to Business Third Parties pursuant to this Agreement, Licensee shall secure the right for SAP to audit such Business Third Party as specified in this Section. Upon SAP’s reasonable request, Licensee shall deliver to SAP a report, as defined by SAP, evidencing Licensee’s Usage of the Sol\’ware licensed under this Agreement. (d) Licensee shall have the right, during normal business hours during the term of this Agreement and for three (3) yea~:s thereafter, upon 30 days prior notice, to audit SAP’s records pertaining to matters covered by this Agreement. SAP further agrees to maintain and retain such records for at I~ast three (3) years after the expiration or earlier termination of this Agreement. 2.5 Archival Copy; Restriction on Copies; Leqends to be Reproduced. Licensee may make one (1) copy of the Software for archival purposes and such number of backup copies of the Software as are consistent with Licensee’s normal periodic backu p procedures. Licensee shall maintain a log ofthe number and location of all originals and copies of the Software. Licensee may reproduce or copy any portion of the Documentation into machine- readable or pdnted form for its internal use and only as required to exercise its rights hereunder. Licensee shall include, and shall under no circumstances remove, SAP’s and its licensors’ copyright, trademark, service mark, and other proprietary notices on any complete or partial copies of the Software, Documentation, Third-Party Database, or SAP Proprietary Information in the same form and location as the notice appears on the originalwork. The inclusion of a copyright notice on any portion of the Software, Documentation, Third-Party Database, or SAP Proprietary Information shall not cause or be construed to cause it to be a published work. 2.6 License for Third-Party Database. The Software requires a third-party database which may be licensed through SAP or directly from a third- party database licensor approved by SAP. In the event Licensee obtains a license directly from a third-party database licensor, any restrictions imposed on Licensee directly by such third-party database licensor shall apply. SAP makes no representations or warranties as to the Third-Party Database or its operation. 3. DELIVERY. The licensed Software in machine-readable format, and the Documentation, shall be delivered as specified in Appendices hereto ("~"). Licensee shall be responsible for installation of the Software. 4.PRICE AND PAYMENT. 4.1 License Fees. In consideration of the license granted hereunder, Licensee shall pay to SAP license fees for the Software on such terms as set forth in Appendices hereto ("License Fees"). Fees for Maintenance ("Maintenance Fees") shall be paid as set forth in Appendices hereto. Fees for Professional Services ("Consulting Fees") shall be paid as set forth in the Professional Services Schedule hereto. SAP’s preferred method of receiving payment for all fees invoiced under this.Agreement are by ACH or wire transfer to the SAP account listed on the invoice. Any fees Licensee does not pay when due shall not accrue interest at the rate of 1% per month, but not to exceed the maximum amount as allowed by law. Licensee also agrees to pay SAP all reasonable costs and expenses of collection, including attorneys’ fees 4.2 Taxes. Fees and other charges described in this Agreement, or in SAP’s most recent List of Prices and Conditions, do not include federal, state or local sales, use, property, excise (directly and solely relating to this Agreement), service, or similar taxes ("Tax(es)") now or hereafter levied, all of which shall be for Licensee’s account. With respect to state/local sales tax, direct pay permits or a valid tax-exempt certificates must be provided to ¯ SAP prior to the execution of this Agreement. If SAP is required to pay Taxes (excepting taxes on SAP’s income), SAP shall invoice Licensee for such Taxes and Licensee agrees to be responsible for payment. Licensee shall have the right to protest such Taxes to the applicable taxing authority, in which case, SAP agrees to reasonably cooperate with Licensee in such protest. Licensee agrees to indemnify SAP for and hold it harmless from claims and/or actions brought by any taxing authority alleging non-payment of any tax that Licensee is obligated by this Agreement to pay, unless Licensee had actually made payment to SAP for any such tax obligation. 4.3 Non-Appropr at on.. This Agri~ement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code.. This Agreement will terminate without any penalty (i) at the end of any fiscal year in t~e event that funds are not appropriated for the following fiscal. year, or (b) at any time within a fiscal year in the event that funds are appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This Section 4 shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. .Regardless of the preceding provision, Licensee agrees to pay for all Software delivered in accord with the payment provision set forth herein and in all Appendices hereto and for Maintenance for Year I in accord with the provisions of Section 6 of the Maintenance Schedule and a I Appendices.hereto: 5.TERM AND TERMINATION. 5.1 Term. This Agreement and the license granted hereunder shall become effective as of the date first set forth above.and shall continue in effect thereafter unless terminated under Section 5.2. 5.2 Termination. This Agreement and the license granted hereunder shall terminate upon the earliest to occur of the following: (i) thirty (30)days after Licensee gives SAP written notice of Licensee’s desire to terminate this Agreement, for any reason other than a breach of this Agreement by SAP, but, .in any case, only after payment of all License and Maintenance Fees then due and owing; (ii) thirty (30) days after SAP gives Licensee notice of Licensee’s material breach of any provision of the Agreement (other than Licensee’s breach of its obligations under Sections 6 or 10, which breach shall result in immediate termin~ation), including more than thirty (30) days delinquency in Licensee’s payment of any money due hereunder, unless Licensee has cured such breach during such thirty (30) day period; (iii) immediately if Licensee files for bankruptcy, becomes insolvent, or makes an assignment for the benefit of creditors; or (v) thirty (30) days after Licensee gives notice to SAP of SAP’s material breach of its obligations under this Agreement. 5.3 Effect of Terminatio_.._ __ n_. Upon any termination of this Agreement: Sections 2.4, 4, 6, 7.3; 8, 9, 11.5, 11.6 and 11.7 shall survive such termination; Licensee’s rights under Section 2 shall immediately cease; and SAP and Licensee each shall promptly perform its obligations under Section 5.4. In the event of any termination hereunder, Licensee shall not be entitled to any refund-of any payments made by Licensee, except as may be determined in accord with Section 9.1.5.4 Duties Upon Termination. Upon any termination hereunder, Licens~ee and its authorized Affiliates shall immediately cease the Use of all SAP Proprietary Information and shall irretrievably delete and/or remove such items from all computer hardware and storage media. Within thirty (30) days after any termination, Licensee shall deliver to SAP at Licensee’s expense (adequately packaged and insured for safe delivery) or destroy all copies of the SAP Proprietary Information in .every form. Licensee agrees an officer of Licensee’s organization shall certify in writing to SAP ’that it and each of its authorized Affiliates has performed the foregoing. Within thirty (30) days after any termination, SAP shall return the Licensee Proprietary Information to. Licensee. 6.PROPRIETARY RIGHTS. 6.1 SAP Proprietary Information.(a) Licensee acknowledges that SAP has asserted and represented that ownership of and title in and to all intellectual property rights, including patent, trademark, service mark, copyright, and trade secret rights, in the SAP Proprietary Information are and shall remain in SAP and its licensors. Licensee acquires only the right to Use the SAP Proprietary Information and does not acquire.any ownership rights or title in or to the SAP Proprietary Information and that of SAP’s licensors. (b) Licensee shall not copy, translate, disassemble, or decompile, nor create or attempt to create, by reverse engineering or otherwise, the source code from the object code of the Software. In the event source code is provided to Licensee, SAP, in its s~)le discretion, reserves the right to delete, or to require the deletion of, such source code and all copies thereof in Licensee’s possession or control whenever a future Release, Version, or Correction Level provides for like functionality in an object code format. (c) Subject to Section 6.3(b), all Modifications and Extensions to the Software and Documentation shall be considered part ofthe Software and Documentation for purposes of this Section 6. 6.2 Protection of Proprietary Information. In order to protect the rights of SAP and its licensors and Licensee in:their respective Proprietary Information, SAP and Licensee agree to take all reasonable steps and the same protective precautions to protect the Proprietary Information from disclosure to third parties as with its own proprietary and confidential information, subject to the Public Records Act or other similar law. If a request is made under the Public Records Act or other similar law for information marked "confidential", "Trade Secret", or "Proprietary Information" or similarly labeled, Licensee will provide the entity who submitted the information with reasonable notice to allow the proposer to seek protectionfrom disclosure by a court of competent jurisdiction. Neither party shall, without the other party’s priorwritten consent,disclose, provide, or make available any of the Proprietary Information of the other party in any form to any person, except to its bona fide employees, officers, directors, or third parties whose access is necessary to enable such party, to exercise its rights hereunder. Each party agrees that prior.to disclosing any Proprietary Information of the other party to any third party, it will obtain from that third party a written acknowledgment that such third party will be bound by the same terms as specified in this Section 6 with respect to the Proprietary Information and naming SAP or Licensee, as the case may be; as a third party beneficiary. 6.3 Modifications and Extensions. (a) Licensee may make Modifications and Extensions to the Software, other than third party software, for Use on the Designated Unit(s) under the terms set forth in this section. Licensee shall register all Modifications to the Software with SAP prior to making such Modifications. Licensee agrees to insert in all copies of the Software as modified all copyright, trade secret, or other notices thereon or therein as SAP may from time to time direct. (b) In the event Licensee without SAP’s participation develops any Modification or Extension (hereinafter referred to as "Licensee Extension" or "Licensee Modification") to the Software, Licensee shall have all rights, title, and interest in such Licensee Modification or Licensee Extension subject to SAP’s rights in the Software. Licensee ag tees to offer SAP the first right to negotiate a license to or assignment of such Licensee Modification or Licensee Extension and the parties agree to negotiate such rights in good faith. Licensee agrees that prior tc SAP’s waiver of its first right to negotiate, such Licensee Modification or Licensee Extension will be used solely in connection with Licensee and its Affiliates’ business operations, and that such Licensee Modification or Licensee Extension will not be marketed, licensed or sublicensed, sold, assigned, or otherwise transferred or made available to any third party or other entity. (c) In .the event SAP develops either independently, or jointly with Licensee, any Modification or Extension to the licensed Sol~are, such Modification or Extension and all rights associated therewith will be the exclusive property of SAP and SAP AG, and Licensee will not grant, either expressly or impliedly, any rights, title, interest, or licenses to such Modifications or Extensions to any third party. Licensee shall be entitled to Use such Modifications and Extensions developed for or with Licensee on the Designated Unit(s) under the terms set forth in this Agreement. Licensee agrees to assign all dght, title and interest in and to jointly developed Modifications and Extensions to SAP. Licensee agrees to execute, acknowledge and deliver to SAP all documents .and do all things necessary, at SAP’s expense, to enable SAP to obtain and secure such Modifications or Extensions throughout the world: Licensee agrees to secure the necessary rig hts and obligations from relevant employees, or third parties in order to satisfy the above obligations. (d) The parties hereto agree that the granting of any rights, title, or interest to Licensee in any Modification or Extension shall not be construed by the parties hereto, any court of law or equity, or any arbitration panel to mean that SAP has granted or given up any rights, ,title, or interest in or to the SAP Proprietary Information. (e) Licensee agrees not to take any action that would limit SAP’s independent development, sale. assignment, licensing or use of its own Software or ModificatiOns or Extensions thereto; provided, however, that in the event that Licensee acts in a manner that inadvertently results in such limitation, SAP s’hall notify Licensee of the results of its action and give Licensee a reasonable amount of time to cure before exemising any rights of termination. 7.PERFORMANCE WARRANTY, 7.1 Warranty Period; Warranty. SAP warrants that the Software will substantially conform to the functional specifications contained in the Documentation and to those specifications designated by SAP as an "F" response in SAP’s Responses to Functional/Technical Requirements.dated December 18, 2001 and updated July 17, 2002 (attached hereto in its entirety as Exhibit C),for twelve (12) months following Delivery (the ’~ Period") when Used without material alteration on the Designated Unit(s). All specifications and responses in Exhibit C, other than those designated as "F" by SAP, have been included for the convenience of Licensee, are specifically excluded from the Warranty provisions of this Section 7, and are not otherwise legally binding on SAP. SAP’s warranty is subject to Licensee providing SAP necessary access, including remote .access, to the Software. Licensee shall provide SAP with sufficient test time and support on Licensee’s Designated Unit(s) to correct the defect. 7.2 Scope of Warranty. (a) The warranty set forth in this Section 7 shall not apply: (i) if the Software is not used in accordance with the Documentation; or (ii) to any Extensions or Modifications; or (iii) if the defect is caused by a Modification Or Extension, by Licensee, or a third-party software-malfunction,. (b) SAP does not warrant that the Software will operate uninterrupted or that it will be free from minor defects or errors which do not materially affect such performance or that the applications contained in the Software are designed to meet all of Licensee’s or its authorized Affiliates’ business requirements. 7.3 -Express Disclaimer. SAP AND ITS LICENSORS DISCLAIM ALL OTHER-WARRANTIES.EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FORA PARTICULAR PURPOSE EXCEPT TO THE EXTENT THAT ANY WARRANTIES IMPLIED BY LAW CANNOT BE VALIDLY WAIVED. 8.INDEMNIFICATION. 8.1 SAP Representation~ SAP represents that its licensors own the Proprietary Information licensed by SAP hereunder, including all intellectual property rights therein, and that SAP has all rights from its licensors .necessary to license, in accordance with the terms of this Agreement, such Proprietary Information to Licensee. 8.2 No Representation Reqardin.q Combination Use. SAP and its licensors make no.representation with respect to the possibility of infringement by Combination Use Of the Software. The parties agree that SAP has no duty to investigate nor to warn Licensee of any such possibility. "Combination Use" means Use of the Software in conjunction with any of the following, unless such Use is prescribed in the Documentation: (i) any software other than the Software; (ii) any apparatus other than a Designated Unit; and/or (iii) any activities of Licensee or its authorized Affiliates not licensed under this Agreement. 8.3 Indemnification of Licensee. Except for Combination Use, SAP Shall indemnify .Licensee against all claims, liabilities, and costs, including reasonable attorneys’ fees, reasonably incurred in the defense of any claim brought against Licensee in the Territory by third parties alleging that Licensee’s Use of the Software and Documentation infringes or misappropriates: (i) any United States patentof which SAP is aware; or (ii) a copyright; or (iii) trade secret rights, provided that, Licensee promptly notifies SAP in writing of any such claim and SAP is permitted.to control fully the defense and any settlement of such claim as long as such settlement shall not include a financial, obligation on Licensee. Licensee shall cooperate fully in the defense .of such claim and may appear, at its own expense, through counsel reasonably acceptable to SAP. SAP may, in its sole discretion, settle any such claim on abasis requiring SAP to substitute for the Software and Documentation alternative substantially equivalent non-infringing programs and supporting documentation. 8.4 Indemnification of SAP. Licensee shall indemnify sAP, and its licensors, against all third party claims, liabilities, and costs, including reasonable legal fees, reasonably incurred in the defense of any claim (other than for the infringement of intellectual property rights specified in Section 8.3 above), arising out of Licensee’s unauthorized Use of the Sol[ware, Documentation, Third-Party Database, and other SAP. Proprietary Information, licensed under this Agreement, ~ that, SAP promptly notifies Licensee in writing of such claim and that Licensee is permitted to control fully the defense and any settlement of the claim. 8.5 SAP’s Riqht to Commence infrinqement Actions. SAP alone shall be responsible for taking such actions which it determines are reasonably necessary or desirable in its sole discretion in.connection with any infringement or alleged infringement by a third party of any portion of the Software and Documentation. Licensee shall not undertake any action .in response to any infringement or alleged infringement of the Software and Documentation without the prior written consent of SAP, which consent shall not be unreasonably withheld. Licensee agrees to cooperate with and assist SAP by taking whatever action SAP determines .to be reasonably necessary or desirable. SAP agrees to-reimburse Licensee for reasonable legal fees and other expenses incurred in connection with any such claim, suit, damage, or loss. 8.6 SAP’s Duty to Indemnify Licensee. THE PROVISIONS OF THIS SECTION 8 STATE THE SOLE, EXCLUSIVE, AND ENTIRE LIABILITY OF SAP AND ITS LICENSORS TO LICENSEE, AND IS LICENSEE’S SOLE REMEDY WITH RESPECT TO THE INFRINGEMENT OF THIRD-PARTY INTELLECTUAL PROPERTY RIGHTS. 9.LIMITATIONS OF LIABILITY. 9.1 Licensee’s Remedies. Licensee’s sole and exclusive remedies for any damages or loss in any way connected with the Software furnished by SAP and its licensors, whether due to SAP’s negligence or breach of any Other duty, shall be, at SAP’s option: (i) to bring~the performance of the Software into substantial compliance with the functional specifications; (ii) m-performance of Services; or (iii) return of an appropriate portionof any payment made by Licensee with respect to the applicable portion of the Software or Services. SAP will make all commercially reasonable efforts to execute remedy (i) or (ii) before returning an appropriate portion of any fees as per.remedy (iii). SAP will make all commercially reasonable efforts to cure the breach in the above described manner in thirty (30) days. If SAP does not cure the breach within thirty (30) days then the Licensee may request return of license fees as per remedy (iii),or grant SAP an extension of time in agreement with SAP. 9.2 SAP Not Responsible. SAP wili not be responsible under.this Agreement for: (i) any alterationof the Software to fit the particular requirements of Licensee; or lii) the correction of any defects resulting from Modifications or Extensions or as a result of misuse of the Software by Licensee, other than if such Modifications or Extensions are developed by SAP in accord with Section 7.1 and 7.2; or (iii) preparation or conversion of data into the fbrm required for use with the Software or (iv) ensuring the security of Licensee’s networked installation of the Software. THE SOFTWARE IS NOT SPECIFICALLY DEVELOPED OR LICENSED HEREUNDER FOR USE IN ANY DIRECT AND ACTIVE OPERATIONS OF ANY EQUIPMENTIN ANY NUCLEAR, AVIATION, MASS TRANSIT, OR MEDICAL APPLICATIONS, OR IN ANY OTHER INHERENTLY DANGEROUS APPLICATIONS. THE PARTIES HERETO AGREE THAT USE OF THE SOFTWARE AND THIRD-PARTY SOFTWARE FOR FINANCIAL APPLICATION PURPOSES OR SUCH OTH ER ADMINISTRATIVE PURPOSES SHALL NOT BE DEEMED INHERENTLY DANGEROUS APPLICATIONS IF SUCH USE DOES NOT AFFECT THE OPERATIONS OR MAINTENANCE OF SUCH EQUIPMENT. SAP AND ITS LICENSORS SHALL NOT BE LIABLE FOR ANY CLAIMS OR DAMAGES ARISING Fi~OM INHERENTLY DANGEROUS USE OF THE SOFTWARE AND/OR THIRD-PARTY SOFTWARE LICENSED HEREUNDER. 9.3 Limitation of Liability., ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING, EXCEPT FOR DAMAGES RESULTING FROMUNAUTHORIZED USE OR DISCLOSURE OF THE PROPRIEATRY INFORMATION, UNDER NO CIRCUMSTANCES SHALL SAP ITS LICENSORS OR LICENSEE BE LIABLE TO EACH OTHER OR ANY OTHER PERSON OR ENTITY FORAN AMOUNT OF DAMAGES IN EXCESS OF THE PAID LICENSE FEES OR BE LIABLE IN ANY AMOUNT E’OR SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR INDIRECT DAMAGES, LOSS OF GOOD WILL OR BUSINESS PROFITS, WORK STOPPAGE, DATA LOSS, COMPUTER FAILURE OR MALFUNCTION, OR EXEMPLARY OR PUNITIVEDAMAGES. The provisions of the Agreement allocate the risks between SAP and Licensee. The License Fees reflect this allocation of risk and the limitations of liability herein. 9.4 Severability of Actions. IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT EACH AND EVERY PROVISION OF THIS AGREEMENTWHICH PRQVIDES FOR A LIMITATION OF LIABILITY, DISCLAIMER OF WARRANTIES, OR EXCLUSION OF DAMAGES IS INTENDED BY THE PARTIES TO BE SEVERABLE AND INDEPENDENT OF ANY OTHER PROVISION AND TO BE-ENFORCED AS SUCH. 10. ASSIGNMENT. Licensee may not, without SAP’s prior written consent, assign, delegate, pledge, or otherwise transfer this Agreement, or any. of its rig hts or obligations under this Agreement, or the SAP Proprietary Information, to any party (including any.Affiliate), whether voluntary or by operation of law, including bY way of sale of assets, merger or consolidation. Any permitted assignment of this Agreement shall provide that the .prov=sions of this Agreement shall continue in full force and effect and that Licensee shall guaranty the performance of its assignee and shall remain liable for all ob gat ons hereunder. SAP may aspign this Agreement only to SAP America, Inc. or SAP AG. This Agreement shall be binding upon and nure to the benefit of the parties hereto and their respective successors and permitted assigns. 11.GENERAL PROVISIONS.11.1 Rqhts to Injunctive. Relief. B6th parties acknowledge that remedies at- law may be inadequate to provide SAP or Licensee with full compensation in the event of Licensee’s material breach of Sections 2, 6, 10 or 11.5, or SAP’s material breach of Section 6 with respect to Licensee Proprietary Information, and that the non-breaching party shall therefore be entitled to seek injunctive relief in the event of any such material breach. 11.2 Severability. Itis the intent of the parties that in case any oneor more of the-provisions contained in this Agreement-shail be held to be invalid or unenforceable in any respect, such invalidity or unenforceability shall not affect the other provisions of this Agreement~ and this Agreement shall be construed as if such invalid or unenforceable provision had never been contained herein. 11.3 No Waiver. If either party should waive any breach of any provision of this Agreement, it shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision hereof. 11.4 Counterparts. This Agreement may be signed in two counterparts, each of which shall be deemed an original and which shall together constitute one Agreement. 11.5 Ex ortContral Notice. Regardless of any disclosure made by Licensee to SAP of an ultimate destination of the Software; Documentation, Third-Party Database, and other provided SAP Proprietary Information Licensee acknowledges that the Software, Documentation, Propi’ietary Information, and the Third-Party Database are being released or transferred to Licensee in the United States and are therefore subject to the U.S. export control laws. Licensee acknowledges its exclusive obligation to ensure that its exports from the United States are in compliance with the U.S. export control laws. Licensee shall als0 be responsible for complying with all applicable governmental regulations of any foreign countries with respect to the use of the Proprietary Information by its Affiliates outside of the United States. Licensee agrees that it will not submit the Software to anygovernment agency for licensing consideration or other regulatory approval without the prior written consent of SAP. Licensee shall defend, indemnify, and hold SAP and its licensors harmless fromand.against any and all claims, judgments, awards, and costs (including i’easonable legal fees) arising out of Licensee’s noncom pliance with applicable U.S. or foreign law with respect to the use or transfer of the SAP Proprietary Information outside the United States by Licensee and itsAffiliates. 11.6 Confidential :Terms and Conditions. Except as required under the Public Records Act o~ other applicable law, and subject to Section 6 of this Agreement, Licensee shall not disclose the terms and conditions of this Agreement and the pricing contained therein to any third-party. Neither party shall use the name of the other party in publicity, advertising, or similar activity, without the prior written consent of the other, except that Licensee hereby onsents to SAP’s inclusion of Licensee’s name in customer listings which may be published as part of SAP’s marketing efforts. SAP understands and ~acknowledges that the Agreement in its entirety (excepting Software, Documentation and any description of the Software’s functionality) will have been copied as a public document and attached to a public report that will have been discussed at a regular public meeting of Licensee’s City Council when it considered the Agreement for approval. 11.7 Governin.q Law. This Agreement shall be governedbyand construed under the State of California law without reference to its conflicts of law principles. In the event of any conflicts between foreign law, rules, and regulations, and United States of America law, rules, and regulations, United States of America law, rules, and regulations shall prevail and govern. The United Nations Convention on Contracts for the International Sale of Goods shall not apply to this agreement. 11.8 Notices. All notices or reports which are required or may be given pursuant to this Agreement shall be in writing and shall be deemed duly given when delivered to the respective executive offices of SAP and Licensee at the addresses first set forth above. 11.9 Force Maieure. Any delay or nonperformance of any provision of this Agreement caused by conditions beyond the reasonable control of the performing party shall not constitute a breach of this Agreement, and the time for performance of such provision, if any, shall be deemed to be extended for a period equal to the duration of the conditions preventing performance. 11.10 Escrow of Source Code. (~) SAP warrants that the source code for the Software, together with related Documentation as it is or becomes available, has been and shall remain deposited in an escrow account (the "Escrow Account") maintained at Data Securities International Inc. Burlington, MA (the "Escrow Agent"), pursuant to an agreement between the Escrow Agent and SAP, (the "Escrow Agreement").. Upon any termination of the Escrow Agreement, SAP shall enter into a substantially similar escrow arrangement with another party that is generally recognized in the industry as specializing in s0i~ware escrow services, naming Licensee as a Subscribed Licensee to the Escrow Account and providing Licensee at least the same rights and p~ivileges as those provided under this Section and the current Escrow Agreement. (b) SAP will in a timely manner deposit into the Escrow Account copies of the source code for Releases, Versions and correction Levels of the Software and related Documentation as they become generally available. (c) SAP or SAP’s trustee in bankruptcy shall authorize the Escrow Agent to make and release a copy of the applicable deposited materials to Licensee upon the occurrence of any of the following events: (i)The existence of any one or more of the following circumstances, uncorrected for more than thirty (30) days: entry of a~ order for relief under Title 11 of the United States Code; the making by SAP of a general assignment for the benefit of creditors; the appointment of a general receiver or trustee in bankruptcy of SAP’s business or property; or action by SAP under any state insolvency or similar law for the purpose of its bankruptcy, reorganization, or liquidation; unless within the specified thirty (30) day period, SAP (including its receiver or trustee in bankruptcy) provides to Licensee adequate assurances, reasonably acceptable to Licensee, of its continuing ability and willingness to fulfill its maintenance obligations under this Agreement; (ii) SAP has ceased its on-going business operations or that portion of its business operations relating to the sale, licensing and maintenance of the Software; or (iii). Failure of SAP to carry out the material maintenance obligations imposed on it pursuant to this Agreement after reasonable opportunity has been provided to SAP America, Inc. and SAP AG to perform such obligations. (d) In no event shall Licensee have the right to access the applicable deposited materials if SAP America, Inc. ’or SAP AG agrees to assume and promptly perform~ SAP’s maintenance~obligations under this Agreement. (e) In the event of release under this Section, Licensee agrees that it will treat and preserve the deposited materials as a.trade secret of SAP AG in accordance with the same precautions adopted by Licensee to safeguard its own trade-secrets against unauthorized use and disclosure and in all cases at least with a reasonable degree 0f care. Release under this provision shall notextend Licensee any greater rights or lesser obligations than are otherwise provided or imposed under this Agreement. This provision shall survive any termination of this Agreement. The Escrow Agreement shall be deemed to be an agreement supplementary to this Agreement for purposes of 11 U.S.C. §365(n)(1)(B). SAP shall be responsible for all costs associated with the Escrow Agreement. Within thirty (30) days after execution of this Agreement, SAP shall name Licensee as aSubscribed Licensee to the Escrow Account and shall provide Licensee written evidence of the same. 11.11 Non-Discrimination. As set forth in the Pal0 Alto Municipal Code, no discrimination.will be made in the employment.of any person under this Agreement because of the age, race, color, national origin, ancestry, religion, disability, sexual preference or gender of that person, SAP acknowledges that it has read and understands the provisions of Chapter 2.28 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Chapter 2.28 pertaining to nondiscrimination in employment, including completing the req uisite form furnished by CITY and set forth in Exhibit "B" to this Agreement. 11.12 Conflicts of Interest. (a) In accepting this Agreement, SAP covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. (b) SAP further covenants that, in the performance of this Agreement, it will not employ any contractor or person having Such-an interest. SAP certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. (c) If the Licensee Project Manager determines that any employee or contractor of SAP is a "Consultant" as that term is defined by.the Regulations of the Fair Political Practices Commission; that person shall be required to file the appropriate financial disclosure documents as required by the Palo AltoMunicipal Code and the Political Reform Act.. 11.13 Option Pricinq. For a period of three (3) years from the Effective Date of the Agreement, other public, educational and governmental institutions of the State of California may license Software by entering .into an appropriate Software End-User-License Agreement and applicable Appendices thereto with substantially similar terms and conditions as those set forth in the Agreement and this Appendix, at substantially similar discounts off of SAP’s then current list when based on similar quantities. 11.14 Cooperation with Implementation Vendor. SAP agrees to fully cooperate with Licensee’s implementation vendor (or any successor), hardware vendor, or other software vendor and/or contractors throug bout the implementation of the Software, and thereafter, to assist in the determination of the cause of any ~ssues related, to the Software and/or system as ’~mplemented. SAP agrees to be responsible, in accord with the Warranty and Maintenance provisions of this Agreement, for the resolution of issues as related to the Software licensed by SAP. Jol .17 02 03:48p THE Paper Clip 512 847 1085 JUL-i?-20~ ¯~ , -- .. .........~t. ~-~ a~ ~ch ~m ~ ~11 ~v~ o~ any a~al, APPROVED AS TO FORM: ASsis~a~u CiCy Manager Services ~nsur~nce K~view TaxpaYer zden~ifica¢ion No. t,. As of the effective Date, thi~ Agreement, Apl;~ndix 1 (mySAP.om), Appendix 2 (BBI), Appendix 8, (RWD), Appendix(IXOS), Extlibit A (Authorized Affiliate Agreement), Exhibit B (Cer~ifi~ati(m o! Non-Discrimination), Ext~ibit C (Responses to Funmlor~V1~hnical Requi~=ments) and Maintenance Schedule hereto con~tute the complete and exclusive statement of the agreement between SAP and Uoensee, and all previous representations, dL~Cussions, and ~tings am merged in, and superseded by, this Agreement. This Agreement may be modified only by writing signed by both p~uties. This Agreement and each Appendix hereto shall preva/I over any additional, conflicting, or’ inconsistent terms and conditions which may appear on any purchase order or other document furnished by Licensee to SAP. IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have duly executed this Agreement to become effe~ve as of ~e date first above written. ATTES T:CITY OF PALO ALTO City Clerk APPROVED AS TO FORM: City Attoz-ney APPROVED: Assistant City Manager Director of Adminlstrativ= Services Insurance Review Mayor SAP PUBLIC SERVICES, INC. Name: Amy Phelps Title: Vice President 8y Mary Beth Hanss Title: Vice President & Secretary Ta~xpayer Identification No. 54-1865804 (Compliance wi~h Co~-p, od~ ~ 313 i~ ~eq~£~ed if the entity on whose behal~ this contract is signed is a coz~oration. In nhe alternative, a certified coz~orate ~esolutio~ a~tes~ing ~o ~he signatory authority o~ the individuals signing in ~h~ir r~sp~ctive capacities is ( /mySAP,com Ucellse Ag~’eer~er~t (03-01C) JUL-I?-2002 18:2?610 355 2801 P.13/26 (Civil Code ~ 1189) STATE OF Pennsylvania ) COUNTY OF Delaware ) ) SS. On July 17, 2002, before me, the undersigned, a Notary Public in and for said County and State, personally appeared Mary Beth Hanss, personally known to me or proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is subscribed to the within instrument and acknowledged to me that she executed the same in her authorized capacity(ies), and that by her signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. mySAP.com Solutions Appendix Appendix 1 effective July 22, 2002 ("Appendix") to SAP PUBLIC SERVICES, INC. ("SAP") SOFTWARE END-USER LICENSE AGREEMENT effective July 22, 2002 ("Agreement") with CITY OF PALO ALTO ("Licensee") This Appendix is hereby annexed to and made a part of the Agreement specified above. In each instance in which provisions of this Appendix contradict or are inconsistent with the provisions of the Agreement, the provisions of this Appendix shall prevail and govern, and the contradicted or inconsistent provisions of the Agreement shall be deemed amended accordingly. 1.NAMED USER DEFINITIONS: 1.1 "Professional Users" is a Named User who performs operational related roles supported by the Software. The Professional User license includes those rights granted under an Employee User license. 1.2 1.3 "Limited Professional User" is a Named User who is an employee of Licensee, a licensed Affiliate, or Business Third Parties performing limited operational roles supported by the Software in one (1) of two (2) categories: 1)"Type 1 Limited Professional User" is a Limited Professional Userwith access limited to fulfilling managerial/approval roles across functionality for the purpose of processing workflow approvals, developing budgets, requisitions and reporting. 2) "Type 2.Limited Profession User" are Web Access Vendors who have a userid and password to access the system for the following purposes only: submission of a request, inquiry on own requests, and updating of own personal information. "Employee Users" is a Named User who performs all employee self-service related roles supported by the Software. Each Employee User may access the Software solely for such individual’s own purposes. LICENSE GRANT: The Software licensed to Licensee pursuant to this Appendix consists of the components identified below and specified as being licensed ("Software"). Provided Licensee does not exceed the number of Named Users or the metric level specified for the components identified below "Level", Named Users licensed hereunder are permitted to Use the Software in accordance with their respective Named User type. 2.1 mySAP.com Solution Suite: Number of Users Licensed: "X" if Licen Professional Type 1 Limited Type 2 Limited ~ se~d Professional Professional X mySAP.com Solution Suite 88 200 5,000 817 2.2 In order to assist SAP in providing and planning support and Maintenance, Licensee shall estimate the number of users, using the individual mySAP.com Solutions. For mySAP BI and mySAP Workplace, insert the number of users exclusively using these components. Licensee may change the allocation of such users at any time by providing written notice to SAP. Estimated Number of Users Limited Professional Professional EmploYee mySAP.com Solution Suite mySAP Customer Relationship Management (mySAP CRM) mySAP Supply Chain Management (mySAP SCM) mySAP E - Procurement mySAP Product Lifecycle Management (mySAP PLM) mySAP Human Resource Management (mySAP HR) mySAP Financials mySAP Business Intelligence (mySAP BI) mySAP Workplace Cross Industry Software Engines/Functionality/Users: Industry Software Engines or Functionality. "X" if Licensed mySAP CRM Except as stated, only licensed Named Users can access Cross Software En,qine/Functionality License Metric Sales/Service Order Processing Sales/Service Orders Per Year~’~ Customer Interaction Center Number of Installations Mobile Field Sales/Field Service Number of Mobile Field Sales/Field Service Users Licensed Level 0 0~ 0 SAP CONFIDENTIAL 2.3 2.4 2.5 2.6 2.7 2.8 X mySAP HR mySAP SCM mySAP E- Procurement mySAP Financials Internet Pricing Configurator (IPC) Payroll Processing Advanced Planning & Scheduling Transportation Optimization Purchase Order Processing Requisite Engine No Catalog Engine from SAP D&B for Accounts Payable D&B for Accounts Receivable Number of IPC Users Master Records Cost of Goods Sold Freight Costs Purchase Orders Per Year{’) The Requisite Catalog Engine can only be Used with the mySAP E - Procurement Software licensed hereunder None Number of Installations Number of Installations 0 0 (i)Required only in the event Sales, Service or Purchase orders (as the case may be) are entered into the Software by individuals that are not employees of Licensee, its Affiliates or employees of Business Third Parties. Each individual order against a master order (either sales, service or purchase) shall be considered a separate order. Includes both zero value and non-zero value orders. Industry Specific Software Engines/Functionality/Users: Only licensed Named Users can access Industry Specific Software Engines or Functionality. Public Services Industry: "X" if Licensed Licensed Industry Functionality License Metric Level X mySAP Public Sector IS - Public Sector All licensed Named Users are N/A authorized to Use this Software to the extent of their Named User type. SUPPLEMENTARY PRODUCTS: "X" if Licensed Licensed Product License Metric Level SAP iTutor Number of gAP iTutor Users 0 DATABASE (Select One): Database Inter[ace: X Database: COUNTRY/LANGUAGE VERSIONS LICENSED: Applicable country/language specific versions licensed by Licensee from SAP hereunder are as follows: "None" SAP licenses the Software for Use in countries for which there is currently r~o language or country specific functionality. Certain country/language specific functionality must be licensed directly from an SAP distributor located in that ceuntry as identified in SAP’s current List of Prices and Conditions. BUSINESS CONNECTOR: The mySAP.com Software licensed under item 2.1 above includes the right to Use the SAP Business Connector subject to the following conditions: (a) The standard version of the Business Connector may be downloaded by Licensee from SAP’s intranet, SAPNet. (b) Secure Version:~. ("x" if licensed) In the event Licensee has licensed the secure version of the Business Connector, Licensee acknowledges that (1) the product contains 128 byte encryption; and (2) cannot be exported outside of the United States without the prior approval of the United States Department of Commerce. Licensee can obtain the secure version of the Business Connector by contacting Licensee’s SAP contract administrator mySAP WORKPLACE: Currently Use of mySAP Workplace requires Internet Explorer 5.0. The "drag and relate" functionality provided with mySAP Workplace licensed pursuant to item 2.1 allows Licensee to access: (i) data within the Software; (ii) external data generally available on the World Wide Web; and (iii) other data outside of the Software, provided: (A) the data retrieved is presented through a web based technology; (B) the query is dependent on an SAP object, and (C) the. data presented does not contain any links that are drag & relate enabled themselves and cannot be used for launching a subsequent query. To make external data "drag and relate" enabled requires a separate license which may be.obtained from SAP for an additional fee or directly from a third party vendor. SAP CONFIDENTIAL 6o 8o SAP LICENSE FEE AND PAYMENT: The total Net Price License Fee to Licensee for the Software specified above for the total number of Named Users, Software Engines and Content is USD 438,568 which shall be invoiced upon delivery of the Software and is payable net thirty (30) days from date of invoice. Upon SAP’s reasonable request, Licensee shall deliver to SAP a report, as defined by SAP, evidencing Licensee’s Usage of the Software licensed under this Appendix. In the event Licensee’s Usage exceeds the .license granted under this Appendix Licensee agrees, within a reasonable period of time, to provide written notice to SAP, and SAP reserves the right to modify the Agreement to reflect such additional Use and invoice Licensee at SAP’s then current pricing in effect and increase Maintenance Fees accordingly. INSTALLATION: For Software to be installed on a specific Licensee or Affiliate Designated Unit within the Territory, Licensee shall provide SAP with written notice of the type/model and serial number and location of each Designated Unit and the number of Users allocated to each such Designated Unit prior to such installation. Such notice shall be in a form materially similar to Schedule 1 attached hereto and is to be sent to: SAP Contracts Department, Attention: Contract Manager, The Ronald Reagan Building, 1300.Pennsylvania Avenue, NW, Suite 500 / North Tower / Gray, Washington, DC 20004 DELIVERY: Delivery of the above-specified Software and Documentation is estimated to take place in July, 2002. Delivery of theSoftware will be to the following location: Palo Alto, California. Currently, software shipped to the following states will be subject to sales taxation: Arizona, Arkansas, Californial Colorado, Connecticut, District.of Columbia, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming. This listing is provided for information only. Licensee is responsible for obtaining its own tax advice. This list is subject to change without notice, MAINTENANCE FEE AND PAYMENT: Maintenance service offered by SAP is set forth in the Maintenance Schedule to the Agreement. Maintenance at the site(s) specified in the Maintenance Schedule to the Agreement shall commence as of the first day of the month following initial delivery of the Software. The Maintenance Fee for the Software licensed under this Appendi.x is priced as follows: Year 1: USD 74,557 (17% of Net License Fee of USD 438,568) Year 2: USD 74,557 (17% of Net License Fee of USD 438,568) Year 3: USD 74,557 (17% of Net License Fee of USD 438,568) Year 4: USD 74,557 (17% of Net. License Fee of USD 438,568) Year 5: USD 74,557 (17% of Net License Fee of USD 438,568) Years 6 through 10: Priced at t7% of the previous year Net License Fee base plus CPI + 5%, or a maximum total maintenance factor of 25%, whichever is less. Year 11 and beyond: Priced at the then-current SAP factor in effect. Other than as set forth above, commencing in Year 11, Maintenance Fees are subject to change once during a calendar year upon ninety (90) days notice to Licensee. Maintenance fees set forth above do not include federal, state or local taxes. Maintenance Fees are invoiced on an annual basis effective January 1 of a calendar year and are payable quarterly in arrears. Any Maintenance Fees due prior to January 1 are invoiced on a pro-rata basis for the given calendar year in effect. THIRD-PARTY DATABASE: The Software licensed hereunder requires a third party database product which has either been integrated or pre-installed as part of the Software, or which must be installed to Use the Software. Third party.database product functionality as integrated in the Software may differ from a non-integrated third party database product. Each third party database product is subject to its respective third party vendor License Agreement. This Agreement does not contain a license to use the inte.qrated third party database product. Licensee has no right to use and are not licensed to use the copy of the third party database until Licensee has executed the Agreement, this.Appendix and execute a third party database license agreement for the third party database. Upon request, Licensee shall provide to SAP the invoice number and/or license number and corresponding date for the third party database. SAP makes no representations or warranties as to the terms of any license or the operation of any third-party database obtained directly from a third party supplier by Licensee. Licensee is responsible for support and maintenance of the third-party database licensed from a third party supplier, and SAP has no responsibility in this regard. LICENSE KEY: Each Productive Use copy and Non-Productive Use copy of the Software licensed hereunder requires a license keycode. For each instaliation of the Software, eight (8) keycodes shall be provided; quantity one (1) for Productive Use of the Software; and quantity seven (7) for Non-Productive Use of the Software. The license keycodes will be issued by SAP AG within four (4) weeks from the date of installation of the Software on each Designated Unit. The required form to receive the license keycodes from SAP AG must be executed by Licensee and faxed to SAP AG within the four (4) week period following installation of the Software. The applicable form and fax number will be included in each installation kit provided to Licensee CONFIDENTIAL Jul 1’7 02 03:48p THE Paper Clip 512 B,~? 1085 3UL-I?’--2802 16:31 10. 11,OPTION,~L ,SO..,..I~"~NARII {Web.Aee~s~l: From eff~ ~ of ~is ~nd[x 1 through Ju~ 30, 2004 ~d pmv~ So.am ~ on th~ th~ ~ SAP p~t, ~n~ may I~ addit~ T~ 2 L~ P~d~gi~ U~ f0r $10,40 User, ~eNo ~ ~d Io~ ~r a~ ~i~ p.~ dates and ~I~ ~ ~m, if ~I~ble. ~en~ .~a~ ~y ~p~ndI~ t~ ~s A~e~t, 12.OPTIO~IAL SOFTWARE.’ U~nsee m~y lJoense addlIioqal I~lm~l Use~ and C~s I~USW So.are Engi~s Paym~ Pm~ssing Ma~r ReCeSs at a total ~ ~ 70% of a~ In a~o~ ~ the then ~ent SAP IJ~ p~e excluding Thl~ Pa~ Dative ~ ~t~ pm~ ao~, ~i~ ~ion e~es ~t~r ~t, ~. ~lnten~ Fees wig be ~¢rea6~ at th~ ~en~rrent t~tor ~ eff~l ~!~ W the ap~lcab~ net ~nse ~. Up~ w~n n~ ~m L~ee regaling I~ axe~sl~ of such ~t~, SAP ~U I~e an ~ ~ ~e Ag~t, 18. C~y At ~orn~, APPROVBD t ~.~li~.,~.~, The validity ef thls API~Ix will expire July 22° 2002. unless aooner execute~ by Licensee, or ~ended In writing by SAP. I0£z’ect:or of Title; VlC~ P~esi~en~ & this contract Is signed au~hO~iny o£ ~he ~UL-17-2002 18:29 610 355 2801 upon delivery of the Software, Li~ense¢~ that subsequently change Designated Units for Use of the licensed Software must be m-issued license keycedea for each respective copy of the licensed Sot[were. Failure of Licensee to obtain necessary license key~des for the licensed Software within four (4) weeks of installation of such Software, will cause the Software to have limited User access until such time as the license keycodes are issued, P_.U_BllD.,J]3~ In consideration of the dis~ount provided In item 3 of this Appendix, Ucensee agrees to provide telephone references for prospemlve SAP customers. Licenses also agrees to provide press testimonials, releases and announcements at SAP’s mquesL ,O, .P_~!QNAL SOFTWARE (Ulility): From effective date of this Appendix 1 through July 30, 2004 and provtdc"d the Software is on the then current SAP pdcelist, Ucensee may license the following bundled SAP Software for $95,160 net license fee; 80,000 consumption based oontra~ts using mySAP Utilities-Billing, 120,000 flat fee Gontracts using my’3AP Utilities.Billing and 30,000 contract aaoounts using mySAP Utilities.Invoicing & Contract Accounting, exclusive of associated fees for any third party database and third pa~ty software, ff applicable, Licensee can only exercise this option for the bundled SAP Software as stated above. Maintenance Fees will be increased at the then ~urrent favor In effect multiplied by the $95,160 net Ik~ense fee, 11._O_P_TLO_NAL_S~.~ARE...JWeb Access): From effective date of this Appendix 1 through July 30, 2004 and provided the Software is on the then current SAP p~elist, Licensee may license additional Type 2 Limited Professional Users for $10,40 per User, exclusive of associated fees for any third party database and third party software, If applicable. Licensee can only exercise this option in User blocks of 2,500, Maintenance Fees wil! be increased at the then current factor in effect multiplied by the applicable net license fee. Upon written notice f~om Licensee regarding its exemlsing of such option, SAP will issue an ¯ Appendix to the Agreement. 12. ¯ 13. OPTIONAL SOFTWARR: Licensee may license additional Named Users and Cross Industry Software Engines Payroll Processing Master Records at a tow discount of 70% of end In accord with the then current SAP list pdce excluding Third Party Database and third party soltware. This option expires October 31, 2003. Maintenance Fees will be increased at the then current factor in effect, muitlplled by the applicable net license fee. Upon wr’~en notice from Licensee regarding its exercising of SUCh option, SAP wll! issue an Appendix to the Agreement. VALIDI’P/ F PPER: The Validity of this Appendix will expire July 22, 2002, unless sooner executed by Licensee, or extended in writing by SAP, Accepted by:Accepted by: ATTEST.,CITY O~ PALO ALTO City Clerk APPROVED AS TO FORM: City Attorney APPROVED= Assistant City Manager Director of Administranive SerVices Insurance Review Mayor SAP PUBLIC S~,RVTC~.S, Name: Amy Phel~>~ Title: ViCe 54-1865804= (Compliance wi~h Corp. Code § 313 is ;equire~ ~£ the entity on whose behal£ ~hls contract is slgne~ is a COZlSora~ion. In ~he al~erna~ive, a ce;ti~ied corporate resolution a~Eesting ~o the slgnato~ authority of the individuals signing in ~heir respective capacltie~ is a¢ceptable) ~_______JAppendlx__mySAP.cOnl(O~01C) SAP CONFIDENTIAL 4 JUL-IT-2002 18:2T 610 355 2801 P.13/26 (Civil Code § 1189) STATE OF Pennsylvania ) COUNTY OF Delaware~) ) SS. On July 17, 2002, before me, the undersigned, a Notary Public in and for said County and State, personally appeared Mary Beth Hanss, personally known to me or proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is subscribed to the within instrument and acknowledged to me that she executed the same in her authorized capacity(ies), and that by her signature(s) on the instrument~the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Schedule 1 to Appendix I effective July 22, 2002 Software and User Allocation Name of Licensee or Affiliate where Designated Unit is located: Designated Unit(s) to be identified by Licensee to SAP in writing. Type/Model No.: Serial No.: Location of Designated Unit: Telephone Number: Software Delivery Contact Person: The total number of Users allocated to Use the Software, as per their respective rights set forth in the Agreement, at the above-specified location for the abo~/e-specified Designated Unit(s) are as follows: ~’~ Professional Users ~B2B Users Other User Types & Quantity ~ Limited Professional Users Mobile Sales Users ~_L7_ Employee Users ~ Mobile Service Users __. IS Oil Downstream Users Hardware Information Manufacturer Model Operatin9 System Manufacturer Release Database* Manufacturer Release * Note: When Database is licensed from the vendor directly, insert P.O. Number Date , Invoice Number and Optional software, Third-party software, applicable country versions, industry solution and/or business component Software, and any other software licensed from SAP, and quantities licensed to be installed at the above location are as follows: Name Date Title CiTY OF PALO ALTO (Licensee) (r3\eu_1999Vnysap.com~Appendices\Sch.edule 1 to mySAP Appendix-(12-99).doc) SAP CONFIDENTIAL 5 Business Software, Inc. ("BSI") Software Appendix 2 effective July 22, 2002 ("Appendix") to SAP PUBLIC SERVICES, INC. ("SAP") SOFTWARE END-USER LICENSE AGREEMENT effective July 22, 2002 ("Agreement") with CITY OF PALO ALTO ("Licensee") This Appendix is hereby annexed to and made a part of the Agreement specified above. The following Articles and Provisions of the Agreement are specifically incorporated herein by reference: 1 (Definitions), 2 (License Grant), 4 (Price and Payment), 5 (Term and Termination), 6.1 (SAP Proprietary Information), 6.2 (Protection of Proprietary Information), 7.3 (Express Disclaimer), 9 (Limitation of Liability), 10 (Assignment) and 11 (General Provisions). All other provisions of the Agreement are specifically excluded with respect to this Appendix. In each instance in which provisions of this Appendix contradict or are inconsistent with the incorporated provisions of the Agreement, the provisions of this Appendix shall prevail and govern, and the contradicted or inconsistent provisions of the Agreement shall be deemed amended accordingly. LICENSE GRANT: 1.1 Software licensed by Licensee from SAP hereunder is as follows: BSI SOFTVVARE PRODUCTS LICENSED: Master Records Licensed* U.S. Payroll Tax Processing 2,000 *Number of Master Records licensed cannot exceed the number of HR PA Master Records Licensed. 1.2 The BSI Software is licensed for Use in conjunction with the payroll functionality contained in the Software by appropriately licensed Users for the number of HR Master Records identified above. 1.3 DATABASE (Select One): Database Interface: X Database: LICENSE FEE AND PAYMENT: The total Net License Fee to Licensee for the BSI Software licensed in Item 1 above is USD 12,000 which shall be invoiced upon delivery of the software, and is payable net thirty (30) days from date of invoice. In the event Licensee exceeds the License Grant specified herein, and/or Licensee desires to expand the License Grant to additional Affiliates, divisions or business units not identified herein, Licensee agrees to provide written notification to SAP. SAP reserves the right to modify the Agreement to reflect such increase in the License Grant, recalculate the Net License Fee and Maintenance Fee accordingly and invoice Licensee for such increased license and maintenance fees, based on SAP’s then current pricing in effect. Upon SAP’s reasonable request, Licensee shall deliver to SAP a report, as defined by SAP, evidencing Licensee’s usage of the Software licensed under this Agreement. 3=INSTALLATION: For Software to be installed at a specific Licensee and/or Affiliate site within the Territory, Licensee shall provide SAP with written notice of the location of each computer and the number of Master Records, licensed in Item 1, allocated to each such device within six{y (60) days of the use of such device. Such notice shall be in a form materially similar to Schedule 1 attached to Appendix 1, and is to be sent to: SAP Contract Department, Attention Contract Director, The Ronald Reagan Building, 1300 Pennsylvania Avenue, NW, Suite 500 / North Tower / Gray, Washington, DC 20004. Licensee shall be responsible for installation of the BSI Software. DELIVERY: Initial delivery of the above-specified BSI Software is estimated to take place in July 2002. Operating System Version Database System Version Initial delivery of the above specified Software will be to the following location: Palo Alto, California Currently, software shipped to the following states will be subject to sales taxation: Arizona, Arkansas, .California, Colorado, Connecticut, District of Columbia, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana; Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma,-Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming. This listing is provided for information only. Licensee is responsible for obtaining its own tax advice. This list is subject to change without notice. SAP CONFIDENTIAL Jul ~nte~ ~ (~aintenance3 w~ ~p~ to the BSI ~. and ve~s of the ~ S~am made av~l~e ~ ~, ~p~ v~ telephone, cabin.on of daft& co~tlon ~ B~I, and 3AP’S onflno ~a~ ~e~l~, Malnle~e, ~ ~AP, f~r ~e B~l ~a~ li~n~d ~rounder b limit~ to ~ sites~ly id~t~ed In t~ ~ment a~ ~at~ ~pendi~. In 0~sr 5,2 Maintenance at such site(s) sh~! c~mmence upon the flr~ day of ~ m~th f~ng lni~al Oeli~ of the B~) So.are. MaInt~ F~s for ~ ~m I~e~d under ~ ~pe~t~ fO~ ~ t~J nu~ ~f Use~ ~ll~ ~ is USD 4,200 (~% of U~ 12,~0) ~r y~r. ~ ~n~n~n¢~ Fees ~m ~bj~ tO ~e U~ nl~ (90) da~~int~a ~es ~t ~ ~ ~ not In~ude ~e~, s~ or 1~ ~es. M~o Fees are inked Ihe 91v~ taler y~r In ~t. 8.3 in the event Ucen~e el~ eot to ~n~ M~t~r~-,e u~ ~ first ~y ot ~e ~ f~low(~ initial deli~ of.the ~1 ~ L~en6~ ~ a~ed ~(~enance Fe~ ass~ia~d ~ such ~me ~d plus ¯ mJns~ment fee. J~T~,~I~~; ill no ev~t ~hal! ~’~P’¢ ~I Ik~bS~’ ~r dem~g~ of ~’~y k~d or nature ~n any way ~dslng f,~n ~rrela~d m the BSI S~em licensed hereunder e~-’eed an amount equal to the Nel U~ense Fee idenl~fl~d ~ Item 2 hereof. ’~IIRD..~ARW The Software Ik:ensed he~r requires a ~1~ ~ daises ~du~ ~lch h~ ~er ~en integmt~ or pre-ln~lled the SO~ may diff~ from a non~nt~ thi~ pa~ d~se p~t, E~ Ih{~ pa~ ~e p~u~t Is sub~t to its ~. ~en~ ~s no r~hl tO u~ ~ i~ nd Iloon~ to u~ I~ copy ~ ~ ~i~ pady dabble until U~e h~ O~ I~ A~m~t, this A~x ~d ~ a ~lrd pa~ ~ba~ ~e a~nt ~ the lhl~ pa~ de, base. U~ R~est, L~ensee ~11 ~e m SAP ~ In~ number an~m I~n~ nU~r ~nd o~l~ ~e ~ thepe~ 8. W) W&W)9 bY SAP. The v~lty of this Appendix wlH e~lre duly L~. L>O02, unte~ ~oener exe~u~e4 by Ueen~, o~ ex~e~l~ Vice President ~ ~ec=et;sP,~ JUL-l?-2002 18=38 618 355 2881 P.20/26 MAINTENANP.~. FEE AND PAYMENT: 5.1 To the degree BSI makes such services generally available to .RAP, Ucensee may request and SAP shall provide maintenance service ("Maintenance") with respect to the BSI Software. Maintenance currently includes the delivery of releases and vemions of the B~I Software made available to SAP, support via telephone, coordination of defe~t oorrection with BSI, and SAP’s O~line $oftwar~ Services. Maintenance, from SAP, for the BSI Software licensed hereunder is limited to the sites previously identified in the Agreement and related Appendices, In order tc receive Maintenance hereunder, Licensee must make all required remote support connections to each Designated Unit, at its expense, as requested by SAP. 5.2 Maintenance st such site(s) shall commenoo upon the first day of the month following initial Delivery of the BSI Software. Maintenance F~es for the $Of~Nam licensed under this Appendix, for the total number of Users specified above is USD 4,200 (35% of USD 12,000) par year. Maintenance Fees are subject to change upon ninety (gO) days notice to Licensee. Maintenance fees set forth above do not i~lude federal, state or Iooal taxes, Maintenance Fees are invoiced on an annual basis effective January 1 of a calendar year, Any Maintenance Fees due prior to January 1 am Invol~,ed on a p~’o=rata basis for the given calendar year in effect. 5,3 In the event Licensee elects not to commence Maintenance upon the first day of the month following initial delivery of the BSI Software, or Maintenance Is othe,wtse declined for some period of time, and Is subsequently requested or reinstated, SAP will invoice Licensee the accrued Maintenance Fees associated ~ such time period plus a reinstatement fee. LIMITATION OF UABILITY; In no event shall SAP’s total liability for damages of any kind or nature in any way adsing from or related to the BSI Software licensed hereunder exceed an amount equal to the Net License Fee identified in Item 2 hereof. The Software licensed hereunder requires a third party database product which has either been integrated or preolnstalled as part of the Software, or which must be installed to Use the Software, Third party database product functionality as integrated in the Software may differ from a non-integrated third party database product, Each third party database product is subject to its respec~ve third pa~, vendor Ucense Agreement. This Agreement does.,t!ot contain a license to use the third omlv d~mbase product.. Licensee has no right to use and is not licensed to use the copy of the third pady database until Licensee has executed the Agreement, this Appendix and execute a third party database Iloense agreement for the third party database. Upon request, Licensee shall provide to SAP the invoice number and/or license number and corresponding date for the thirdparty database. SAP makes no representations or warranties as to the terms of any license or the operation of any third-party database obtained directly from a thiKI party supplier by Licensee. Licensee is responsible for support and malntenance of the third-paW database licensed from a third party supplier, and SAP has no responsibility in this regard. Notwithstanding anything herein to the contrary, SAP may assign the BSI Software license granted herein, including maintenance, to BSI upon written notice to Licensee. In the event of such assignment, should Licensee desire Maintenance, Licensee should negotiate a separate service agreement direly with B$1. F FFER= The validitY of this Appendix will expire July 22, 2002, unless sooner executed by Ucensee, or extended in wdting by SAP. ACcepted by:Accepted by: ATTEST:CITY OF PALO ALTO Ciny Clerk APPROVED AS TO FORM: City AEtOrney APPROVED: Assls~an¢ City Manage~ Director of A~minisura¢ive Services Xns~xance Review SAP CONFIDENTIAL Mayor SAP PUBLIC SERVICES, ZNC, Name = Amy Phelps Title= Vice Presldeng Taxpayer Identi~i¢at£on No. __,54-1865804 (Compliance wi~h corp. code § 313 i= ~e~ui~ed I£ the en~i~y on whose behalf this contract i= si~ned is a corporation. Zn ~he ~Iternatlve, a ce~ti£1ed corporate ~lunion a~es~ing to the slgna~ory autho=ity of ~he indlviduals signing in acceptable} JUL-17-2002 18:27 610 355 2801 P.13/26 (Civil Code § 1189) STATE OF Pennsylvania ) COUNTY OF Delaware ) ) SS. On July 17, 2002, before me, the undersigned, a Notary Public in and for said county and State, personally appeared Mary Beth Hanss, personally known to me or proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is subscribed to the within instrument and acknowledged to me that she executed the same in her authorized capaclty(ies), and that by her signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Appendix 3 effective July 22,. 2002 ("Appendix") to SAP PUBLIC SERVICES, INC. SOFTWARE END-USER LICENSE AGREEMENT effective July 22, 2002 ("Agreement") with CITY OF PALO ALTO ("Licensee") This Appendix is hereby annexed to and made a part of the Agreement specified above. The following Articles and Provisions of the Agreement are specifically incorporated herein by reference: 1, 2, 4, 5, 6.1-6.2, 7.3, 9, 10 and 11. All other provisions of the Agreement are specifically excluded with respect to this Appendix. In each instance in which provisions of this Appendix contradict or are inconsistent with the incorporated provisions of the Agreement, the provisions of this Appendix shall prevail and govern, and the contradicted or inconsistent provisions of the Agreement shall be deemed amended accordingly. 1.LICENSE GRANT: Software licensed by Licensee from SAP hereunder is as follows: RWD SOFTWARE PRODUCTS LICENSED: NUMBER of LICENSED SAP USERS RWD Info Pak Bundled Package RWD Info Pak Publisher / Glossary RWD Info Pak Web Architect RWD Info Pak Launchpad 400 Notwithstanding anything to the contrary regarding the definition of Territory in the Agreement, Licensee must only Use the RWD software licensed herein in the United States. Upon SAP’s reasonable request, Licensee shall deliver to SAP a report, as defined by SAP, evidencing Licensee’s usage of the RWD software licensed under this Agreement. 2.LICENSE FEE AND PAYMENT: The Net License Fee to Licensee for the RWD software licensed in Item 1 above is USD 34,000 which shall be invoiced upon Delivery of the software and is payable net thirty (30) days thereafter. 3,INSTALLATION: For the RWD software to be installed at a specific Licensee and/or Affiliate site within the Territory, Licensee shall provide SAP with written notice of the location of each computer and the number of Users, licensed in Item 1, allocated to each such device within sixty (60) days of the use of such device. Such notice shall be in a form materially similar to Schedule 1 attached hereto and is to be sent to: SAP Contract Department, Attention Contract Manager, The Ronald Reagan Building, International Trade Center, 1300 Pennsylvania Ave., NW, Suite 500/North Tower/Gray, Washington, DC 20004. Licensee shall be responsible for installation. DELIVERY: Initial delivery of the above-specified RWD software is estimated to take place in July 2002. Initial delivery of the above specified Software will be to the following location: Palo Alto, California Currently, software shipped to the following states will be subject to sales taxation: Arizona, Arkansas, California, Colorado, Connecticut, District of Columbia, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming. This listing is provided for information only. Licensee is responsible for obtaining its own tax advice. This list is subject to change without notice. MAINTENANCE FEE AND PAYMENT: 5.1 To the degree RWD makes such maintenance services generally available to SAP, Licensee may request and SAP shall provide maintenance service ("Maintenance") with respect to the RWD software, so long as Licensee is SAP" CONFIDENTIAL THE Paper Glip 512 84? 1085 Onl~e ~m ~, Ma~te~fl~. f~ S~, ~ (he RWD ~ li~nssd ~sr ~ I~lt~d to ~e ~e Agr~m~t, U~ee a~owls~s RWO s st~a~ houm m ma~te~nc~ Se~l~ am Moray m~ r~y, imm~m~ ~or ~emto, A~+ a ~w ml~se be~m~ ~mm~al~ ~vatlame, HWU ~, pm~oe mat~nan~ ¯ ~h ~P ~ly ~r ~ch n~ mle~ ~+ UnUI a ~ ~ml~ ~ ~s new m~ b+ ~b~. ~ the Imte~ Ucsn,~e shall spp~nl no morn ~han 5 {nd~dua~s who am ~e~geable in the 0~1~ ~f ~ RWO s~ humor o; KW Use~ ~ll bs s~l~ in 8~h~u~ ! ~ thb A~ndix. Aft of ~ens~’s sup~ ~lde~ ~1 be inl~m~d ~ely ~m~h t~e Key Usem. L~enss~ ~I h~ ~e ~t to a~nl ~e ~v~uals to ~e am Key useB p~ ~ ~m~ ~ t~ ~W ~d~B and ~e i~l~ ~g subst~d ~ ~ni~t~ ~o SAP in the L~e a~ SAP, 5.2 M~ntenance at +u~h Unitad 9tat~o ~ito(+) +ha!! ~ce Upon D~ivew 0l the RWD Fe~ for ~a S~ !1~ u~r ~s A~im, for ~ total ~m~r of U~m ~tfied ~bo~ Is USD 5.780 0er yoar. ~ !~lu~ fe~ral, o~ or ~al 5.3 In the event Lk~e~ elects not to ommor~e Maintsmm~ ~ ~ fi~+l day of ~ month ~lng inil~ do~ ~ ~e RWD so.am, or Mat~+a I~ ~hemi~ da¢ined ~r s~ ~ of ~me, a~ I~ su~uemly r~ or ~nmt~, SAP wMl ~v~O llcen~ ~ aco~ ~nan~ ~e ~ as~lat~ web ~ch ~e ~dod p~s a rei~t~t le+. In no event ~hall SAPs total liability for damages of ~ny kind or nature In m~/way arising from or re.la1~l 1o ih~ RWDso~wam Ilce~l hereunder ~xc~K~ mn ~mount ~qua~ to ~Is N~t Ucen~e Fe~ k~entified in Item 2 h~mof, The v~dlly ~4 ~h~ Rp~nO;~ ~ exl~m ~Uly ~, ~002, unless ~oonar ex~:ut~l by Ucen$~, or JUL-IT-2002 18:31 610 355 2801 P.23/2G subsoribing for and paying for Maintenance. Maintenance currently includes the delivery of releases and versions of the RWD software made available to SAP, support via telephone, coordination of defect correction with RWD, and SAP’s Online Software Services, Maintenance, from SAP, for the RWD software licensed he~eunder is limited to the United States sites previously identified in the Agreement and related Appendices. Notwithstanding anything to the contrary In the Agreement, Licensee a~knowledges RWD’s standard hours of malntenan~e sauce are Monday through Friday, 8:30 a.m. to 5:30 p.m,, eastern standard time, except for holidays as observed by RWD; further, Li~nsee acknowledges that for each release, RWD will offer maintenance services through SAP only for the most recent version and the version immediately prior thereto. After a new release becomes ~ommeroially available. RWD will provide malntenanoe ~rvices through SAP only for such new release and, unt~! a new version of the new release beoomes available, for the latest version of the prior release. In order to receive Maintenance hereunder, Licensee must make all required remote support connections to each Designated Unit, at Its expense, as requested by SAP, Ucensee shall appoint no more than 5 individuals who are knowledgeable in the opem~ion of the RWD So, ware to serve as primary contacts in the event that Ucensee needs to ~onta~ RWD for support. The identit’,mtion and number of Key Users will be sp~ified in Schedule 1 to thls Appendix. All of Lbensea’s support Inquiries shall be initiated solely through these Key Users, Ucensee shall have the right to appoint substitute individuals to serve as Key Users provided the names of the new individuals and the individuals being substituted are communicated to SAP in writing. Licensee shall have the right to appoint additional Individuals to sews as Key Users upon mutual agreement of the Licensee and SAP. 5.2 Maintenance at such United States site(s) shall ~ommence upon Delivery of the RWD sottware. Maintenance Fees for the Software licensed under this Appendix, for the total number of Users specified above is USD 5,780 per year. Maintenance fees are subject to change upon ninety (90) days notice to Ucensee. Maintenance fees set forth above do not include federal, state or local taxes. 5,3 In the event Licensee elects not to commence Maintenance upon the first day of the month following initial delivery of the RWD ~oftware, or Maintenance is otherwise declined for some period of time, and is subs~quently requested or reinstated= SAP will invoice Licenses the accrued maintenance service fees associated with such time period plus = reinstatement fee. 6.~ ! [] LITY; In no event shall SAP’s total liabilitY for damages of any kind or nature In any way arising from or related to the RWD software licensed hereunder exceed an amount equal to the Net Ucense Fee identified in Item 2 hereof. L~.~L~_~._O_F~,B; The validity of this Appendix will expire July 22, 2002, unless sooner executed by Ucensee, or extended in wdting by SAP; Acceptod by:Accepted by:. ATTEST:C!T~r O~ P~0 A~TO city Clerk APPROVF=D AS TO FORM= City An~orney APPROVED: Assistant CitMManager Director of A~minisura~ive Services Insurance Review Mayor SAP PUBLIC SERVICES, INC. Name = Amy ~helps ¯ i~i~b, ~ice ~res~^~ ^ Title: Vice P~esldent & Secre~ T~a~r Identification No. __,54-1865804 JUL-17-2002 18:27 GIO 355 2801 (Civil Code § 1189) STATE OF Pennsylvania ) COUNTY OF Delaware ) ) SS. On July 17, 2002, before me, the undersigned, a Notary Public in and for said County and State, personally appeared Mary Beth Hanss, personally known to me or proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is subscribed to the within instrument and acknowledged to me that she executed the same in her authorized capaclty(ies), and that by her signature(s) on.the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. acceptable ) Schedule 1 to Appendix 3 effective July 22, 2002 Software and User Allocation Contact Data Licensee: *Shipping Address: City/State/Zip: Tax Contact Name: Tax ’Contact Phone Number:Tax Contact Fax Number: Tax Contact E-Mail Address:No. of Users Licensed: Key User Names: * Shipping address must be a street address, PO Box is not sufficient. Platform Data Licensee has reviewed the RWD documentation and technical specifications documents and acknowledges Licensee’s system is in compliance with the RWD documentation and technical specifications. Please also indicate your current R/3 Release (including SAP GUI version) and any upgrade plans. Current R/3 Release and SAP GUI ~ R/3 Upgrade/Date: (Optional) version: Name Date Title Company (Licensee) Note : SAP Contract Administrators - contact infopak@rwd.com (with RWD) once Licensee orders the RWD software. Appendix 4 effective July 22, 2002 ("Appendix") to SAP PUBLIC SERVICES, INC. SOFTWARE END-USER LICENSE AGREEMENT effective July 22, 2002 ("Agreement") with CITY OF PALO ALTO ("Licensee") IXOS SOFTWARE This Appendix is hereby annexed to and made a part of the Agreement specified above. The following Articles and Provisions of the Agreement are specifically incorporated herein by reference: 1, 2, 4, 5, 6.1-6.2, 7.3, 9, 10 and 11o All other provisions of the Agreement are specifically excluded with respect to this Appendix. In each instance in which provisions of this Appendix contradict or are inconsistent with the incorporated provisions of the Agreement, the provisions of this Appendix shall prevail and govern, and the contradicted or inconsistent provisions of the Agreement shall be deemed amended accordingly. 1.LICENSE GRANT: 1.1 Software licensed by Licensee from SAP hereunder is as follows: IXOS SOFTWARE PRODUCTS "X" if LICENSED: IXOS Archive/as Archive Server IXOS Archive/sc Scanning (includes Fax Interface)* IXOS Doculink/Data Archive Plus* IXOS Exchange Link IXOS Notes Link x X X x X *Can only be licensed if IXOS Archive/as Archive Server is licensed herein or has been previously licensed. 1.2 The IXOS Software Product set forth above is licensed for use by the Users licensed pursuant to Appendices to the Agreement as of the issued date of this Appendix. The licensed Software and Documentation shall be delivered in the English language. The Territory shall be the United States and other countries as mutually agreed to by the parties. Upon SAP’s reasonable request, Eicensee shall deliver to SAP a report, as defined by SAP, evidencing Licensee’s usage of the Software licensed under this Appendix. 2=LICENSE FEE AND PAYMENT: 2.1 The total Net Price License Fee to Licensee for the IXOS Software licensed in item 1 above is USD 87,713 which shall be invoiced upon delivery ofthe software and is payable net 30 days thereafter. 2.2 In the event additional Users or Software is licensed from SAP, additional license fees and/or Maintenance Service fees will be assessed for Use of the IXOS Software Products. INSTALLATION: For Software to be installed on a specific Licensee or Affiliate Designated Unit within the Territory, Licensee shall provide SAP with written notice of the type/model and serial number and location of each Designated Unit and the number of Users allocated to each such Designated Unit prior to such installation. Such notice shall be in a form materially similar to Schedule 1 attached hereto and is to be sent to: SAP Contract Department, Attention Contract Manager, The Ronald Reagan Building, International Trade Center, 1300 Pennsylvania Avenue, NW, Suite 500 / North Tower/Gray, Washington, DC 20004. pELIVERY.: Initial delivery of the above-IXOS Software is estimated to take place in July, 2002. Initial delivery of the Software will be to the following location: Palo Alto, California. Currently, software shipped to the following states will be subject to sales taxation: Arizona, Arkansas, California, Colorado, Connecticut, District of Columbia, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming. This listing is provided for information only. Licensee is responsible for obtaining its own tax advice. This list is subject to change without notice. MAINTENANCE: In the event Licensee desires Maintenance with respect to IXOS Software licensed herein, Licensee must execute a separate service agreement directly with IXOS Software, Inc. SAP CONFIDENTIAL 17 0;’ 03:50p THE Paper’ Clip 512 847 1085 JUL- 17-2BB2 16;3;2 So.are, I~. 8, ~: ~ v~W ~ this ~ ~!1 e~ July ~, 2~ unless s~r e~ ~ L~S~, in writing by SAP, APPROVe: insurance Review [Co~lianCe w~h CO=l;}, Code ~ 313red,red Lf the en¢i~ on whose behal~ the ~Ite=nati~, ~ ~e~ti£ie~~eeol~lon at~eeCin~ to the ~u~hori~ o£ ~he i~ivi~Is ai~ing SAP CONFIDENTIAL TOTPJ- P. 0’7 JUL-1T-2082 18:32 610 355 2801 P.26/26 LIMITATION OF LIABILITY_; In no event shall SAP’s total liability for damages of any kind or nature in any way arising from or related to the IXO$ Software !i~ensed hereunder exoeed an amount equal to the Net License F~ identified in Item 2 hereof. ASSIGNMENT.; For a period of ninety (90) days from the Effective Date of this Appendix, SAP may not assign its responsibilities or obligations hereunder;, thereafter, SAP may, without the consent of Licensee, assign this Appendix to IXOS Software, Ino, ~~,.~,.~: The validity of this Appendix will expire July 22.2002. unless sooner executed by Ucensse, or extended in wdtlng by SAP. city Clerk APPR0VEDAS TO FORM= City A~torney APPROVED: Assistant City Manage; DireCtOr of A~mlnistrative Services In~uranc~ R@vi~w Mayer SAP PUBLIC SERVICES, Name: AmM Title: vice Name; Mary Beth Hanse Title: Vice P~es£den~ & Secretary Taxpayer ~denti£ication NO. __.54=1865804 (compliance wi~h Cozlo. Code S 313 is re~ul;ed i~ the entity on whose behalf this conUracn is signed is a orporation. In nh~ alnornauive, a certified corporate resolution attesting Co ~he si~ato~ authori~ o~ the individuals si~i~ inUheir respective c~cities is acc~pn~le) (h;wtnword~R-3\eu_1999V,~ayg~lxos AppendiX-(05-99),doa) SAP CONFIDENTIAL TOTRL P.26 JUL-l?-2002 18=27 610 355 2801 P.13/26 (Civil Code § 1189) STATE OF Pennsylvania ) COUNTY OF Delaware ) ) On July 17, 2002, before me, the undersigned, a Notary Public in and for said County and State, personally appeared Mary Beth Hanss, personally known to me or proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is subscribed to the within instrument and acknowledged to me that she executed the same in her authorized capacity(ies), and that by her signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. EXHIBIT A to SAP PUBLIC SERVICES, INC. ("SAP") SOFTWARE END-USER LICENSE AGREEMENTeffective July 22, 2002 ("Agreement") With the CITY OF PALO ALTO ("Licensee") AUTHORIZED AFFILIATE AGREEMENT This Authorized Affiliate Agreement is made effective as of the ~ day of Delaware Corporation, with offices at 1300 Pennsylvania Ave, NW Suite 500, a offices at ., 2002 between SAP Public Services, Inc., a Washington,DC 20004 ("SAP") and corporation, with ("Affiliate"). Affiliate is entitled to have Named Users access the Software on the Designated Unit(s) identified in the SAP Public Services, Inc./ . Software End-User License Agreement ("Agreement"), subject to the restrictions on the aggregate number of Named Users specified therein. Affiliate agrees to be bound by all of the terms and conditions of the Agreement and agrees that SAP may directly enforce all such terms and conditions against Affiliate as if Affiliate had executed such Agreement with SAP. Notwithstanding any other agreements to the contrary, Affiliate agrees that its right to Use SAP Software and receive Maintenance services shall be governed solely by this Agreement. In the event that the Agreement is terminated for any reason, or if Affiliate ceases to meet the definition of "Affiliate" therein, Affiliate agrees that all of its rights to access the Software will cease effective as of the termination date unless such Affili~ate executes a standard SAP End-User Software License for the SAP licensed Software at SAP’s then current license fees. 3.Software and the number of Named Users licensed under the Agreement by Licensee and allocated to Affiliate hereunder is as follows: "l’vpe of Number of Quantit~Named User Named Users Software Licensed 4.Affiliate represents and warrants that it has the legal capacity to execute this Authorized Affiliate Agreement. IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have dully executed this Authorized Affiliate Agreement. SAP Public Services, Inc (SAP)(Affiliate) By: Title: Date: By: Title: Date: ,~ul I? 02 04:06p THE PaRer" Clip 512 84? 1085 JUL-I?-2~02 16:31 As supp,ers of good~ or seduces to lhe City of PalO Alto, t~e firm and individuals listed below hereby’ certify:. ~)thst they are currently In complianoe with all lederal and state of C~li~omla laws covering nondiscrimination in employment; and b)that, if awarded the contract, the proposer will not discriminate in employment of any person under the contrast because of race, color, national origin or ancestry, religion, disability, gender or marital status o! such person, THE INFORMATION HEREIN IS CERTIRED CORRECT BY Amy Phelps, vice President (PnINT OR TYP~ NAME)"~’~/ Note: Mary Beth Han~, Vice President & Secretary (PRINT OR TYPE NAME) Calif~m;a corporations Code Section 3T3 requires two ~orpotate offi~e~ to execute ¯ The signature of RrSt O/ricer° mus.___t be one of the fol!owing: Chaim~an of the Board; President," or Vice President. ¯ "The signature of the Se(~ondOffi~r"~ t)a one of the fo.llo.m.’ng: Secretary; Assislant Secretary: Chief IRnanofal Ot~’CeR or Ass~tam TreaSurer. (In the alternative, a certified corporate reSOlu~on attesting to the signatory authority of the Individuals Signing in their respective r~acitles ts acceptable) JUL-I?-2002 18:2T 610 355 2801 P. II/2G CER_T!FICATION OF NONDISCRIMINATION SECTION 41.~0 Certification of Nondiscrimination As suppliers of goods or services to the City of Palo Alto, the firm and individuals listed below hereby certify: a)that they are currently in compliance with all federal and state of California laws covering nondiscrimination in employment; and b) -that, if awarded the contract, the proposer will not discriminate in employment of any person under the contract because of race, color, national origin or ancestry, religion, disability, gender or marital status of such person. THE INFORMATION HEREIN IS CERTIFIED CORRECT BY SIGNATURE(S) BELOW, Firm:SAP Public Services, In~. Signature: Name: Signature: Name: Amy Phelps, Vice President Mary Beth Hanss, Vice President & Secretary (PRINT OR TYPE NAME) California Corporations Code Section 313 requires two corporate officers to execute contracts. ~The signature of Fi~t Officer" must i~e one of the following: Chairman of the Board; President; or Vice President. **The signature of the Second Officer~* must be one of the following: Secretary; Assistant Secretary; Chief Financial Officer; or Assistant Treasurer. (In the alternative, a certified corporate resolution attesting to the signatory authority of the individuals signing in their respective capacities is acceptable) CITY OF PALO ALTO RFP NO 136834 PAGE 1 OF ! (Civil Code § 1189) STATE OF Pennsylvania ) COUNTY OF Delaware ) ) SS. On July 17, 2002, before me, the undersigned, a Notary Public in and for said County and State, personally appeared Mary Beth Hanss, personally known to me or proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is subscribed to the within instrumsnt and acknowledged to me that she executed the same in her authorized capac~ty(les), and that by her signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, execute~ the ±nstrumen~. WITNESS my hand and official seal. ~ture i ~ 1:1,. z ~ II li oo >o 2 o Q. o o"E Q. Q. 0 II II If o E O; --5~-okl_ II II II E o 0 0 0 0 0 (.9 0 0 0 0 0 0 o II II II 0 0 0 0 0 ~~~r" ~-_~-"-;.,-1 ."-;._J0 (9 (9 (9 (9 (9 (9 0 (9 (9 (9 | " oo 0 Q) oo..~ f- ._~ i::: c(. cc cc 0- ,< 0 on- ~ ¸%. o II II 0 0 0 (9 o f- - - >.~- (~ 0 II II 0 (~E ~? >" 0 LL II I, D D D D D :D D D D D D D D 0 ~0 On,, IF-.,,- 00 I1. C 0 II II II ~, ~ 0 0 ~:>.,G.0 II II 0 II It E E~<o >’ 0 II. 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("SAP") SOFTWARE END=USER LICENSE AGREEMENT effective July 22, 2002 ("Agreement") with the CITY OF PALO ALTO ("Licensee") This Schedule is hereby annexed to and made a part of the Agreement specified above. In each instance in which previsions of this Schedule contradict or are inconsistent with the provisions of the Agreement, the previsions of this Schedule shall prevail and govern, and the contradicted or inconsistent provisions of the Agreement shall be deemed amended accordingly. Licensee may request and SAP shall provide, to such degree as SAP makes ~uch services generally available in the Territory, maintenance service ("Maintenance") from SAP with respect to the Software. Maintenance by SAP is limited to the Customer Competency Center(s) specified herein. Maintenance currently includes the delivery of Releases, Versions, Correction Levels and Software correction packages, support via telephone, remote support/update, Early Watch Alert, and SAP Solution Manager (or SAP’s then current .support portal). Maintenance does not include the adaptation of any Modifications or Extensions developed by or for Licensee to new Releases or Versions. In order to receive Maintenance hereunder, Licensee must make all required remote support and update connections to each Designated Unit, at its expense, as requested by SAP. Maintenance will only be offered for the most recent Version of the Software and the prior Version, provided Licensee is using the latest Correction Level of such Version. mySAP Services: Provided Licensee is paying standard Maintenance Fees, Licensee currently receives a choice of one of the following services per live installation per year: A.One (1) GoingLive Check for any new Software or other SAP application implementation; B.One (1) GoingLive Upgrade Check for an upgrade to a higher functional Release (e.g. from R/3 4.0 to 4.6); or C.One (1) GoingLive OS/DB Migration Check. This OS/DB Migration Check assists the Licensee in preparing for a migration of an operating system or database. Migration is the responsibility of the Licensee. In addition to these options, and provided Licensee is paying standard Maintenance Fees, Licensee is currently entitled to receive up to two (2) Ear/yWatch Sessions for the continual optimization of Licensee’s already live system. To schedule GoingLive Check, GoingLive OS/DB Migration Check, or EarlyWatch.Sessions, Licensee must contact Americas CUstomer Support Services at 800-677-7271 or internationally at 610-385-6821 and choose option 6 to schedule these services. To assist Li.censee in this, SAP has established the following scheduling pre-requisites: A. To receive the GoingLive Check or GoingLive Upgrade Check Licensee must inform SAP at, least three (-3) months prior to your go live or upgrade date.B. To receive the EarlyWatch Sessions, SAP requests a minimum of three (3) months advanced notification. In addition, Licensee must send the EarlyWatch Alert data to SAP on at least a monthly basis and cooperate with SAP in reviewing the data and determining the proper deployment of the EarlyWatch Sessions based on the EarlyWatch Alert data. C.To receive the GoingLive OS/DB Migration Check, Licensee must comply with all of the then current pre-Check requirements. These requirements currently include hiring a certified OS/DB migration consultant, proper testing, installation of tools, and advance scheduling. Contact your local SAP Customer Support Representative for more information, Further information and detail about individual SAP services can be found on SAPNet site (http:Uwww.sap.comlservicelindex.htm). LICENSEE ACKNOWLEDGES THAT ITS FAILURE TO UTILIZE THE MAINTENANCE SERVICES PROVIDED BY SAP SUCH AS GOINGLIVE/UPGRADE CHECK AND EARLYWATCH MAY PREVENT SAP FROM BEING ABLE TO IDENTIFY. AND ASSIST IN THE CORRECTION OF POTENTIAL PROBLEMS WHICH, IN TURN, COULD RESULT IN UNSATISFACTORY SOFTWARE PERFORMANCE. In order to receive Maintenance, Licensee agrees to promptly disclose to SAP and provide copies to SAP of any Modifications and to keep and maintain adequate and currp, nt records of all Modifications (which records shall be made reasonably available to SAP). Maintenance, from SAP, for the Software licensed hereunder is limited to the following site(s): NOTE: For List Price Values of less than USD 650,000 limit to I site. In order to receive Maintenance, Licensee agrees to establish and maintain Customer Competency Center(s) ("CCC") at the site(s) specified above within twelve (12) months of the Effective Date of this Schedule in accordance with the following. Each CCC must maintain an internal Help Desk to provide first level support to Licensee’s Users relating to technology and application software questions or problems. Such internal Help Desk(s) must be staffed dudng Licensee’s non*hal working hours, but no less than (8) eight hours a day, (5) five days a week. All Users may have access to SAP Solution Manager (or SAP’s then current support portal) however, only Licensee CCC employees are authori~.ed to contact SAP after attempting to resolve the matter via Licensee’s internal Help Desk. Each CCC shall coordinate Licensee’s Modification and Extension notification and disclosure requirements and shall coordinate Licensee’s development requests. Licensee’s CCC is responsible for the administration and management of the requirements specified in the Agreement including, but not limited to, performing periodic self audits to ensure Licensee’s compliance with the license grant, maintaining master and installation data and managing the receipt of new Releases, Version, and Correction Levels of the Software. In the event Licensee does not establish and maintain CCC(s) in accordance with the above, SAP reserves the right to increase Licensee’s then current maintenance percentage factor then in effect. Maintenance Fees shall be paid quarterly in arrears and shall be spec’~ied in Appendices to the Agreement. In addition, Licensee shall be invoiced an annual fee of USD 1,500 for up to three (3) designated SAPcompliant remote connections. Maintenance Services offered by SAP may be changed annually by SAP at any time upon three (3) months prior written notice. After Year 1, the Maintenance Fees and any limitations on increases are subject to Licensee’s compliance with the CCC requirements specified above. Maintenance may be terminated by either party in writing at any time upon three (3) months’ prior written notice and Licensee shall be entitled to a pro-rata refund of prepaid Maintenance Fees. Notwithstanding the forgoing, SAP may terminate Maintenance after thirty (30) days written notice of Licensees failure to pay Maintenance Fees. In the event Licensee elects not to commence Maintenance upon the first day Of the month following initial Delivery of the Software, or Maintenance is otherwise declined for some period of time, and is subsequently requested or reinstated, SAP will invoice Licensee the accruedMaintenance Fees associated with such time period plus a reinstatement fee. ATTACHMENT 2 AGREEMENT FOR IMPLEMENTATION SERVICES FOR ENTERPRISE RESOURCE PLANNING SOFTWARE THIS AGREEMENT is made and entered into on the __ day of 2002, by and between the CITY OF PALO ALTO, a chartered municipal corporation of the State of California ("CITY"), and ea consulting, inc. (d/b/a ea, inc.), a California corporation, with its primary place of business at 1130 Iron Point Road, Suite 288, Folsom, CA 95630, Tax ID Number 68-02094442 ("ea"). RECITALS: A. CITY circulated~ a Request for Proposals (RFP #136834 for Enterprise Resource Planning Software ("ERP Software") and is currently negotiating with SAP Public Services, Inc. ("SAP") to acquire a license to.use certain SAP ERP Software, which is more specifically described in Exhibit "A". B. CITY also circulated a RequesZ for Proposals (RFP #142691) for Implementation Services for the ERP Software, which set forth CITY’s objectives for implementation and use of the ERP Software. ea has submitted a proposal iD response to CITY’s REP #142691, and represents that the SAP. licensed software as implemented by ea wil! meet CITY’s objectives as described here and after. NOW, THEREFORE, in consideration covenants, the parties hereto agree as follows: SECTION i.SCOPE OF SERVICES of their mutual i.i Performance of Services. In reliance on the representations and warranties contained in this Agreement, CITY hires ea to perform, and ea agrees that it will perform or cause to be performed the services set forth in Exhibit "A" relating to the ERP Software. As used herein., "Services" shall mean the installation, modification, implementation, conversion, integration, and configuration of the ERP Software system as described in this Section 1 and Exhibit "A". From and after the date City issues a Notice-to-Proceed to ea, ea agrees to perform the Services and CITY agrees to compensate ea for its performance of the Services, in accordance with the performance standards, timetables, and milestones set forth in this Agreement, including the Exhibits hereto. Except as explicitly set forth in this Agreement, ea shall furnish all labor, materials, equipment, products, tools, transport, ation, and supplies required to perform the Services. 020710 sm 0032552 As part of the Services relating to the ERP Software, ea will provide to CITY all of the functionality required by CITY, as described in the ea’s response to the City’s RFP #142691, attached hereto as Appendix 1 to Exhibit ~A", for the compensation set forth in Exhibit "B", subject to any exceptions set forth in this Agreement. CITY requirements that cannot be met fully out-of-the- box with the ERP Software will be fulfilled by ea without modification to the ERP Software source code, except at User Exits or such other points that will not interfere with migrating configurations to new versions of the ERP Software. ea shall not modify the ERP Software in a manner that will detrimentally affect CITY’s license to use the ERP Software, including but not limited to any warranties respecting the license. If requested by CITY in writing, the parties may substitute for the Deliverables, Services, or tasks described in Exhibit "A", new Deliverables, Services, or tasks that are reasonably and substantially equivalent to those Deliverables, Services, or tasks described in Exhibit "A", and any such substitution shall not result in any adjustment to the compensation, unless otherwise mutually agreed in writing by the parties. 1.2 Project Director. ea will assign Cash Menicke as the Project Director to have supervisory responsibility for the performance, progress and execution of the Services. If circumstances or conditions subsequent to the execution of this Agreement cause the substitution of the Project Director for any reason, the appointment of a substitute Project Director will be subject to the prior written approval of CITY’s Project Manager. City shal! designate an adequate working area (non-site location") for the Project Director, who shall work at the on-site location a minimum of forty (40) hours a week during the financials phase, and thirty-two (32) hours a week during other phases. 1.3 Project Manager. The City Project Manager will represent CITY for all purposes under this Agreement. Ronald Fong. is designated as the Project Manager for the City Manager. The Project Manager will supervise the performance, progress and execution of the Services. The City Manager may designate an alternate Project Manager from time to time. 1.4 ea Key Personnel. The CITY shall have the right to interview the initial Key Personnel and any replacement Key Personnel, and ea shall not designate any Key Personnel without the CITY’s prior written consent. For the purposes of this Agreement, "Key Personnel" shall mean and include "Project Director, Financial Team Lead, Human Resources Team Lead and Technical Team Lead." ea shall not reassign any individual d~signated as Key Personnel without the CITY’s prior written consent during the period beginning on the date such individual commences performing the Services hereunder, to other functions if doing so would require 020710 sm 0032552 the alteration or reduction of such individual’s contribution to, or involvement with, the Services. ea shall obtain the CITY’s prior written consent thirty (30) days, or such shorter time as agreed by the parties, in advance of any assignment of any Key Personnel resulting in the alteration or reduction of time expended by such individual in performance of ea’s duties under this Agreement, which consent will not be unreasonably withheld by the CITY. In the event any one of the Key Personnel is reassigned, becomes incapacitated, or ceases to be employed by ea and therefore becomes unable to perform the functions or responsibilities assigned to him or her, ea shall (i) within forty-eight (48) hours, if it is within a week of delivery of a critical milestone, or, (ii) within ninety-six (96) hours if it is outside the time frame stipulated in (i), temporarily replace such person with another person properly qualified to perform the functions of such replaced person, and (iii) within one.(1) month, permanently replace such replaced person with another person approved by the CITY and properly qualified to perform the functions of such replaced person. Further, ea will provide a no cost transition period of 80 hours if ea removes a consultant identified as a Key Personnel. If that key personnel is the Project Director then ea will provide a 160 hour no-cost transition period. 1.5 Agreement Dependent on Contract with SAP. The parties understand and acknowledge that this Agreement is dependent upon CITY’s acquisition of the ERP Software from SAP, and agree that this Agreement will be null and void if CITY does not acquire the ERP Software from SAP. 1.6 Additional Services; Amendments. Any new or additional services that are not described in Exhibit "A" or any change to the Services described in Exhibit "A", which require the payment of Compensation in excess of the amount set forth in Section 2 will not be effective except by means of an Amendment to this Agreement. An amendment to change the amount of Compensation payable to ea may be agreed to on behalf of CITY by the City Manager, within the dollar authority delegated to the City Manager by the City Council. All proposed changes to Compensation in excess of the amount delegated to the City Manager and all material changes to any other provision of this Agreement shall require the approval of the City Council. For a period extending 24 months from the execution of this agreement, the Compensation payable for new or additional services, or changes to Services requiring additional Compensation shall be at an hourly rate not to exceed $138 per hour for each of the ea Personnel assigned to perform such Services. Subsequent to such 24 month period, additional Compensation shall be payable at ea’s then current rates, provided that ea shall have notified CITY in writing at~ least 30 days prior to the effective date of any change in its hourly rates. 020710 sm 0032552 The Project Manager and the Project Director may agree to any specific procedures for processing amendments as are in furtherance of this provision and in. conformance with CITY’s purchasing requirements. 1.7 Ownership of Work Product. To the extent that the "Work Product," as defined in Exhibit "A", provided under this Agreement is in support of software programs licensed to CITY by third parties or ea under one or more software license agreements, the applicable software license agreement shall govern CITY’s use of supplemental software included in the Work Product provided hereunder. All Work Product provided hereunder, including but not limited to computer software programs, operating instructions, unique design concepts, training materials, or other documentation developed for or specifically relating to the Statement of Work, as well as ideas, know-how, techniques, products and inventions, shall be and remain the property of the third party supplier or ea, as appropriate, ea grants to CITY, subject to the terms of the applicable software license agreement, a perpetual, nonexclusive, nontransferable, worldwide, fully paid up license to use, solely for its own internal business purposes, such elements of the Work Product. ea shall indemnify and defend at its expense, and hold harmless CITY from and against any and all claims, demands, judgments, awards, liabilities, losses, damages, and reasonable expenses, including reasonable attorneys’ fees incurred prior to ea’s complete assumption of any defense relating to such indemnification, arising out of any violation or infringement, or alleged violation or infringement, of any patent right, copyright, trademark, trade dress, mask works or other intellectual property rights of any third party, with respect to use of any programs, systems, equipment, or other products or materials developed~or provided by ea under this Agreement (individually or collectively, the "Materials"). In the event of any claim by any third party against CITY, CITY shall promptly notify ea in writing of the claim and ea shall have sole authority (at its sole cost and expense) to (i) replace such infringing Materials, (ii) modify such Materials to be non-infringing, or (iii) procure for CITY the right to continue using the Materials. Further, CITY shall incur no liability and shall have no obligation with respect to use by ea of such Materials outside the performance of this Agreement. If ea reasonably determines that none of these alternatives is reasonably available, CITY agrees to return the applicable Materials to ea on ea’s written request~ ea will then give CITY a refund equal to the amount CITY paid ea for the Materials. ea shall have no obligation or liability for any claim based uPon or resulting from (a) the use, operation or combination of the Materials wfth non-ea programs, data, equipment or documentation (other than contemplated by this Agreement); (b) CITY’s modification of the Materials, 4 020710 sm 0032552 unless such a modification is performed as required or otherwise agreed to by the parties under this Agreement, or (c) non- compliance with ea’s written instructiQns for use of the Materials. The foregoing states the entire liability of ea and exclusive remedy of CITY with respect to infringement of any intellectual property rights in the Materials. 1.8 Calculations of number of days. The Parties hereby agree that the number of days calculated in this Agreement shall be based on business working days as opposed to calendar days unless otherwise specified. 1.9 Project Plan and Business Blueprint. a. ea will deliver to the CITY in Phase I, no later than 45 calendar days from the start date of the Project as identified in the Notice-to-Proceed, a "Project Plan," which updates the Statement of Work ("SOW") to describe the level of staff effort, roles and responsibilities, and project tasks of the project. b. ea will deliver to the CITY in Phase I, no later than one-hundred-twenty (120) calendar days from the start date of the Project as identified in the Notice-to-Proceed, a "Business Blueprint," which outlines or updates SOW sections related to implementation method, rollout schedule by module, process change required to implement the software, modifications and cust0mizations, specific acceptance criteria, staffing for CITY and ea, and "Training Plan." The Business Blueprint is a highly detailed implementation document that is intended to be the definitive, step-by-step implementation guide. (i) The time frames under (a) and (b) above may be modified by mutual agreement between the Project Manager and the Chief Executive Officer or Chief Operating Officer of ea. (ii) The Project Plan and Business Blueprint shall be considered project Deliverables for the purpose~ of acceptance procedures, as per the ~Acceptance" section of this Agreement. c. ea will deliver to the CITY in Phase II, no later than June 20, 2003, a "Project Plan," which updates the Statement of Work ("SOW") to describe the level of staff effort, roles and responsibilities, and project tasks of the project. do ea will deliver to the CITY in Phase II, no later than July 25, 2003, a ~Business Blueprint," which outlines or updates SOW sections related to implementation method, rollout schedule by module, process change required to implement the software, modifications and customizations, specific acceptance criteria, staffing for CITY and ea, and "Training Plan." // // 020710 sm 0032552 SECTION 2.COMPENSATION 2.1 In full consideration of the Services to be provided by ea pursuant to Section 1 of this Agreement, CITY shall pay to ea a total sum not to exceed Three Million One Hundred Sixty-eight Thousand Three Hundred Twenty-eight Dollars ($3,168,328), payable within thirty (30) days of submission by ea of its itemized billings, in accordance with the payment schedule described in Exhibit "B". Except as provided in Section 1.6, any hours worked for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to CITY. 2.2 The CITY will retain a portion of the compensation payments otherwise due to ea, in accordance with the ~Retainage" provisions of Exhibit "B", Payment Schedule. SECTION 3.’INSTALLATION AND ACCEPTANCE 3.1 Conditional Acceptance. Upon ea’s nQtification to CITY that ea has completed the installation of any one or more components of the ERP Software ("Software Components") and that such Software Components are ready for testing, CITY shall begin testing such Software Components in a non-production environment using the test procedures and standards contained in Exhibit "A", or such other standards as are mutually agreed upon in writing ("Acceptance Test Procedures"), to determine whether each Software Component meets in all material respects the applicable "Specifications" and acceptance criteria ("Acceptance Criteria") set forth in Exhibit ~A", or such other specifications or criteria as are mutually agreed upon in writing. (~Pre-live Testing") After CITY has completed the Pre-Live Testing for a Software Component and has operated such Software Component for thirty (30) calendar days in accordance with the Specifications, CITY Shall notify ea in writing that "Conditional Acceptance" of such Software Component (or al! of the ERP Software,~ as the case may be) has occurred. If CITY determines that a Software Component, or the ERP Software as a whole, does not perform as provided for in this Agreement, CITY shall deliver to ea’s Project Director, in writing, by mail, personal service, or by electronic medium, a report describing the discrepancies, ea shall correct the configuration errors but not including software defects within fifteen (15) calendar days after receiving the report, and CITY may re-test the Software Component(s) or the ERP Software as a whole, as the case may be, for an additional test period of up to thirty (30) calendar days, at the end of which the process described above in this Section 3.1 shall be repeated. In the event the errors or defects are caused by software defects, ea will make a good faith effort to resolve the problem within 30 days. For the purpose of this Agreement a software defect shall be defined as a problem requiring the filing of an OSS report. This procedure shal! continue until Conditional 020710 sm 0032552 Acceptance of the Software Component or the ERP Software as a whole, as the case may be. 3 2 Final Acceptance. Once Conditional Acceptance of all Software Components (i.e., the ERP Software as a whole) has occurred, CITY shall begin using the ERP Software in a production environment ("Live Testing"). The parties agree that the Live Testing period shall be long enough to give CITY sufficient time to test all functions of the ERP Software n an integrated environment, but no more than forty-five (45) consecutive calendar days. Once CITY has done the Live Testing and has determined that: (i) there have been no material errors, (ii) the ERP Software performs as warranted in this Agreement, and (iii) all training services and other services described in Exhibit "A" have been completed, then CITY shall notify ea in writing of its "Final Acceptance" of the ERP Software. In no event shall any other action or inaction by CITY, includingCITY’s use of the ERP Software, or any portion thereof, in a live, operational environment, constitute Final Acceptance of any portion of the ERP Software. Notwithstanding anything to the contrary contained herein, in no event shall Final Acceptance be deemed a waiver of any right or remedy available to CITY under this Agreement, at law, or in equity as a result of any defect in a Software Component or Deliverable not discovered by CITY during the Pre-Live Testing or Live Testing Periods. 3.3 Failure of Acceptance. If the ERP Software does not function in a manner that is acceptable to CITY in the Live Testing period, CITY shall have the option, upon notice to ea, to: a. Terminate this Agreement, in accordance with the provisions of Section 6; or b. Accept the ERP Software at its then level of performance; or c. Permit the Live Testing to be further extended for such period as mutually agreed upon by the Parties in writing; or do Accept those portions of the ERP Software which pass the acceptance criteria and require ea to correct the remaining portions, in which event CITY shall not be liable for any payments associated with the implementation of such remaining portions until they have passed the acceptance testing; or e.~ Pursue such remedies as may be available to CITY at law or in equity. Acceptance of the ERP Software by the CITY will not release ea from the requirements of correcting software defects in accordance with the terms of the warranties and maintenance requirements set forth herein. 020710 sm 0032552 3.4 Acceptance of Non-ERP Deliverables. CITY will review, approve and provide written approval of all project Deliverables in the following way: ao ea’s Project Director will review "drafts" of each Deliverable with CITY’s Project Manager prior to formal submittal of each Deliverable. bo CITY’s Project Manager will identify in writing any required changes, deficiencies, and/or additions necessary within five (5) business days of the receipt of each draft Deliverable. For the purposes of this section, business days shall be defined as the normal work week of CITY’s Project Manager, excluding CITY holidays. A period greater than 5 business days may be permitted upon mutual agreement of the Project Manager and Project Director. c. ea will revise each Deliverable as identified by CITY and submit a final version of the Deliverable for review and approval by CITY’s Project Manager. The Project Manager shall have an additional 5 working days (or such additional time may be mutually agreed upon) to review the Deliverable and identify in writing any further required changes, deficiencies, and/or additions. d.Upon acceptance of the final Deliverable, CITY’s Project Manager will sign a Deliverable Acceptance form and shall return it to ea’s Project Director. If CITY rejects a final Deliverable, ea shall revise the Deliverable in a manner acceptable to CITY and resubmit the deliverable for review in accordance with the procedures outlined in this section. e. If CITY fails to provide written notification to ea within the time periods set forth in this section 3.4 as to its approva! and acceptance or identification of deficiencies of a Deliverable, ea’s Project Director will notify CITY’s Project Manager of such failure. CITY’s Project Manager may request an additional two business days in which to provide such written notification. If CITY’s Project Manager does not request the. additional time, or within such period of time still does not provide such written notification, then the Deliverable will be considered accepted by CITY. 3.5 Test Criteria. Unless otherwise specifically provided in Exhibit "A", or the Project Plan, the test for each Software Component of the ERP System shall include testing to the CITY’sreasonable satisfaction in the following regards: (a) unit testing (i.e., individual testing of each field, screen, screen-related action, and module/program); (b) system testing (i.e., testing of the ERP System as a whole and its integration with other CITY.systems); and (c) volume/stress testing (i.e., testing of the ERP System under peak conditions to measure response time and ERP System reaction to load). 8 020710 sm 0032552 SECTION 4.WARRANTY 4.1 ea represents that during the warranty period, for a period of Ninety (90) days from CITY’s Final Acceptance, the ERP Software excluding any software defects, will (i) meet the Acceptance Criteria, (ii) be free from all material defects; and (iii) operate according to the Functional Requirement Matrix, Statement of Work and Deliverables as outlined in the Statement of Work., and (iv) with respect to any modifications, customizations or changes made to the ERP Software by ea as part of the Services, is fit for the purposes expressly set forth in this Agreement. Additionally, ea will warrant, for a sixty (60) day period, the configurations associated with each of the following specific, non- monthly, non-repetitive transactions, from and after theirfirst occurrence: fiscal year end, calendar year end, 1099 production, W2 production, encumbrance carryover, purchase order carry-over, COLA payroll adjustment, benefits adjustment, Payroll Taxes - Quarterly Reporting, EEO-4 Reporting and annual financial report statement generation. The p&rties agree that these specifically enumerated types of transactions will be the only exceptions to the standard 90 day warranty period. 4.2 ea warrants that the ERP Software, with the exception of software defects, shall meet or exceed the Specifications and Acceptance Criteria during the warranty period, and agrees to provide such additiona! Services or modifications, or repair all defects at no charge during said period, provided it shall have received reasonable notice of such defects or deficiencies, and provided the damage sh~ll not have been caused by willful act or negligence of CITY’s agents or employees. 4.3 ea represents and warrants that all ea-provided ERP Software configurations, modifications, customizations, data conversions and interfaces (i) shall function properly and in accordance with the Specifications, separately and as a fully integrated system, and (ii) when operated together will not cause any material delays, defects, or problems with the ERP Software, subject to any capacity constraints of CITY’s communications network environment, ea further warrants that the ERP Software functionality that is identified in Exhibit "A" as ~Fully ’Out of the Box’," will be delivered to CITY by ea, to the maximum extent possible, without modifications to the ERP Software or the source code, bolt-on programs, or extensive work-arounds.~ In addition, ea warrants that the modifications to the ERP Software performed by ea hereunder will not detract from or otherwise interfere with the full functionality of the ERP Software as described in the Specifications and Acceptance Criteria. 4.4 In the event that CITY makes or demands any changes or modifications to the ERP Software within the warranty period except as agreed to by ea, the foregoing limited warranty of ea 9 020710 sm 0032552 , with respect to the ERP Software shall no longer apply, and ea shall have the right to charge CITY for additional services at ea’s then prevailing service rate; however, ea shall have no obligation to provide such services. 4.5 ea warrants that its personnel (including any subcontractors) assigned to function during the term of this Agreement shall be qualified to perform ea’s obligations under this Agreement. All personne! (and any substitutes thereof) assigned to the performance of this Agreement shall be subject to approval of the CITY. Personnel whose conduct is incompetent, inefficient, or otherwise unsatisfactory to the CITY shall be replaced forthwith upon request. In no event shall more than 25% of ea’s implementation effort be performed by subcontractors. 4.6 EXCEPT AS SET FORTH ABOVE, NO OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE MADE BY EA. IN NO EVENT WILL EA BE LIABLE TO CITY OR ANY OTHER PARTY FOR ANY LOSS, INCLUDING TIME, MONEY, GOODWILL AND SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES, WHICH MAY ARISE FROM THE USE, OPERATION OR MODIFICATION OF THE ERP SOFTWARE. 4.7 Limitations of Liability.Excepting the indemnification obligations of ea set forth in this Agreement, ea’s liability under this Agreement for any cause whatsoever, and regardless of the form of action, shall be limited, as fol!ows: follows: In Phase I, the limitation of liability is as (i) Half (0.5) times the contract amount of Phase 1 prior to the acceptance of business blueprint as specified in the SOW. (ii) One (I.0) times the contract amount of Phase 1 upon acceptance of Business Blueprint but prior to Baseline Configuration. (iii) One-Half (1.5) times the contract amount of Phase 1 upon acceptance of Baseline Configuration until Go-Live of the project. follows: In Phase II, the limitation of liability is as 020710 sm 0032552 10 (i) Half (0.5) times the contract amount of Phase II prior to the acceptance of business blueprint as specified in the SOW. (ii) One (i.0) times th@ contract amount of Phase II upon acceptance of Business Blueprint but prior to Baseline Configuration. (iii)One-Half (1o5) times the contract amount of Phase II upon acceptance of Baseline Configuration unti! Go-Live of the project. The foregoing limitation upon the amount of ea’s liability shall not apply to claims based upon ea’s repudiation of, or unexcused refusal to perform, this Agreement or its failure or refusal to continue Services in violation of Section I; and CITY may recover from ea all direct costs and expenses paid or incurred by CITY as a direct result of any failure by ea to perform its obligations hereunder, including any additional costs incurred by CITY to obtain reasonable replacement services complying with the terms hereof and to address and to minimize or avoid the consequences of , the breach and the additional amount CITY actually has to pay for replacement services.This limit also applies to subcontractors of ea. SECTION 5.TERM 5.1 This Agreement shall commence on the date of its execution .and shall continue and be in full force and effect unti! al! Services described in Section I, as may from time to time be amended, are completed, and all Deliverables described in Section I, as may from time to time be amended, have been delivered and accepted, unless earlier terminated in accordance with other provisions of this Agreement. SECTION 6.TERMINATION 6.1 This Agreement may be terminated by either party upon thirty (30) days prior written notice if the other party has materially breached the provisions of this Agreement and has not cured such breach within such notice period. 6o2 This Agreement may also be terminated by CITY prior to acceptance of the ERP Software, in accordance with the provisions of Section 3.3. 6.3 Termination for Convenience. In addition, this Agreement may be terminated in whole or in part, by CITY in accordance with this Section 6.3 whenever CITY determines that such termination is in the best interest of CITY, which termination shall be effective at 11:59 p.m. on the intended date of termination (the "Termination Date"), which date shall not be ii 020710 sm 0032552 sooner than sixty (60) days after CITY shall have delivered to ea a notice specifying the extent to which provision of Services under the Agreement are terminated, and the date upon which such termination will become effective (the "Termination Notice"). In the event CITY elects to terminate any category of Service (but not all Services in the aggregate) pursuant to the terms hereof, ea shall perform its Disentanglement obligations hereunder to the extent applicable to the Service or Services being terminated. "Disentanglement" as used in this Section 6.3 is described and defined in Section 6.4. In the event of all or any partial termination of the Services, ea shall be entitled to the unpaid Compensation for Services actually rendered up to and including the applicable Termination Date, on a time and materials basis, at an hourly rate not to exceed $!38 for each of the ea Personnel assigned to perform such unpaid Services in connection with the undelivered Deliverables that were to be provided or the tasks to be performed under Exhibit "A". In the event of such early termination, CITY and ea shall negotiate an equitable additional payment to ea, which shall take into account ea’s cost of termination of third-party software licenses, and for leases of equipment and real property, entered into for and on behalf of CITY in connection with this Agreement. CITY shall also return any sums held back as retention from the Compensation previously paid to ea. If within sixty (60) days following the Termination Date, the parties have not agreed upon the amount of Services rendered as of the Termination Date or the amount of such additional payments, then the issue will be treated as a dispute under this Agreement. 6.4 Disentanglement. In connection with any expiration or termination of the Term of this Agreement or of the provision of any of the Services provided hereunder, ea shall take all actions necessary to accomplish a complete and timely transition from ea to the CITY, or to any replacement providers (collectively, the "New ea" or ~NC") designated by CITY, of the Services being terminated (a "Disentanglement"), without material impact on the Services or any other services provided by third parties, ea shall cooperate with CITY and the NC and otherwise take all steps reasonably required to assist CITY in effecting a complete and timely Disentanglement. ea shall provide CITY and the NC with all information regarding the Services or as is otherwise needed for Disentanglement, subject to NC agreeing to maintain the confidentiality of ea Confidential Information. ea shall provide for the prompt and orderly conclusion of all work, as CITY may direct, including completion or partial completion of projects, documentation of work in process, and other measures to assure an orderly transition to CITY or the NC. ea shall provide such Disentanglement services as CITY reasonably requests for a period of up to one (I) year, on~a time and materials basis, at an hourly rate not to exceed $138 for each ea Personnel that is reasonably required to perform such Disentanglement services. 020710 sm 0032552 12 6.5 Upon termination, in addition to the remedies described in this Section 6, either party may pursue such remedies at law or in equity as may be available to it. 6.6 This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (i) at the end of. any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This Section 6.6 shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 7.INDEMNITY ea agrees to protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents from any and all demands, claims, or liability for injury or death of any person, or property damage caused by or arising out of the negligent acts or omissions, or willful misconduct of ea, its employees or contractors, in the performance of this Agreement. SECTION 8.INSURANCE 8.1 ea, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "C" ea and its contractors, if any, shall obtain a policy endorsement naming the City of Palo~Alto as an additional insured under any general liability or automobile policy or policies. 8°2 All insurance coverage required hereunder will be provided through carriers with Best’s Key Rating Guide ratings of A:VII or higher which are admitted to transact insurance business in the State of California. Any and all contractors of ea retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additiona! insured under such policies as required above. 8.3 Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and wil! contain an endorsement stating that the insurance is primary coverage and (i) if the policy is canceled before its expiration date for any reason other than the non-payment of premium, the issuing company shall provide City at least a thirty (30) day written notice before the effective date of cancellation, and, (ii)if the policy is cancelled before its expiration date for the non-payment of premium, the issuing company shall provide City 13 020710 sm 0032552 at least a ten (I0) day written notice before the effective date of cancellation, ea shall be responsible for ensuring that current certificates are provided to City’s Purchasing Manager during the entire term of this Agreement. 8.4 The procuring of such required policy or policies of insurance will not be construed to limit ea’s liability hereunder nor to fulfill the indemnification provisions of this Agreement. 8.5 ea, by executing this Agreement, certifies that it is aware of the provisions of the Labor Code of the State of California which require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that Code, and certifies that it will comply with such provisions, as applicable, before commencing the performance of the Services. SECTION 9.ASSIGNMENT ea shall not assign or subcontract the services to be provided by it under this Agreement,. and no assignment of this Agreement or subcontracting of the services to be provided under this Agreement or any right or interest therein by ea shall be effective, without the prior written consent by CITY of such assignment or subcontract, which consent will not be unreasonably withheld. The performance of the Agreement by ea is of the essence of the Agreement. In the event of any assignment or subcontract, ea shall remain primarily liable for all of its obligations under this Agreement. CITY hereby agrees that. up to 25% of the personnel assigned by ea to perform the obligations of this Agreement may be contractors of ea, rather than employees of ea; provided, however, that any individual that ea proposes to perform work under this Agreement will be subject to the provisions of Section 4.5 regarding employees. SECTION I0.WAIVER No waiver by either party of any breach or violation of any covenant, term condition, or provision of this Agreement or of the provisions of any ordinance or law, shall be construed to waive any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same. The acceptance by either party of any fee or other money which may become due hereunder will not be deemed to be a waiver of any proceeding breach or violation by the other party of any term, covenant, condition or provision of this Agreement or of any applicable law or ordinance. // 020710 sm 0032552 14 SECTION CONFLICT OF INTEREST ll.1 In accepting this Agreement, ea covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 11.2 ea further covenants that, in the performance of this Agreement, it will not employ any contractor or person having such an interest, ea certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 11.3 If the Project Manager determines that any employee or contractor of ea is a "Consultant" as that term is defined by the Regulations of the Fair Political Practices Commission, that person shall be required to file the appropriate financial disclosure documents as required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 12.NONDISCRIMINATION As set forth in the Palo Alto Municipal Code, no discrimination will be made in the employment of any person under this Agreement because of the age, race, color, national origin, ancestry, religion, disability, sexual preference or gender of that person, ea acknowledges that it has read and understands the provisions of Chapter 2.28 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Chapter 2.28 pertaining to nondiscrimination in employment, including completing the requisite form furnished by CITY and set forth in Exhibit SECTION 13.FORCE MAJEURE The parties will exercise every reasonable effort to meet their respective obligations hereunder, but either party shall be excused from the performance of any of its covenants or agreements hereunder and such party’s nonperformance shall not be a default or grounds for termination of this Agreement for any period to the extent that such party is prevented, hindered or delayed for any period not in excess of thirty (30) days from performing any of its covenants or agreements, in whole or in part, as a result of an act of God, war, civil disturbance, court order, or other cause beyond that party’s reasonable control, including without limitation, any denial of access to CITY’s facilities. The parties hereby agree to use their reasonable efforts to remedy the effect caused by the occurrence of the event giving rise to a party’s nonperformance of its covenants or agreements under this section. The parties agree to provide prompt notice to the other party to the extent that 15 020710 sm 0032552 either party is relying on the provisions of this Section for its failure to perform any of its covenants or agreements hereunder. [This is similar to ea’s provision, but specifically does not include strikes and a couple of other types of occurrences as an excuse for nonperformance. It also has a limit of 30 days.] SECTION 14.CONFIDENTIALITY 14.1 The parties acknowledge that in the course of performing the responsibilities under this Agreement, they each may be exposed to or acquire information that is proprietary to or confidential to the other party or its affiliated companies or their clients. Any and all information of one party in any form obtained by the other party or its employees, agents or representatives in the performance of this Agreement shall be deemed to be confidential and proprietary information of such party. The parties agree to hold such information in strict confidence and not to copy, reproduce, sell, assign, license, market, transfer, give or otherwise disclose such information to third parties or to use such information for any purposes whatsoever, without the express written permission of the other party, other than for the provision of services under this Agreement. The parties agree to advise each of their employees, agents, and representatives of their obligations to keep such information confidential. All such confidential and proprietary information described herein and any deliverable provided hereunder, in whatever form, are hereinafter collectively referred to as "Confidential Information." The parties shall use their reasonable efforts to assist each ’other in identifying and preventing any unauthorized use or disclosure of any Confidential Information. Without limitation of the foregoing, the parties shall use reasonable efforts to advise each other immediately in the event that either learns or has reason to believe that any person who has had access to Confidential Information has violated or intends to violate the terms of this Agreement, and will reasonably cooperate in seeking relief against any such person. 14.2 Notwithstanding the obligations set forth in Section 14.1, the confidentiality obligations of the parties shall not extend to information that: is, as of the time of its disclosure, or thereafter becomes part of the public domain through a source other than receiving party; was known to the receiving party as of the time of its disclosure; or is independently developed by the receiving party; or is subsequently learned from a third party not under a confidentiality obligation to the providing party; or is required tobe disclosed pursuant to court order or government whereupon the receiving party shall provide notice to the other party prior to such disclosure. 14.3 Limitations of Liability. The liability of either party under this Section 14, including the cost of 020710 sm 0032552 16 enforcement, will not exceed the liability as set forth in Section 4.7. SECTION 15.NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY:Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 with copies to:Manager of Information Technology Services City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303, to:Purchasing Manager City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 To ea:1130 Iron Point Road, Suite 288 Folsom, CA 95630 ATTN: with copies to: SECTION 16.AUDITS ea will permit CITY to audit, within thirty (30) days of written notice from the CITY at any reasonable time during the term of this Agreement and for three (3) years thereafter, ea’s records pertaining to matters covered by this Agreement. ea further agrees to maintain and retain such records ~for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 17.INDEPENDENT CONTRACTOR Any implication in this Agreement to the contrary notwithstanding, in performing services hereunder, ea shall be acting solely as an independent contractor. Nothing in this Agreement shall be construed to establish a partnership, joint venture, group, pool, syndicate or agency between ea and CITYo No provision contained herein shall be construed as authorizing or empowering either party to assume or create any obligation or responsibility whatsoever, express’or implied, on behalf, or in the name of, the other party in any manner, or to make any 17 020710 sm 0032552 representation, warranty or commitment on behalf of the other party. In no event shall either party be liable for (i) any loss incurred by the other party in the course of its operations, or (ii) any debts, obligations or liabilities of the other party, whether due or to become due. SECTION 18. COVENANTS NOT TO HIRE 18.1 CITY’s Covenant. CITY hereby agrees that during the term of this Agreement and for a period of one (I) year thereafter it shall not, without the prior written consent of ea a. directly or indirectly (i) solicit or induce, or in any manner attempt to solicit or induce, any person employed by ea who has material contact with CITY during the term of this Agreement, to leave such employment, whether or not such employment is pursuant to a written contract with ea or otherwise, or (ii) solicit or induce, or in any manner attempt to solicit or induce, any person under contract with ea to perform services for, or provide services to, any client of ea, to terminate his or her contract with ea, or; b. hire or otherwise obtain services, directly or indirectly, from any person emp!oyed by ea who has material contact with CITY during the term hereof. For purposes of this Agreement, "material contact" shall include any ea employee or contractor who is involved with the preparation of any bid for CITY, who has participated in the negotiation of this Agreement or any Work Order, or who provides any support services to enable ea to perform the Services. 18.2 Liquidated Damages from CITY. CITY acknowledges that it would be difficult to estimate or prove the actual damages to ea resulting from a breach of the covenant set forth in section 18.1. Therefore, in the event of a breach of such covenant by CITY, CITY shall pay to ea, immediately upon demand from ea, the sum of Fifty Thousand Dollars ($50,000), which amount is liquidated damages and fairly represents an estimate of the costs ea will have incurred to recruit and train any such former employee, and said amount shall not be deemed to be a penalty of any kind. Damages under this section no way limit ea’s ability to collect damages for any other breach of this agreement. 18.3 ea’s Covenant. ea hereby agrees that during the term of this Agreement and for a period of one (i) year thereafter it shall not, without the prior written consent of CITY a. directly or indirectly (i) solicit or induce, or in any manner attempt to solicit or induce, any person employed by CITY who has material contact with ea during the term of this Agreement, to leave such employment, whether or not such 18 020710 sm 0032552 employment is pursuant to a written contract with CITY or otherwise, or (ii) solicit or induce, or in any manner attempt to solicit or induce, any person under contract with CITY to perform services for, or provide services to, CITY, to terminate his or her contract with CITY, or; b. hire or otherwise obtain services, directly or indirectly, from any person emp!oyed by CITY who has material contact with ea during the term hereof. For purposes of this Agreement, "material contact" shall include not only the key CITY contacts for the Project Consultants, but also any CITY employee who has participated in the negotiation of this Agreement or any Work Order, or who provides any support services to enable ea to perform the Services. 18.4 Liquidated Damages from ea. ea acknowledges that it would be difficult to estimate or prove the actual damages to CITY resulting from a breach of the covenant set forth in Section 18.3. Therefore, in the event of a breach of such covenant by ea, ea shall pay to CITY, immediately upon demand from CITY, the sum~of Fifty Thousand Dollars ($50,000), which amount is liquidated damages and fairly represents an estimate of the costs CITY will have incurred to recruit and train any such former employee, and said amount shall not be deemed to be a penalty of any kind. SECTION 19.DISPUTE RESOLUTION 19.1 In the event of any dispute between CITY and ea with respect to this Agreement or the enforcement of rights hereunder, either party may, by notice to the other party (~’Mediation Notice"), require such dispute to be submitted to non-binding mediation in Palo Alto, California, with a mediator acceptable to ea and CITY. If such mediation shall not have resulted in a settlement of the dispute within sixty (60) days from the date of the Mediation Notice, either party may require such matter to be submitted to non-binding arbitration in Palo Alto, California, underthe rules of the American Arbitration Association (~AAA"). Any action of any kind by either party arising out of this Agreement must be commenced within two (2) years from the date the right, claim, demand or cause of action shall first arise° 19.2 No Termination or Suspension of Services. Notwithstanding anything to the contrary contained hereih, and even if any problem or other dispute arises between the parties and regardless of whether or not it requires at any time the use of the dispute resolution procedures described above, in no event nor for any reason shall ea interrupt or suspend or terminate the provision of Services to CITY or perform any action that prevents, impedes, or reduces in any way the provision of Services or CITY’s ability 19 020710 sm 0032552 to conduct its activities, unless: (i) authoritY to do so is granted by CITY or conferred by a court of competent jurisdiction; or (ii) this Agreement has been terminated in accordance with Section 6 and ea has performed its obligations with respect to a Disentanglement; or (iii) CITY has failed to pay ea undisputed invoices that are past due in excess of sixty (60) days after receiving notice from ea of such delinquency° In the event that CITY fails to make such full payment within said 60-day period, ea shall grant to CITY an additional 30 days to render full payment provided that CITY requests such additional 30 days. SECTION 20.MISCELLANEOUS PROVISIONS 20.1 This Agreement will be governed by the laws of the State of California. 20.2 In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California or in the United States District Court for the Northern District of California in the County of Santa Clara, State of California. 20.3 The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys’ fees expended in connection with that action. 20.4 If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 20.5 All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules that, from time to time, may be referred to in any duly executed amendment.hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement. 20.6 This Agreement may be executed in any number of counterparts, each of which will be an original, but all of which together will constitute one and the same~ instrument. 20.7 This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. If CITY is required to sign an order form or other preprinted document from ea, the parties understand and agree that to the extent of any conflict between such other form or document and this document, this document shall prevail. This document may be amended only by a written instrument, which is signed by the parties. 020710 sm 0032552 2O P.2 IN W~TNESS WHEREOF, the partSes hereto have by the£r duly authorized repr~sentatlves executed this Agreement on the date flrs~ above’written. ATTEST:CITY OF PALO ALTO C~ty Cl~k APPROVED.AS TO FOR~: Assistant Ci~ Manag~ Attachments : EXHIBIT "A" : EXHIBIT "B,, : EXHIBIT "C" : EXHIBIT "D" : Mayor Scope of Services Payment Schedule Insurance Rmquirements Nondiscrimination Compliance Form 21 CERTIFICATE OF ACKNOWLEDGEMENT (Civil Code § 1189) On ~[~1~ I~ ,2002, before me, ~zgil~ ~. MgMJ[-~@ a Notary Public in and for said County and State, personally appeared ~ ~. ~~ , personally known to me or prove~ to me.on th~ b~sis of satisfactory evidence to be the person(~ whose name(~ ~s~Ya~/e subscribed, to the within instrument a~ud. ack’~owledged torte t’-~’ha~ ~s~e/t~y executed the same.in .i~h~r/th~r authorized capacity(i~), and that by(~ll~/~4~_/the~r signet~ ~re(~ on the instrument the pZ %rson~, or the e~--~ntity upon behalf of whz ~ich the person(~ acted, executed the instrument. WITNESS my hand and official seal. 020710 sm 0032552 22 JUL. iT.2002 ~:53PM EA CONSULTING N0.544 CRRT~¥~CATE OF ACKNOWLEDGEMENT (C&vll CodQ ~ i18%) STATE OF --~~Z~ __ )~) ss. COUNTY 0£) a Notary ~$ ~’n~nd Sot said County and Sta~e, p~rsonally or proved to me on the basis of satisfactory evid%nce to be the person(a) whose name(s) Is/are s~bscribed to the within instrument and acknowledged to me that he/she/they executed the same in hls/her/thelr au~horlzed capaclty(les), and that b~’ his/her/their sisnaturs(s) on ~he instrument the person(s), or the entity behalf of which the person(s) acted, executed the ihstrument, WITNESS my hand and official seal~ 23 Statement of Work For Enterprise Financial System Implementation For the City of Palo Alto Final Version , Submitted July 10th, 2002 By ea-inc.com consulting "ea , inc. EXHIBIT "A" City of Palo Alto Statement of Work 1.0 1.1 1.2 1.3 1.4 2.0 2ol 2.2 3.0 3.1 3.2 4.0 4.1 4.2 4.3 s._ 0 6.0 6.1 6.2 7.0 7ol 7°2 7°3 7,4 Executive SummarF ......................................................................................4_ Objective of the Project ....................................................................................4 Scope of Implementation: .................................................................................4 Project Timeline/High Level Project Plan: .....................................................7 Project Roles & Responsibilities: ....................................................................9 Technology Architecture ............................................................................11 Infrastructure ..................................................................................................11 Data Conversion and Interfaces ....................................................................13 Implementation Methodology, Staffing, and Work~ ...........................23 The Implementation Team .............................................................................23 The Implementation Plan ...............................................................................27 Trainin~ ........................................................................................50 Training Plan ...................................................................................................63 Classes ..............................................................................................................63 Resources .........................................................................................................73 Project Assumptions ...................................................................................74 Software Functionalit~ ...............................................................................77 Software ...........................................................................................................77 Customer Needs ..............................................................................................77 Additional Descriptive Information ...........................................................78 Future Upgrades .............................................................................................78 Third Parties ....................................................................................................78 Third Party Solutions .....................................................................................78 Reports .............................................................................................................79 2 City of Palo Alto Statement of Work 8.0 8.1 8.2 8.3 Process In[ormation ...................................................................................80 Issue Management .........................80 Vacation / Absence Approvals ..................." ....................................................81 Change Request Process .................................................................................82 3 City of Palo Alto Statement of Work 1,0 Executive Summar The City of Palo Alto has selected SAP software as their Enterprise Resource Planning (ERP) package° The City has engaged ea consulting, inc (%a’). as their SAP implementation partner. This project is a joint effort between The City and ca. ea and the City recognize that both parties are required to work together in order to successfully implement Phase I by June 30, 2003, and Phase II by December 31,, 2003. 1.1 Ob,iective of the Proiect. The objective of the project is to replace current business systems with a robust, state of the art Enterprise Resource Planning package that will help the City realize the potential of their information as they move forward, ea will partner with the City to successfully implement the SAP software in conjunction with redesigning critical business processes to best leverage the new platform. 1.2 Scope of Implementation: ea will implement the SAP suite of applications as they relate to the requirements within the Functional Matrix. Included in the SAP implementation are the following modules: ¯Financial Accounting (FI) including Funds Management (FM), Controlling (CO) ¯Materials Management (MM) for purchasing and inventory ¯Plant Maintenance (PM) ~Human Resource/Payroll (HR/Payroll) ¯Sales and Distribution (SD) for billing ~Project Systems (PS) for projects and grant management. Financials - SAP supports general ledger, fund and sub-ledger accounting, asset and capital project accounting, administration of fixed.assets; management of capital projects, accounts payable, and accounts receivable. SAP supports real time financial reporting and analysis with online reporting tools to retrieve the real-time financial status of your organization. Sub-modules to be included in the implementation are: 4 ea.inc.com City of Palo Alto Statement of Work General Ledger Accounts Payable Accounts Receivable Funds Management Asset Management Special Purpose.Ledger Controlling Cash Management/Treasury Budgeting Budget Control - SAP will also assist your organization with creating budgets in a decentralized environment and establishing budget hierarchical levels for management purposes. All commitments and actual postings on the expenditure side are checked real-time for available budget on the corresponding budgetary items. In addition SAP supports funds reservation and encumbrances, cash and accrual based budget execution, workflow enabled commitment handling, and real time budget status reporting. Project Systems/Grants - SAP handles the approval/award of contract budgets, accounting and billing, cost sharing and reporting requirements associated with grants. The project system assists with project definition, budgeting, tasks and activities structure definition, time, milestone and resource planning/scheduling, forecasting and resource utilization, plan/actual comparisons, and resource related billing. Human Resources/Payroll - SAP will also assist Human Resources/Payroll staff by handling all the basic HR processes of personnel, employee information management, and your payroll processes and support regulatory requirements. SAP will assist you in managing and communicating organization structure and policy information, as well as ensuring effective time management strategies and convenient tracking, monitoring, record keeping, and evaluation. Another critical function is the handling of your required HR legal reporting functions. 5 City of Palo Alto Statement of Work The HR/Payroll module implementation will include the following sub modules: * Payroll . Personnel Administration Personnel Development Recruitment Time Evaluation Benefits Organizational Management Position Control Included in the Human Resource/Payroll implementation will be Employee Self Service (ESS) and Cross Application Time Sheet (CATS). ESS will empower the City’s employees to perform basic benefit and compensation functions like switching health plans, checking payment contracts, etc. without having to make requests to the Human Resources department. CATS allows the employee to post time to multiple projects and activities within the City. Purchasing o SAP streamlines requisitioning and purchasing of indirect, or non- production goods and services, including maintenance, repair, and operations items, as well as such items as office supplies, machine parts~ janitorial goods, repair services, professional services, travel services~ and training and education. The purchasing module includes integration into the inventory tracking system. This will allow you to track inventory levels and know when certain items need to be purchased or restocked. Routing of purchase requisition approvals will be automated via workflow and e-procurement will be available to your purchasing staff in order to reduce time spent by employee and cost of goods purchased. Plant Maintenance - SAP will also assist the City in all aspects of building, plant and fleet maintenance° Included in this module is a maintenance work order system that is automated and integrated with the inventory and warehouse module, allowing your organization to more fully track and utilize inventory, maintenance reporting, and control of maintenance budgets and planning. The Plant Maintenance module will interface with your GIS system allowing for more effective work order management and maintenance of facilities and roads within the City° 6 ea.inc.com City of Palo Alto Statement of Work Billing - SAP will assist the City in all aspects of billing using the Sales and Distribution (SD) module. This module is the billing engine of SAP and will allow the City to bill from various departments in an integrated system whether the billing is for services or contracts the City has with other organizations. 1.3 Proiect Timeline/High Level Proiect Plan: ea will implement the SAP suite of applications using a two phased approach. This approach will help mitigate the risk levels for the City by spreading the effort across a more manageable timeframe. Phase I will include the implementation of the SAP Financials, Purchasing, Inventory, and Plant Maintenance applications. Phase II will include the implementation of the SAP Human Resources and Payroll applications. The following modules may be employed to meet requirements listed in the .functional matrix. For the scope of this project, it is not intended that all the functionality in each module will be implemented, just the functionality prescribed in the matrix. PhaseI (10 months) ¯ Financial Management ¯ Funds Management ¯Controlling . Budgeting ¯General Ledger . Special Purpose Ledger o Asset Management ¯Accounts Payable ¯Accounts Receivable ~ Cash Mgmt/Treasury ¯Project System ¯Plant Maintenance ¯ Materials Management ® Purchasing ¯ Inventory Management ¯ Sales and Distribution 7 City of Palo Alto Statement of Work Phase II.(8 months) ¯ HR ¯ Payroll ¯ PA ¯ Organization Management ¯ CATS ~ Position Budgeting e ESS ¯ Time Evaluation ¯ Benefits ¯ Work Flow . Recruitment ¯ Personnel Development Phase I will formally begin on Tuesday, September 3rd, 2002 with the final two weeks of Project Preparation Activities. During this activity stage ea creates the project charter, establishes the working environment, determines the system landscape, and assists in the hardware procurement process. This is actually the formal commencement date for the project. Because of the importance of this project to the City, it is anticipated that the project manager from both ea Consulting and the City will begin the detailed project planning in August° They wil! also mobilize key members of the City’s team during that month to undergo familiarization training with methodologies and tools, and to jointly develop standards for the project° The ea basis consultants will also begin working with the City technical team to insure an environment is ready for the team at the formal start of the project. The next major activity is Business Blueprint, scheduled to begin on Monday, September 16tho Here ea begins conducting steering committee meetings and team meetings, ea initiates organizational change management, design the training plan, setup the system environment, system administration policies, and begin the business process definitions, ea anticipates the completion of Business Blueprint on November 22ha. Realization is the longest stage of the project, beginning on December 3rd, and completing on May 30th, 2003. During Realization, ea will begin to create the training materials, design the workflow, develop the system test plans, establish user roles and authorities, configttre the system, begin integration testing and begin delivering end user training. The Final Preparation stage accomplishes exactly what ea-inc.com City of Palo Alto Statement of Work the name implies. The last of the end user training required for go-live.is completed, support plans are refined, and the cutover planning is both validated and executed. The next important event is Go-Live. ea is expecting that Phase I will go-live on June 30th, 2003. ea anticipates providing some post go-live support and post go-live training assistance as detailed in its proposal. Phase II will begin on Monday, May 5th, 2003 with Project Preparation Activities. The same methodology (ASAP) is used during this phase as was utilized in Phase I. The primary difference in the Project Preparation stage for this phase is that all of the development work done in the first phase can be used again. In fact, The City will be in a better position to understand the methodology having utilized it over the past 9 months. Elements specific to the second phase, like refining the initial project plan, and orienting any members new to the team, can normally be accomplished in a one day "quick start" seminar. As such, the Blueprint Activity can begin on May 5th or 6th’ ea will map out the business processes for the Human Resources, Payroll, and work flow requirements. During this stage ea will also map out the Change Management strategies. The Business Process definitions should be completed around May 18th. Workshops will have been conducted during this activity step. On June 30th ea anticipates the Realization activity to begin. Training materials, work flow development, system testing and final configuration testing should be completed by November 30th. The final preparation activities, including the completion of user training, integration testing, and system management will be finished on December 31st and Phase II will go live in time for the New Year. 1.4 Pr_gp_ject Roles & Responsibilities: Key to the success of an SAP implementation is a willingness on the part of the City to establish clear internal ownership of their system. As a general philosophy, there are tasks that will be performed by the City, tasks that will be performed by ea consultants, and tasks that are shared between the two partners. ea’s role will be to perform .all technical tasks pertaining to implementing SAP. Because this system will belongs to the City, knowledge transfer that will enable the City’s team to run this system on their own is a critical aspect of the project. As ea.inc.con’~City of Palo Alto Statement of Work such, it is important for many of these technical responsibilities to be transitioned over the course of the project. Keeping this in mind, these are the high level responsibilities ea envisions for the project: Data conversion (City is responsible for the data, ea for the conversion process) Interfaces (City is responsible for the data and the legacy technical process, ea owns the SAP technical process) end-user training (City) configuration (ca) implementation methodology (ea) testing (City) communication (City) change management (City) technical management (ea, with a transition to City) application support (SAP) database administration (ea, with a transition to City) hardware maintenance (City) Roles and responsibilities are further defined and clarified in later sections of this document. 10 City of Palo Alto Statement of Work 2.0 ~ Architecture 2.1 Infrastructure 2.1.1 Definition of Infrastructure Required to Minimally and to Optimally Deploy the System (Relevant for SAP R/3 Release 4.6C). Dev QA/Test Production Network tNT£RNETDay R3 DB/Cl e.P rocu rem en t Dev Server Dev/QA ITS Server Phase II Dev/QA Portal Server AS AP/Ffle Server QA R3 DB/CI Server e.Procuremeni QA Server ~~Production ¯R 3 D B/CI S erver Pro du©tlon R3 App Servers e.Procurem en t Production Server Production Portal Server Production ITS Phase II Production ITS W Gate Server~ (as L enabled)PhlQe [) DB . Database CI - Central Instance 11 City of Palo Alto Statement of Work Optimal Phase I Desktop Requirements: Windows 2000 Windows 98/NT 4°0 P200+128MB 280MB 1024x768 128MB 280MB 1024x768 Minimum Phase I Desktop Requirements: PC P200+96MB 140MB 800x600 64MB 140MB 800x600 Minimum Requirements for Start-up: Windows 2000 P200+ 96 MB 140 MB 800x600 Windows 98/NT P133 64 MB 140 MB 800x600 4.0 Above recommendations are as per SAP OSS note 26417, SAPGUI Resources: Hardware and software. 12 ea,inc.com City of Palo Alto Statement of Work 2.2 Data Conversion and Interfaces General Assumptions: For conversion effort, ea will provide the City with the different conversion file templates for all the needed SAP modules and will assist them in identifying legacy data fields to be converted based upon both SAP best practices, and ea’s knowledge of the industry solutions. The City will be responsible for developing the legacy system file extract programs needed to extract, data from their legacy systems into the conversion file templates, ea assumes that files provided by City have been reviewed and cleansed by the City to ensure "clean" data. For the Interfaces, ea will use the flat file approach as a medium between SAP and non-SAP systems wherever applicable and that ea will be responsible for getting the data from the flat file into SAP. On the other hand, the City will be responsible in putting the data from the non-SAP system into the flat file. To illustrate: Definition of terms: Inbound = data going into SAP Outbound = data going out of SAP The City will provide 2 ABAP programmers (FTE) at the beginning of the project. They will assist in the development of ABAP programs. The estimates provided herewith are based on initial assessments only and are subject to change during the Blueprint Phase when detail requirements are established. Furthermore, the estimates are solely ea’s estimates side only and do not include the effort that will be needed by the City. 13 City of Palo Alto Statement of Work 2.2.1 Interfaces The City has identified a number of interfaces that will need to occur between the City’s pre-existin~ legacy systems and the SAP system. The table below summarizes these interfaces. Lawson (HR and Payroll) 3CT Customer Information System ’GIS Dynix Library System CLASS Registration system BODS (Imaging and cataloguing) Permit Tracking System Chameleon POS application CORE POS application haterface to Aleuron budget publication software Informix on ttP Unix Oracle on I-IP Unix Oracle on Win NT Proprietary system, I-IP- UX Oracle on Win NT haformix on W~ NT Oracle on Win NT Oracle on Win NT Oracle on Win NT I II II ’ I Temporary interface until SAP HR!Payroll is up and running. Work orders and functions which would benefit from a spatial perspective would requir~ an interface to the City’s GIS database. There is a need to interface accounting transactions at the Library Creates A/R journals that impact the GL Revenue collections interface No Lawson HRiPayroll 1. Work: Lawson HR and Payroll (temporary Interface until SAP HR/Payroll is operational.) Assumption: 2 main interfaces needed - (a) Payroll posting (inbound) to FI - post the payroll expenses to FI/CO, to GL accounts and cost centers. (b) Payroll encumbrance (inbound) to FM - interface payroll to Funds Management to encumber the funds. Division of Responsibilities between ea and City: ea: Functional Consultant to design the specs and define the data mapping format for the flat file; ABAP Consultant will write the upload program(s) that will extract the imported data from the flat file and update then necessary SAP tables. City: Business Analyst or Key User to identify the non-SAP legacy fields that are needed to map in the flat file. Non-SAP system programmer will write the program(s) that will extract the data for export into the flat file. The Key User and the 14 ea-inc.com City of Palo Alto Statement of Work programmer are responsible for ensuring that the data extracted are accurate based upon the data exchange mapping requirements. Estimated Hours to Complete: 240 hours for the design, mapping, coding, and testing. SCT Customer Information System 1. Work: Interface with the SCT CIS system to impact the GL with utility billing data is a permanent interface as replacement of CIS is not part of this project. Assumption: Interface (inbound) to SAP FI/CO - GL from SCT CIS system Division of Responsibilities between ea and City: ca: Functional Consultant to design the specs and define the data mapping format for the flat file; ABAP Consultant will write the upload program(s) that will extract the imported data from the flat file and update then necessary SAP tables. City: Business Analyst or Key User to identify the non-SAP legacy fields that are needed to map in the flat file. Non-SAP system programmer will write the program(s) that will extract the data for export into the flat file. The Key User and the programmer are responsible for ensuring that the data extracted are accurate based upon the data exchange mapping requirements. Estimated Hours to Complete: 120 hours for the design, mapping, coding, and testing. GIS system 1. Work: Interface with the City’s GIS system is necessary to provide critical information for spatial functionality such as work orders (e.g., providing property addresses for a work order). Assumption: Interface (inbound) of critical information from GIS into SAP when generating work orders, i.eo property address. (Other spatial functionality that may be needed is unknown at the moment.) 2.Division of Responsibilities between ea and City: 15 City of Palo Alto Statement of Work ca: Functional Consultant to design the specs and define the data mapping format for the flat file; ABAP Consultant will write the upload program(s) that will extract the imported data from the fiat file and update then necessary SAP tables. City: Business Analyst or Key User to identify the non-SAP legacy fields that are needed to map in the fiat file. Non-SAP system programmer will write the program(s) that will extract the data for export into the flat file. The Key User and the programmer are responsible for ensuring that the data extracted are accurate based upon the data exchange mapping requirements. Estimated Hoursto Complete: 140 hours for the design, mapping, coding, and testing in generating work orders. Dynix Library System 1o Work: The Dynix Library System will provide A/R data from the library which will impact GL. Assumption: Interface (inbound) of Dynix Library System’s A/R data into SAP FUCO - GL. Division of Responsibilities between ea and City: ca: Ftmctional Consultant to design the specs and define the data mapping format for the flat file; ABAP Consultant will write the upload program(s) that will extract the imported data from the flat file and update then necessary SAP tables. City: Business Analyst or Key User to identify the non-SAP legacy fields that are needed to map in the flat fileo Non-SAP system programmer will write the program(s) that will extract the data for export into the flat file. The Key User and the programmer are responsible for ensuring that the data extracted are accurate based upon the data exchange mapping requirements. Estimated Hottrs to Complete: 120 hours for the design, mapping, coding, and testing. 16 City of Palo Alto Statement of Work CLASS Registration system 1. Work: Recreation registration system that would generate A/R journals for posting to the G/L. Assumption: Interface (inbound) of CLASS’ generated A/R journals for posting into SAP FI/CO - GL. Division of Responsibilities between ea and City: ca: Functional Consultant to design the specs and define the data mapping format for the flat file; ABAP Consultant will write the upload program(s) that will extract the imported data from the flat file and update then necessary SAP tables. City: Business Analyst or Key User to identify the non-SAP legacy fields that are needed to map in the flat file. Non-SAP system programmer will write the program(s) that will extract the data for export into the flat file. The Key User and the programmer are responsible for ensuring that the data extracted are accurate based upon the data exchange mapping requirements. Estimated Hours to Complete: 120 hours for the design, mapping, coding, and testing. BODS 1. Imaging and Tracking Work: BODS will be interfaced to SAP in order to provide imaging functionality. This would utilize the basic records management functions to replace image storage and retrieval that is currently utilizing Informix and Optical disk. Assumption: Look into the use of Document Management System (DMS) functionality of SAP to be able to retrieve image file from BODS. (Note: SAP does not have imaging capability. The City should provide the replacement in case the decision is not to continue utilizing the existing lnformix and Optical disk.) Division of Responsibilities between ea and City: ca: Functional Consultant to look into setting-up the DMS functionality of SAP and define the path to the file server of BODS. A new numbering scheme may be introduced in 17 oo. .0.0o. City of Palo Alto Statement of Work o identifying the image document. Depending on the final requirement this may or may not need any ABAP programming. City: Business Analyst or Key User to provide a centralized network file server of BODS where the image document can be retrieved. Estimated Hours to Complete: 120 hours for the design, mapping~ coding, and testing. Go Permit 1. ° o Tracking System Work: The Permit Tracking System will be interfaced to SAP for posting permit fees received to the GLo Assumption: Interface (inbound) of Permit Tracking System’s posting permit fees into SAP FI/CO - GL. Division of Responsibilities between ea and City: ca: Functional Consultant to design the specs and define the data mapping format for the flat file; ABAP Consultant will write the upload program(s) that will extract the imported data from the flat file and update then necessary SAP tables. City: Business Analyst or Key User to identify the non-SAP legacy fields that are needed to map in the flat fileo Non-SAP system programmer will write the program(s) that will extract the data for export into the flat file. The Key User and the programmer are responsible for ensuring that the data extracted are accurate based upon the data exchange mapping requirements. Estimated Hours to Complete: 120 hours for the design, mapping, coding, and testing. Chameleon POS application 1. Work: The Chameleon point of sale system will generate cash receipt journals for the G/L. Assumption: Interface (inbound) of POS’ generated cash receipts journals into SAP FFCO - GL. 18 ea-inc.com City of Palo Alto Statement of Work Division of Responsibilities between ea and City: ca: Functional Consultant to design the specs and define the data mapping format for the flat file; ABAP Consultant will write the upload program(s) that will extract the imported data from the fiat file and update then necessary SAP tables. City: Business Analyst or Key User to identify the non-SAP legacy fields that are needed to map in the flat file. Non-SAP system programmer will write the program(s) that will extract the data for export into the flat file. The Key User and the programmer are responsible for ensuring that the data extracted are accurate based upon the data exchange mapping requirements. Estimated Hours to Complete: 120 hours for the design, mapping, coding, and testing. CORE 1. POS application Work: The CORE point of sale system will generate cash receipt journals for the G/L. Assumption: Interface (inbound) of POS’ generated cash receipts journals into SAP FI/CO - GL. Division of Responsibilities between ea and City: ca: Functional Consultant to design the specs and define the data mapping format for the flat file; ABAP Consultant will write the upload program(s) that will extract the imported data from the fiat file and update then necessary SAP tables. City: Business Analyst or Key User to identify the non-SAP legacy fields that are needed to map in the flat file. Non-SAP system programmer will write the program(s) that will extract the data for export into the fiat file. The Key User and the programmer are responsible for ensuring that the data extracted are accurate based upon the data exchange mapping requirements. Estimated Hours to Complete: 120 hours for the design, mapping, coding, and testing. 19 City of Palo Alto Statement of Work Jo Interface to Aleuron budget publication software° 1. Work: Interface of SAP to Aleuron budget publication software. The Aleuron software need only receive data from SAP to publish a budget and does not send back new information. Assumption: Interface (outbound) needed available data from SAP into Aleuron software for publishing budget. o Division of Responsibilities between ea and City: ca: Functional Consultant to design the specs and define the data mapping format for the flat file; ABAP Consultant will write the download program(s) to export the SAP data into the flat file. City: Business Analyst or Key User to identify the non-SAP legacy fields that are needed to map in the flat file. Non-SAP system progranmaer will write the program(s) that will extract the data from the flat file for import into Aleuron. o Estimated Hours to Complete: 160 hours for the design, mapping, coding, and testing. 2.2.2 Data Conversion ea wholeheartedly agrees with the City’s position on minimizing data conversion and believes that the migration of master data and beginning balances is absolutely needed, but detailed transaction history is not required and can be eliminated. Work: Convert existing legacy (master and beginning balance) data needed into SAP. Assumption: Prepare programs to extract and upload the available legacy data needed for the implementation of SAP - Financial (FI/CO), Logistics (PM, MM, SD, PS), and HR/Payroll modules. Division of Responsibilities between ea and City: ca: Functional Consultants and ABAP Consultants to provide the conversion file templates needed for each module in SAP° They will assist in identifying legacy data fields to be converted based 20 City of Palo Alto Statement of Work 2.2.3 upon both SAP best practices, and ea’s knowledge of the industry solutions. The ABAP Consultant will write the programs to extract the legacy data from these conversion files for upload to SAP. City: The Business Analyst/Key User and legacy programmers will be responsible for developing the ~legacy system file extract programs needed to extract data from their legacy systems into the conversion file templates. They will ensure that the extracted legacy data are cleansed and accurate. In a situation where legacy data is not available, Business Analyst or Key User is responsible for creating the data needed for SAP. Estimated Hours to Complete: 1,780 hours for the design, mapping, coding, testing, and data uploading. FICO = 160 HRiPayroll = 980 MM = 240 PM = 180 PS = 100 SD = 120 Customizations There are no known "customizations" (i.e., functionalities that require changes to the source code in order to be delivered). There are, however, a .number of functional requirements that have been responded to as "M". While in most cases, these requirements can be met with additional configuration and / or process work arounds, there may cases where supplemental code, accessible via user exit, may need to be used. For RICE (Reports, Interfaces, Conversations, Enhancements) items ea is proposing a pool 4,000 ABAP hours in addition to the City’s two full-time, trained ABAP resources. Ea commits that these 4,000 hours are sufficient to complete all interfaces, data conversions, and reports in the scope of this project as well as all modifications for which the City and ea will agree during the project that there is no standard functionality available to meet the business requirement in question. If the City desires a modification as opposed to standard functionality, a RICE list item will be developed and prioritized 21 City of Palo Alto Statement of Work against other items on the list contingent on available ABAP hours in the pool. 2.2.4 Custom Report Development There are no known custom reports. It is assumed that standard SAP reporting, or use of a standard SAP tool like ABAP Query will be sufficient° If these standard tools prove to be insufficient, a custom report object will be added to the RICE list as described in section 2.2.3. ea will develop up to 10 custom reports within the scope of this project. It is understood that the development of these custom reports will serve as a vehicle for knowledge transfer to the City’s ABAP programmers and, as such, will focus on a cross section of difficulty levels and techniques geared toward providing them with the know-how to develop additional reports on their own. It is also understood that ea may assign or delegate to the City’s ABAP programmers, certain tasks related to these 10 reports as part of this knowledge transfer process. 2.2.5 Procedure for Dealing with Customizations, Interfaces, Data Conversions, and other Modifications that come up during the Project, but are currently unknown. Though ea would like to have a complete understanding today of everything that will transpire over the course of this project, ea’s experience has shown that there is usually some technical work that surfaces unexpectedly that must be done in order for the implementation to be successful. All technical development work, including that which is currently unidentified, work be appropriately positioned in the RICE (Reports, Interfaces, Conversions, Enhancements) list by the project management team after determining how the new requirement fits into the cttrrent priorities. Project management will determine how to proceed from this point. The work, depending on the positioning on the RICE list will: Become one of the defined technical objects currently in scope (one of the 10 reports, 10 interfaces, master data conversions, etc) that falls under ea control and responsibility or Become one of the additional technical objects that is produced by the City’s ABAP programmers after knowledge transfer is accomplished through the development of the initial set of objects. 22 City of Palo Alto Statement of Work 3,0 Implementation Methodolo Stam and Work lan The Implementation Team Organizational Chart Project Organization, Steering Committee C. 1 Project Manager C.2 Financial Team Lead C.3 Financial Key User C.2 Purchasing Key User C.2 Inventory Management Key User C.2 Sales and Distribution Key User C.2 Plant Maintenance Key User (2) C.2 Project Systems Key User C.2 HR / Payroll Team Lead C.3 HR/Payroll Key User (2) C.3 HR/Payroll Key User C.2 Change Management / Training Lead C,2 Training Developer (2) C.2 Basis Administrator C.2 Work Flow Adminisrator C.2 ABAP Developer (2) V.1 V.2 V.2 Project Manager Financial Team Lead V.3 Financial Consultant Purchasing / IM Consultant V.2 V.2 V.2 V.2 V,3 V,3 V.2 V.2 V.3 V.2 V.2 V,3 V.3 Sales and Distribution Consultant Plant Maintenance Consultant Project Systems Consultant HR / Payroll Team Lead HR / Payroll Consultant (2) HR / Payroll Consultant (ESS) Change Management/Training Consultant Basis Consultant Portals Consultant (Basis)) Work Flow Consultant Technical Development Lead / Architect Web Studio Developer ABAP Developer (1-3) 3.1,2 Duties of Team Members Specific Roles and Responsibilities The City Steering Committee is responsible for providing a vision of the City’s long-term goals and objectives. They will aid in the resolution of issues that cannot be resolved within the team, and in general provide support and high-level direction to the accelerated SAP project throughout the organization. The group consists of key City directors and staff as well as an ea Project Manager. This group will serve as the project oversight committee and should be able to empower the Project Team to make decisions in a timely manner. 23 City of Palo Alto Statement of Work City Project Manager (Project Manager) - This person’s responsibilities will be to work with the ea Project Manager to construct and maintain a working project plan that meets the City’s objectives. The Project Manager will be responsible for making sure there are adequate City resources and related availability to ensure the Project proceeds with minimum delays. He will handle the day-to-day management of all City internal resources and ensure that the appropriate subject matter experts are present during the Blueprint activity and throughout the both major phases. He will receive weekly updates and project status reports from It is anticipated that Ron Fong will serve this role for the City. ea’s Project Manager will have the "hands-on" responsibility for ensuring the Project is progressing well. He will ensure that the City is informed of issues and concerns on a timely basis and will be responsible for providing status reporting to both the City and the Project Executives. This person will coordinate the staffing and roles for the various activities of the implementation, making sure there are adequate resources available to meet the planned target dates. This individual will provide day-to-day management oversight for the combined project team. As the implementation progresses, the Project Manager will continue to monitor and maintain the plan to ensure target completion dates are met, will help coordinate the testing activities of the Project and will ensure the construction of the test plan, and the coordination of the training program for the End Users. ea Module Leads - These functional consultants are responsible for identifying and understanding the City’s requirements as noted in the functional matrices, mapping those requirements to the SAP system, developing the system design, and identifying and documenting adaptations that may be required throughout the Blueprint activity. During the implementation activities, these consultants will also be responsible for testing the developed product, participating in integrated testing prior to system rollout, training, and developing user documentation. ea Technical Lead / Architect - The overall coordination of the technical tasks associated with the Project will be handled by the Technical Lead. The Technical Lead provides level of effort estimates for any technical work required during the implementation and will initiate specifications for systems modifications. He/she will also assist in the development of modifications and reports and will develop security structures. The Technical Lead will assist in the planning, development, and programming of conversions and interfaces. 24 City of Palo Alto Statement of Work ea Technical Consultants - The Technical Consultants offered in ea’s proposal will work closely with the City’s technical team to design data mapping schematics; construct conversion, interface, and report programs; perform modifications; and oversee and fine-tune batch processes. Through its joint team approach, this process ensures appropriate knowledge transfer to the City’s technical staff. ea Change Management / Training Consultant - The Change Management / Training Consultant offered in ea’s proposal will work closely with the City’s Change Management / Training lead to plan and develop the Change Management and Training programs for the project. This is a hands-on advisory role where the consultant is expected to provide guidance in all aspects of training and change management, provide templates and examples in deliverable areas, and participate heavily in the preparation of those deliverables with the ownership remaining with the counterpart from the City City Change Management / Training Lead - Under the guidance and support of the ea Change Management / Training Consultant, will be responsible for lead all aspects of Change Management/Training effort, including: Set up T/CM project plan Develop methodology alignment Execute assessments (training and change management) Develop and deliver Leadership Forums Develop, deliver and execute Deliver initial city-wide communications Deliver City-wide project Introduction Develop Change Impact Estimations Develop and Acceptance Management program Develop and execute External Communications devices Develop Change Agent program Identify Change Agents Monitor Communications results Develop and implement Team Building program Develop Business impact map Develop and deliver Role mapping workshop Develop risk assessment Develop and implement Sponsorship strategy Coordinate Project team training Develop change management intervention strategy Develop acceptance management strategy Develop QA review strategy Develop and present Change Agent workshop 25 City of Palo Alto Statement of Work ® ® ® ® ® ® Develop Develop Develop Develop Develop Develop Develop Develop and implement training and documentation standards and deliver training and documentation content and deliver training and documentation outlines and deliver training and documentation templates and implement training and documentation review process and execute evaluation review process mad deliver Course developers workshop and execute training schedule Develop and deliver train the trainer workshop Ensure training client loaded and tested Monitor End-user training sessions Validate Business Process Procedures (BPP) development by Key Users with support from ea consultants. City Training Developers - will support the City’s Change Management / Training Lead in the development and delivery of training and change management programs° They will work closely with the key users gaining a functional perspective through that interaction. These training responsibilities are further broken down as follows: Develop BPPs by adding content to basic SAP output Identify training scenarios and associated training data Load training client with required data Subject Matter Expert for training development questions Test training data Attend Train the Trainer program Conduct end-user training, both informal and classroom training where appropriate City Core Team - The established Core Team will serve as the primary partners for ca/SAP consultants. They will participate in all activities and tasks and will share in the development of Deliverableso This approach will best leverage the resources of both teams, assist in the transfer of knowledge, and deliver a pragmatic, achievable solution. City Key Users - will become the functional expert users in their respective areas through iterative involvement with the core project team through the design and construction of the system° As such they also will play a critical role in training other end users in their work areas° The Key Users’ training involvement will closely resemble that of the training developers, but will be more focused on the areas of scenarios and training data, providing a blend of subject matter expertise and SAP transactional knowledge. 26 City of Palo Alto Statement of Work City Subject Matter Experts and Systems Support Staff- Financial, Payroll, and Human Resource support personnel must be available for fact-finding and evaluation sessions. The Implementation Plan Implementation Methodology The Accelerated SAP (ASAP) methodology will be employed in the context of TeamSAP. The ASAP approach is a proven methodology that reduces the time and cost of an implementation while maximizing the utilization of valuable resources. The ASAP methodology comprises five distinct steps as outlined below. A 10 month project timeline from start of Project Preparation to Go-Live and Support is proposed for the R/3 module while an 8 month is proposed for the second phase. ea and the City will assign co-project managers to address user issues and insure the integrity of the process as well as insure timely decision-making. PROJECT PREPARATION (Phase I) 10 days 9/3/02 - 9/16/02 Initial Project Planning Project Directors Create & issue project charter Review & refine implementation strategy Establish project team working environment Prepare project plan Determine project team training plan Project Directors Define system landscape Project Directors Conduct kick-off meeting Quality Check Establish Project Procedures Project Kick-off 1)High-level Project Plan 2)High-level Scope Definition 3)Project Charter 27 City of Palo Alto Statement of Work BUSINESS BLUEPRINT (Phase I) 40 days 9!i 6/02 - 11122/02 REALIZATION (Phase I) 130 days 12/2/02 - 5/30/03 Project Management Train Project Team Develop System Environment Define Business Org. Structure Define Business Processes Project Directors city Consultants city ea Basis. City Func. Consult. City Fune. Consult. Quality Check & Conduct project team status meetings Conduct Executive Committee meetings General project management Refine training schedule Attend Level 2 courses Perform post training skill assessment Create technical design Setup development environment Setup system landscape Establish system administration Initialize IMG Define organizational structure Schedule & conduct business req. workshops Complete business blueprint & baseline scope o Prepare end-user training planSi~-off 4) R/3 System installed 5) Baseline Scope 6) Business Process Master List 7) Business Blueprint ~ment Project Team Training System Management Pro.~ect Directors City Consultants city Basis Configuration - Baseline + Final Development Integration Test City Consultants End-user City documentation/training city Func. Consult. Project team status meeting Refine training schedule Attend project team training Review & assess post training skills Define service level commitment & QA environ Develop system test plans (stress/failover) Establish and generate authorization profiles Setup QA Environment Design productive system Setup production environment Baseline configuration Final configuration Reporting Layout sets Conversions Enhancements Application interfaces Intraoarea integration test End-to-end integration test Prepare end-user documentation dev, plan Create end-user documentation Develop end-user training materials Prepare for end-user training Quality Check & 8) Business process procedures completed 9) Training materials created 10) Authorizations defined 11) Technical Objects (RICE list) items programmed 12) Test cases / scripts prepared 13) Base / Final configuration tested 14) QA & Production environments created 28 ea.inc.com City of Palo Alto Statement of Work FINAL PREPARATION (Phase I) 20 days 6/2/03 - 6/27/03 Project Management End-user Training System Management Detailed Project Planning Cut-over Project Directors City City Tech. Consult. All Conduct team status/Executive Committee meeting General project management Prepare end-user training Conduct & review end-user training Establish productive system administrative Conduct system test Refine cut-over Refine product support plan City Perform cut-over to production system Tech. Consult.Final approval for going-live Quality Check & Si~n-off 15)Go-live / Cutover plan 16)System / Integration test 17)Legacy data converted 18)End-users trained GO-LIVE &Production Support City Provide production support 19) Cut over signoff SUPPORT Consultants via Validate live business process results 20) System performance (Phase I)pool of hours Optimize system use evaluation 10 days 6/30103 - 7111/03 CONTINUOUS CHANGE IPost Go-live Activities Follow-up training and review business benefits Define long term plans Perform on-going system operations Upgrade live system landscape PROJECT PREPARATION (Phase II) I day 5/5/03 - 5/5/03 Initial Project Planning Project Directors Refine project charter Review & refine implementation strategy Confirm project team working environment Update project plan Determine project team training plan Project Directors Define system landscape Project Directors Conduct kick-off meeting Quality Check Confirm Project Procedures Project Kick-off 1)High-level Project Plan 2)High-level Scope Definition 3)Project Charter BUSINESS BLUEPRINT (Phase II) 40 days 5/5/03- 6/28/03 Project Management Train Project Team Develop System Environment Define Business Org. Structure Define Business Processes Project Directors city Consultants City ea Basis. city Func, Consult. City Func. Consult. Conduct project team status meetings Conduct Executive Committee meetings General project management Refine training schedule Attend Level 2 courses Perform post training skill assessment Create technical design Setup development environment Setup system landscape Establish system administration Define organizational structure Schedule & conduct business req, workshops Complete business blueprint & baseline scope Prepare end-user training plan Quality Check & Sign-off 4) R/3 System installed 5) Baseline Scope 6) Business Process Master List 7) Business Blueprint 29 City of Palo AltoStatement of Work REALIZATION (Phase II) 110 days 6/30/03 - 11/28/03 Project Management Project Team Training System Management Project Directors City Consultants Configuration - Baseline + Final Development Integration Test End-user documentation/training city Basis City Fune~ Consult. City Consultants City Project team status meeting Refine training schedule Attend project team training Review & assess post training skills Define service level commitment & QA environ Develop system test plans (stress/failover) Establish and generate authorization profiles Set up QA environment Design productive system Setup production environment Baseline configuration Final configuration Reporting Layout sets Conversions Enhancements Application interfaces Intra-area integration test End-to-end integration test Prepare end-user documentation dev. plan Create end-user documentation Develop end-user training materials Prepare for end-user training Quali~heck & SiKn-off 8) Business process procedures completed 9) Training materials created 10) Authorizations defined 11) Technical Objects (RICE list) items programmed 12) Test cases / scripts prepared 13) Base / Final configuration tested 14) QA & Production environments created FINAL PREPARATION (Phase II) 20 days 1211103 - 12/31103 Project Management End-user Training System Management Detailed Project Planning Cut-over Project Directors City City Tech, Consult~ All City Tech, Consult. Conduct team status/Executive Committee meeting __General project management Prepare end-user training ’ Conduct & review end-user training Establish productive system administrative Conduct system test Refine cut-over Refine product support plan Perform cut-over to production system Final approval for going-live Quality Check & Sign-off 15)Go-live / Cutover plan 16)System / Integration test 17)Legacy data converted 18)End-users trained GO-LIVE & SUPPORT (Phase II) 7 days 1/1/04 - 1/9/04 Production Support city Consultants via pool of hours Provide production support Validate live business process results Optimize system use 19) Cut over signoff 20) System performance evaluation 30 City of Palo Alto Statement of Work 3.2.2 Deliverable Descriptions Our experience has shown us that the success of SAP implementations is tied directly to the level of ownership felt by the City. As such, most of the critical deliverables are actually owned by and are the responsibility of the City. ea fully expects to have to coach, mentor, and lead the City through the creation of many of these items, but promoting a clear sense of ownership on the part of the City ultimately enhances the understanding, and provides the benefit of future supportability. Phase 1 Deliverable Responsibility Target Project Preparation (8/1/02- 9/13/02) 1. High Level Project Plan ea ao MS Project Work Plan (Gantt)ea b. Resource Matrix ea owns, City participates owns, City participates owns, City participates 9/13/02 9/13/02 9/13/02 c. Org Chart d. Project Standards 2o High Level Scope Document 3. Project Charter a. Project Mission b. Business Drivers c. Business Measurements ea owns, City participates ea owns, City participates ea owns, City participates ea owns, City participates ea owns, City participates ea owns, City participates ea owns, City participates substantially 9/13/02 9/13/02 9/13/02 9/13/02 9/13/02 9/13/02 9113/02 d. Project Measurements ea Business Blueprint (9/16/02- 11/22/02) 4. Installed R/3 Dev System ao Server Sizing b. Order DEV machine co ID Network Requirements d. QA & PROD order timing eo ASAP Setup / authorizations f. SAP On-Line Doc. g. Setup DEV ho Apply support packs to DEV 5. Baseline Scope 6o Business Process Master List 7. Business Blueprint a, Executive Summary b. Enterprise Process Area Scope Doc c. Organization Structure d. Business Processes e. CI Templates f, Justification for RICE items g. Completed Technical questionnaire owns~ City participates ea owns, City participates ea owns, City participates City owns, ea guides ea owns, City participates ea owns, City participates ea owns, City participates ea owns, City participates ea owns, City participates ea owns, City participates City owns, ea guides City owns, ea guides ea owns, City participates City owns, ea guides ea owns, City participates ea owns, City participates ea owns, City participates lea owns, City participates City owns, ea guides ea owns, City participates substantially 9/13/02 9/27/02 9/20/02 9/20/02 9/20/02 9/20/02 9/20/02 9/20/02 9/27/02 9/27/02 10/21/02 10/28/02 11/22/02 11/22/02 11/22/02 11/22/02 11/22/02 11/22/02 11/22/02 11/22/02 31 City of Palo Alto Statement of Work Phase 1 Deliverable Responsibility Target o Bus Process Procedures (BPPs) ao SAP Transaction Procedures bo Enhancements Training Materials a. Needs Assessment b. Training Plan c. Training Program d. Training Curriculum City owns, ea guides ea owns, City participates substantially City owns, ea guides City owns, ea guides ea owns, City participates substantially ea owns~ City participates substantially ea owns, City participates substantially ea owns, City participates substantially 2/1/03 2/1/03 2/1/03 3/1/03 3/1/03 3/1/03 3/1/03 3/1/03 e. Build training materials from BPPs 10. Authorizations a. Security Strategy b. User Roles Design c. User Profiles Design d. Technical Development eo Unit Tests 11. Technical (RICE) Objects ao Create Prioritized RICE List bo Functional Specifications co Technical Specifications do Code Development e o Unit Tests 12. Integration Test Documentation a. High level Test Strategy bo Business Scenarios City owns, ea guides City owns, ea guides ea owns~ City participates substantially ea owns~ City participates substantially ea owns~ City participates substantially ea owns, City participates substantially City owns, ea guides ea owns, City participates City owns, ea guides ea owns, City participates substantially ea owns, City participates substantially ea owns, City participates substantially City owns, ea guides City owns, ea guides ea owns, City participates substantially City owns, ea guides 3/1/03 4/1/03 4/1/03 4/1/03 4/1/03 4/1103 4/1/03 5/1/03 5/1/03 511103 5/1/03 ,5/1/03 5/1/03 6/1/03 6/1/03 6/1/03 Co Process / Data Variants Def’med d. Detailed Test Scripts e. Unit Tests Final Preparation (6/2/03-6/27/03_0_ 13. Base /Final Config (tested) 14. Installed R/3 QA & Prod Sys 15° Go-Live / Cutover Plan 16o System / Integration Test 17o Data Conversion 18o End User Training 19o Final System Acceptance Go-Live and Support 20° System Performance Evaluation ea owns, City participates substantially City owns, ea guides City owns~ ea guides ea owns~ City participates ea owns, City participates ea owns, City participates substantially ea owns, City participates substantially ea owns, City participates substantially City owns, ea guides City owns, ea guides ea owns, City participates substantially 6/1/03 6/1/03 6/1/03 6/27/03 6/27/03 6/27/03 6/27/03 6/27/03 6/27/03 6/27/03 7/12/03 32 .a. .o.0om City of Palo Alto Statement of Work Phase 2 Deliverable Pro]ect Preparation (5/5/03-5/5/03) I. Updated Project Plan a. MS Project Work Plan (Gantt) b. Resource Matrix c. Org Chart d. Project Standards 2. High Level Scope Document 3. Project Charter a. Project Mission b. Business Drivers c. Business Measurements d. Prqiect Measurements Business Blueprint (5/5/03 -6/28/03) 4. Confirm R/3 Dev Environment a. Setup DEV b. Apply support packs to DEV c. ID Network Requirements d. QA & PROD order timing e. ASAP Setup / authorizations £ SAP On-Line Doe. 5.Baseline Scope 6.Business Process Master List 7.Business Blueprint a. Executive Summary b. Enterprise Process Area Scope Doc c. Organization Structure d. Business Processes e. CI Templates f. Justification for RICE items g. Completed Technical questionnaire Responsibility Ta rget ea owns, City participates ea owns, City participates ea owns, City participates ea owns, City participates ea owns, City participates ea owns, City participates ea owns, City participates ea owns, City participates ea owns, City participates ea owns, City participates ea owns~ City participates substantially ea owns, City participates ea owns, City participates ea owns, City participates ea owns, City participates ea owns, City participates City owns, ea guides ea owns, City participates City owns, ea guides City owns, ea guides ea owns, City participates substantially City owns, ea guides ea owns, City participates ea owns, City participates ea owns, City participates ea owns, City participates City owns, ea guides ea owns, City participates 5/5/02 5/5/02 5/5/02 5/5/02 5/5/02 5/5/02 5/5/02 5/5/02 5/5/02 5/5/02 5/5/02 5/5/02 5/5/02 5/5/02 5/5/02 5/5/02 ,5/5/02 5/5/02 6/28/03 6/28/03 6/28/03 6/28/03 6/28/03 6/28/03 6/28/03 6/28/03 6/28/03 6/28/03 33 City of Palo Alto Statement of Work Phase 2 Deliverable Realization (6/30/03-11/28/03) 8o Bus Process Procedures (BPPs) ao SAP Transaction Procedures bo Enhancements 9o Training Materials ao Needs Assessment bo Training Plan Co Training Program do Training Curriculum e o Build training materials from BPPs 10.. Authorizations ao Security Strategy b. User Roles Design c. User Profiles Design do Technical Development eo Unit Tests 11. Technical (RICE) Objects ao Create Prioritized RICE List b. Functional Specifications Co Technical Specifications d. Code Development e° Unit Tests 12. Integration Test Documentation ao High level Test Strategy b. Business Scenarios Co Process / Data Variants Defined d° Detailed Test Scripts eo Unit Tests Final Preparation (12/1/03 ~ 12/31/03) 13o Base / Final Config (tested) 14. Installed R/3 QA & Prod Sys 15. Go-Live / Cutover Plan 16. System / Integration Test !7. Data Conversion 18o End User Training 19. Final S~¢stem Acceptance Go-Live and Suppor~ 20. System Performance Evaluation Responsibility Target City owns, ea guides ea owns, City participates substantially City owns, ea guides City owns, ea guides ea owns, City participates substantially ea owns~ City participates substantially ea owns, City participates substantially ea owns, City participates substantially City owns, ea guides City owns, ea guides City owns, ea guides City owns, ea guides City owns, ea guides City owns, ea guides City owns, ea guides City owns, ea guides City owns, ea guides City owns, ea guides ea owns, City participates substantially ea owns, City participates substantially City owns, ea guides City owns, ea guides ea owns, City participates substantially City owns, ea guides ea owns, City participates substantially City owns, ea guides City owns, ea guides ea owns, City participates ea owns, City participates ea owns, City participates substantially ea owns, City participates substantially ea owns, City participates substantially City owns, ea guides City owns, ea guides ea owns, City participates substantially 7/31/03 7/31/03 7/31/03 8/31/03 8/31/03 8/31/03 8/31/03 8/31/03 8/31/03 9/30/03 9/30/03 9/30/03 9/30/03 9/30/03 9/30/03 10/31/03 10/31/03 10/31/03 10/31/03 10/31103 10/31/03 11/30/03 11/30/03 ! 1/30/03 11/30/03 11/30/03 11/30/03 !2/31/03 12/31/03 12/31/03 !2/31/03 12/31/03 12/31/03 12/31/03 1/12/04 34 ea.inc.com City of Palo Alto Statement of Work Deliverable #1 - High Level Project Plan Purpose: The Project Plan is used to determine the project milestones. Key elements to consider are company goals and objectives, project scope, desired implementation time frame, resource assignments (internal and external), project schedule, budget, organizational change management goals and objectives, ea will maintain the project schedule during the project. Length of Deliverable: Typically 20 -30 pages. Content." ® The deliverable material will comprise the following: Timeline Task Lists General resource assignments (detailed resource assignments recommended if MS Project is used or resource matrix Organization Chart for the project Project Standards & leveling not Delivery: available in both hard and soft format Implementation Activity/Task: Primarily developed during Project Preparation, but updated continuously (status, incremental definition, scheduling adjustments, etc.) throughout the project. Note that a baseline plan is available to capture original planning parameters. Completion Criteria: Baseline Plan is completed upon mutual agreement of City and ea project directors. The plan documents are actually updated dynamically during the project to reflect information developed during the present phase. Responsibility: ea project manager is responsible with "assistance" from the City project manager for creating the project plan. Ongoing maintenance of the plan is normally transitioned to the City as part of knowledge transfer that allows for a greater level of independence in future SAP initiatives. Participants: All project members Deliverable #2 - High Level Scope Document Purpose." Defines scope of the project at a high level for the benefit of communicating to senior management and providing clarification to the project team. As the RFP, Proposal 35 City of Palo Alto Statement of Work and Statement of Work documents contain much of the content required for this. City and ea project managers may agree to use these documents in place of the High Level Scope Document Length of Deliverable: 5 -10 pages normally. Content." ® ® The deliverable material will comprise the following: SAP functionality scope Business Process scope Geographic scope Technical scope Authorizations scope Delivery: available in both hard and soft format Implementation Activity/Task: Primarily developed during Project Preparation, but updated continuously (incremental definitions, clarifications, etc.) throughout the project. Completion Criteria: Working document Responsibility: ea project manager is responsible with "substantial participation" from the City ea project manager for creating the High Level Scope Document Participants: Project Managers and Team Leads Deliverable #3 ~ Project Charter Purpose: The Project Charter is made up of the project mission statement, business drivers and business measurements. The mission statement defines the overall organization’s goals and vision for the SAP implementation° The business drivers identify the specific company objectives and business drivers for initiating the SAP implementation. The business measurements are used to document the implementation goals and how they can be used to measure the success of the project. Length of Deliverable: 5 -10 pages normally. Content: The deliverable material will comprise the following: ~Mission Statement ®Business Drivers ¯Business Measurements 36 ea,inc.com City of Palo Alto Statement of Work Project Measurements Delivery: available in both hard and soft format Implementation Activity/Task: Developed during Project Preparation Completion Criteria: Agreement between City project manager and ea project manager. Project sponsor signoff is optional. Refer to contract for additional acceptance criteria Responsibility: City project manager is responsible with "assistance" from the ea project manager for creating the Project Charter. Participants: Project Managers and steering committee Deliverable #4 - Installed R/3 Dev System Purpose: Installation of SAP software will need to be accomplished in order to begin the Realization Phase of ASAP. An environment needs to be created by copying the software from CD’s to the development hardware and creating an instance of the SAP software on the development hardware. Length of Deliverable: not applicable Content: The deliverable will be a working development system and will require: Server Sizing Order hardware ID Network Requirements QA & PROD order timing Hardware installation and setup Installation of R/3 software Installation of hot packs or patches to bring software to current status Security authorizations for team members to begin development Delivery: not applicable Implementation Activity/Task: Delivered at the beginning of Business Blueprint Completion Criteria: Refer to contract for acceptance criteria. Project Team users should hbe able to log on and perform their required design & experimentation functions 37 City of Palo Alto Statement of Work Responsibility: ea Basis consultant is responsible with "participation" from the City Basis administrator. This is an initial step in technical knowledge transfer. Participants: City Basis administrator Deliverable #5 - Baseline Scope Purpose: The Baseline Scope provides to SAP a detailed list of the functions that will be necessary to execute the business processes. Length of Deliverable: 5-10 pages Content: The deliverable material will comprise the following: A comprehensive list of SAP functions needed to satisfy the user requirements. o Add content Delivery: available in both hard and soft format as an MS Excel spreadsheet Implementation Activity/Task: Delivered at the end of Business Blueprint Completion Criteria: Completion status must be acknowledged by consultants Responsibility: ea team leads are responsible with "participation" from the City team leads for preparing the Baseline Scope. Participants: Project Team Leads Deliverable #6 - Business Process Master List Purpose: The Business Process Master List provides the SAP generated detailed list of the business processes, which are in scope for customizing in Phase 3: Realization.. Length of Deliverable: 5-10 pages. Content: The deliverable material will comprise the following: ®A comprehensive list of business processes in SAP generated format that will be used as a basis for configuring the SAP R/3 system. 38 ea-inc.com City of Palo Alto Statement of Work Delivery: available in both hard and soft format as an MS Excel spreadsheet Implementation Activity/Task: Delivered at the end of Business Blueprint Completion Criteria: automatically generated from ASAP. Completeness can be reviewed against the Business Blueprint Responsibility: ea team are responsible with "assistance" from the City team leads for preparing the Business Process Master List. Participants: Entire Project Team participates Deliverable #7 - Business Blueprint Purpose: The Business Blueprint document will identify the organization’s business process requirements in order to achieve a common understanding of how the City intends to run its business within the SAP system. Length of Deliverable: normally 70 - 80 pages Content: The deliverable material will include the following: Executive Summary Enterprise Process Area Scope Doc Organization Structure Business Processes CI Templates Justification for RICE items Completed Technical questionnaire Delivery: available in both hard and soft format Implementation Activity/Task: Delivered at the end of Business Blueprint Completion Criteria: signoff signifying agreement. Business process owners and project sponsors should sign off. Responsibility: ea takes responsibility for driving the preparation of the Business Blueprint document with substantial assistance from the City. 39 City of Palo Alto Statement of Work Participants: Entire Project Team participates Deliverable #8 - Business Process Procedures (BPPs) Purpose: The Business Process Procedures document the step-by-step detailed procedures used to perform business functions. The raw BPP documentation details how the SAP transaction is to be executed. These documents can normally be enhanced to reflect additional process information to form the basis for materials to be used by the training team. Length of Deliverable: variable, depending on amount of detail used. Content: The deliverable material will comprise the following: A comprehensive collection of business process documents. Delivery: available in both hard and soft format as MS Word Documents Implementation Activity/Task: Delivered during Realization Completion Criteria: Accepted by Training as useable. Responsibility: The City functional team members are responsible with "participation" from the ea team members leads for preparing the BPPs. Participants: Functional Project Team members Deliverable #9 - Training Materials Purpose: The Training Materials referenced in this section are used to train end users. Length of Deliverable: variable, depending on amount of detail used. Will generally be a 1 -2 page document for each business process (ex: generating a purchase order) Content: The deliverable material will comprise the following: ¯A comprehensive collection of training documents. ¯BPPs and CitySmart materials will be used as an "advanced point of departure" in the creating of training materials for the end user classes. Deliver.y: available in both hard and soft format as MS Word Documents 4O ea-inc.com City of Palo Alto Statement of Work Implementation Activity/Task: Delivered during Realization Completion Criteria: Accepted by end users as useable during training. Responsibility: The City training team is responsible with "participation" (guidance & review) from the City functional team members and direction from the ea T&CM consultant for preparing the Training materials. The City is also responsible for providing a suitable training environment / facility for conducting end users classes Participants: City Training Team leader and members Deliverable #10 - Authorizations Purpose: Authorizations represent the security features of the R/3 system. Users are granted limited access to the system depending on job function and role within the organization. Length of Deliverable: 5 -20 pages of documentation. Content: The Authorizations deliverable will consist of the following: ¯Job roles ¯Authorization Profiles Delivery: Authorization object reside within the SAP R/3 System. Role and profile information will be available in a medium like MS Word or Excel Implementation Activity/Task: Authorization objects will start to be delivered during Realization Completion Criteria: Use standard signoff procedure as specified in contract for each role or profile Responsibility: ea Basis consultant is responsible with "participation" from the City Basis administrator for creating the authorization objects in the R/3 system. This is an initial step in technical knowledge transfer° For Phase II, the City Basis administrator should take ownership as this will be an ongoing responsibility to support the system, Participants: City Basis administrator 41 City of Palo Alto Statement of Work Deliverable #11 - Technical Objects (RICE list items) Purpose: The Technical Objects detailed in the RICE (Reports, Interfaces, Conversions, Enhancements) list are the items that are not part of a standard SAP system and require custom programming. Length of Deliverable: Currently identified RICE list items are detailed in section 2.2 Content: The Technical Objects deliverables will consist of the following: ¯Custom Reports, layouts, and forms. ¯Interfaces ¯Data Conversion programs ¯Enhancements Delivery: soft format (ABAP programs), specifications will be available in MS Word. Implementation Activity/Task: Objects will begin to be delivered during Realization. Completion Criteria: Use standard signoffprocedure as specified in contract. Responsibility: Responsibilities in this area are extremely complex. Please refer to individual sections (on Conversions, Interfaces, etc.) for additional clarification. In general, functional teams (City as primary, with guidance from ea) are responsible for creating specifications, and testing the completed object. The ea ABAP team lead is responsible for solutions architecture, with coding to be managed among the ABAP programming pool members. In cases where legacy data is involved, the City must perform all extraction, cleansing, interpretation, and mapping to a common format (normally flat file or Excel) defined by the ea ABAP team lead. Participants: ea and City technical teams Deliverable #12 - Integration Test Documentation Purpose: The Integration Test Documentation is for stipulating how the system will be testing and documenting the results. Length of Deliverable: variable, depending on amount of detail used. Content: The deliverable material will comprise the following: Test strategy 42 City of Palo Alto Statement of Work Test scenarios and scripts Criteria for documenting results. Delivery: available in both hard and soft format as MS Word and Excel Documents Implementation Activity/Task: Delivered during Realization Completion Criteria: Use standard signoff procedure as specified in agreement. Responsibility: The ea functional team members are responsible with "substantial assistance" from the City team members for preparing the test documents. The ea project director and consultants will drive the strategy and prepare examples in each functional area. The City must determine the success 7 fail criteria and take responsibility for the actual testing. Participants: Project Directors & Functional Project Team members Deliverable #13 - Base & Final Configuration (tested) Purpose: The Base Configuration is the original configuration stipulated by the Business Blueprint (base) without any of the technical modifications that will be introduced later in the stage. The Base Configuration is iteratively adjusted until a Final Configuration is achieved that will include these technical modifications in addition to any changes found to be necessary as a result of the integration testing Length of Deliverable: variable, depending on amount of detail used. Content: The deliverable is a configured and tested system. Delivery: not applicable Implementation Activity/Task: Delivered during Realization Completion Criteria: Integration tests have been signed off as completed. Responsibility: The ea functional team members are responsible with "assistance" from the City team members for configuration.. Participants: Functional Project Team members 43 City of Palo Alto Statement of Work Deliverable #14 - Installed R/3 QA and Production Systems Purpose: The QA system is used for integration testing prior to moving objects into the production environment. The Production system is the environment where the City will run its business. Length of Deliverable: not applicable Content: not applicable Delivery: not applicable Implementation Activity/Task: Delivered during Realization Completion Criteria: Transaction "SICK" returns no errors, Transport Management System configured to include new systems, Project team members can log on and perform respective functions Project Team users can log on and perform their required functions° Must be able to test, review configuration, create master data, execute transactions. Some members will be able to configure in these environments. Responsibility: ea Basis consultant is responsible with "participation" from the City Basis administrator. This is an initial step in technical knowledge transfer. Participants: City Basis administrator Deliverable #15 - Go-Live / Cutover Plan Purpose: The Go-Live / Cutover plan defines the activities that will need to be undertaken before going live including conversion timing, conversion checklist, production readiness, and approval for cut-over. Length of Deliverable: variable, depending on amount of detail shown in view. Content: The deliverable material will comprise the following: ¯Conversion Timeline ¯Conversior~ Checklist ¯Production readiness assessment ¯Initial post production support strategy and tactics Delivery: available in both hard and soft format 44 ea-inc.com City of Palo Alto Statement of Work Implementation Activity/Task: Developed during Final Preparation. Completion Criteria: By mutual agreement of City and ea project managers. Responsibility: ea with substantial assistance from the City - some elements of the plans may be fully under the City’s control and responsibility. Participants: Project Managers Deliverable #16 - Integration Testing Purpose: The Final Integration Testing is accomplished through the execution of predefined business flows or scenarios that functionally verify how the system will operate in production. These business flows, using migrated data from existing legacy systems, will be performed in a multi-faceted computing environment comprising of SAP, third-party software, system interfaces and various hardware and software components. The Final Integration Testing represents the final step in a series of testing activities that include: (a) unit testing (i.e., individual testing of each field, screen, screen-related action, and module/program); (b)system testing (i.e., testing of the ERP System as a whole and its integration with other CITY systems); and (c) volume/stress testing (i.e., testing of the ERP System under peak conditions to measure response time and ERP System reaction to load). This activity will be performed twice, once to identify system performance bottlenecks and following that, once more to re-test the system after taking the appropriate action). Length of Deliverable: Variable. Can be hundreds of pages, depending on amount of detail requested. This will be agreed during the preparation for testing by the Project Directors. Content: The deliverable material will comprise the following: Completed and signed off test result documentation, including descriptions of the scenarios, test steps, and recorded results. The overall strategic documentation and test schedules can also be included if desired. Delivery: hard copy Implementation Activity/Task: Delivered during Realization and Final Preparation Completion Criteria: Actual results match expected validated by users, team members. 45 City of Palo Alto Statement of Work Responsibility: ea has primary responsibility for this activity with substantial involvement from the City. ea will set forth a strategy, propose key test criteria, and develop the first few scenarios and scripts as part of the knowledge transfer It is highly recommended to engage the Key Users in the actual test execution and documentation (results recording)as soon as possible Participants: Functional Project Team members and Key Users Deliverable #17 - Data Conversion Purpose: Data Conversion is the activity has migrates data from the legacy systems to the SAP environment.. Length of Deliverable: Master data (vendors, materials, etCo) and opening balances will be converted. No historical transaction data will be brought from legacy systems to SAP. Content: The deliverable will consist of the following: Clean, usable data in SAP system. Delivery: not applicable factor in RICE changes Implementation Activity/Task: Delivered during Final Preparation Completion Criteria: Data is validated by City project team members and end users. Responsibility: The City functional team members must take on a primary role, with some guidance from ea on any activities associated with viewing, interpreting, cleansing, extracting or mapping legacy data° The ea team ABAP team lead can provide common file formats for the City team members to map to so that the data can be mapped from that file to SAP. Validation of the converted data in the SAP system also falls upon the City functional team members and Key Users. Participants: Functional and Technical Project Team members, and Key Users. Deliverable #18 - End User Training Purpose: The End User Training prepares the end users to execute business processes with the support of the SAP system. 46 City of Palo Alto Statement of Work Length of Deliverable: variable, depending on amount of detail and number of processes. Content: The deliverable will consist of the following: Trained users. Delivery: not applicable Implementation Activity/Task: Delivered during Realization and Final Preparation Completion Criteria: Accepted by end users Responsibility: The City training team is responsible with "participation" (guidance & review) from the City functional team members for supporting the Training effort. Participants: City Training Team leader and members Deliverable #19 - Cut Over Signoff Purpose: The Cut Over Signoff acknowledges that the system has been accepted by the users and is ready for production use. Note: This is effectively the City’s acknowledgement that it is ready to go live. Go live will be delayed unless this acceptance is obtained. Length of Deliverable: normally one page. Content: The deliverable will consist of the following: Signed document acknowledging that the system has been accepted by the City and is ready for production use. Delivery: MS Word Hard Copy Implementation Activity/Task: Delivered just before going live Completion Criteria: Accepted by City per contract Responsibility: The City project manager is responsible for obtaining the necessary support to get the document signed off, with the ea project director assisting with the actual preparation. 47 City of Palo Alto Statement of Work Participants: City business users and steering committee Deliverable #20 - System Performance Evaluation Purpose: The System Performance Evaluation acknowledges that the system is technically sound and is meeting performance requirements. This is purely a technical assessment that takes a first look at the actual production environment and infrastructure to ensure the system is properly tuned, and that users are not experiencing delays when executing transactions. Length of Deliverable: variable. Content: The deliverable will consist of a report on the Production system performance. This report will consist of: Workload analysis on Production system (analysis of buffers, transaction response time and memory usage) ¯Identify bottlenecks on OS level, DB level and SAP Application level ¯Suggest tuning parameters to rectify bottlenecks Delivery: MS Word document, hard or soft format Implementation Activity/Task: Delivered shortly after going live Completion Criteria: when submitted Responsibility: ea Basis consultant is responsible with "participation" from the City Basis administrator Participants: all team members 3.2.3 Timeline Combined with Item 3o2.4 as recommended. 48 ea.inc.com City of Palo Alto Statement of Work 3.2.4 High Level Workplan & Staffing Matrix City of Palo Alto - Internal Staffing Requirements 88 184 132 120 176 160 168 176 168 160 1632 City of Palo Alto - ea Staffing Requirements 168 160 176 168 168 184 144 168 1336 16S 160 176 16S 16S IM 144 168 1336 168 160 176 168 168 184 144 168 1336 40 [44 120 304 40 80 0O 128 176 168 160 144 144 168 1248 168 168 184 144 168 832 96 5~ 1220 1280 1036 1300 1320 L536 1712 2248 2360 1184 I03S 1012 1338 1412 I~S 49 City of Palo Alto Statement of Work 4,0 Trainin£ Strateg Introduction Implementing a new system, no matter how well planned, will create uncertainty in the work environment. A new system will change the way people work, the types of information that they will see, and the way that information is distributed throughout the organization, ea’s change management and user training approach, which is fully integrated within the entire SAP implementation process, will support the City in realizing a successful SAP implementation by: Leveraging ea’s public sector SAP training and change management experience and templates with the City’s understanding of the organization’s unique needs Building an environment within the project team that encourages the level of teamwork and collaboration critical to the project’s success Building a framework within the City, and between the City and ea, to maximize project team involvement and ownership of the changes to come Building commitment to the project objectives by the project stakeholders to foster a feeling of ownership among end-users in implementing SAP Tailoring approaches and delivery mechanisms, rather than applying a standard and intractable change methodology without first analyzing and validating the City’s unique requirements Tailoring a training program to the City’s individual needs and culture These values will drive the ea/City change management and training approach in this project. This approach is based on ea’s training group’s Public Sector experience in driving training and change management efforts affecting over 8100 end-userso ea’s approach is to utilize the tools, templates, and delivery mechanisms ea has found to be successful in the past, and integrates them into the City environment, ea’s approach is based on working with, not "doing to," its clients. SAP as well has recognized the critical importance of managing the "people- related" aspect of an implementation. SAP includes change management and training activities within the Accelerated SAP (ASAP) methodology° As the City knows, ea is certified in this methodology and how it should be delivered in the public sector. 5O ea-inc.com City of Palo Alto Statement of Work Critical Training Components The major deliverables are described in detail in section 3.2.2. The following table describes other deliverable components and associated responsibilities: Training & Change Management 1.Change Management a. Change Management Strategy b. Training & CM Project Plan c. Communications Planning do Project Team Training eo End User Training 2. Project Team Training a. SAP Curriculum Recommendation b. Scheduling and Enrollments c. One on One Knowledge Transfer 3. Training Materials a.Needs Assessment b.Training Plan c. Training Program d. Training Curriculum e.BPPs f.Build training materials fi’om BPPs 4. End User Training a. Training Facilities b.Training Environment c. Instructors Trained (TTT) d. Class Attendance Rosters e. Conduct Classes f.Feedback Methods Responsibility City owns, ea guides ea owns, City participates ea owns, City participates City owns, ea guides ea owns, City participates substantially City owns, ea guides City owns, ea guides ea owns, City participates substantially City owns, ea guides ea owns, City participates substantially City owns, ea guides ea owns, City participates substantially ~a owns, City participates substantially ~a owns, City participates substantially ~a owns, City participates substantially ,~a owns, City participates substantially :ity owns, ea guides :ity owns, ea guides 2ity owns, ea guides 2ity owns, ea guides ~a owns, City participates substantially 2ity owns, ea guides =ity owns, ea guides 2ity owns, ea guides Change Management Approach The major components of a strong Change Management approach are: ¯ Communications at all levels of the City ¯ Project team training ¯ End-user training The change management and communications process evolves with the project, ea has the tools and experience to monitor the progress of the Change effort, and make adjustments quickly and where necessary. 51 City of Palo Alto Statement of Work The change effort does not end at Go-Live. Prior to project completion, ea and the City training development team will perform a post implementation assessment and present the City with strategy for Change Management support after Go-Live. Communications Project communications will: ¯Disseminate a vision of the result of change to the user community ¯Define for end-users the need to change . Address the cultural aspects of the organization that will help implement and sustain the change Communications will be developed, delivered, and adjusted during the course of the project. These communications will take on different forms based on the message, targeted audience, and phase in the project. Proiect Team Training After communications, the next component of the Change Management effort is Project Team Training° Our objective ifi Project Team training is to provide through on the job and formalized training courses delivered by SAP, the knowledge required for the project team to understand SAP processes and procedures in their given functional area. They will utilize this knowledge in working with ea consulting functional consultants to identify the requirements for Palo Alto’s system configuration. Project Team Members include functional business representatives from each of the impacted business areas. Toward this end we will provide the Project Team Members with the SApospecific training required in performing their individual roles within the implementation. Each Project Team Member will attend SAP offered training courses based on his/her functional role on the team. 52 ea-inc.com City of Palo Alto Statement of Work Proiect Team Courses Project Team Members will attend required SAP-specific training. SAP training for Project Team Members is categorized into Level 1, Level 2, and Level 3 courses. Each course level builds upon the information presented in the previous level courses, increasing in detail and process specific as the course levels progress. Course designated Level 1 are general Overview courses. Level 2 courses are detailed, hands-on overviews focused on a specific SAP module. Level 3 courses, are detailed configuration courses. Level 1 and Level 2 courses should be attended in the early stages of the project. Attend Level 3 courses mid to late project. The following table represents a high level view of the training suggested for the project team. This recommendation can be adjusted to fit actual needs as determined in the Business Blueprint, with the modifications reflected in the training plan. In general, the Level 2 requirements won’t change, but the mapping of specific Level 3 classes to individuals may need tuning to insure the City’s project team members are adequately prepared. 53 City of Palo Alto Statement of Work Proposed City of Palo Alto Team Training Overview / General Course/Level SAP20 SAP Overview Level 1 Project Member Project Team Cost per Person 1275 Length 3 Days ASAP91 SAP Implementations Level 1 (CBT) Human Resources HR050 Human Resources Level 2 Project Manager 295 CBT HR305 Master Data Level 3 HR306 Time Recording Level 3 (or CATS) HR311 Time Evaluation Level 3 HR325 Benefits Administration Level 3 HR390 - Introduction to Payroll Level 3 HR410 US Payroll Level 3 HR505 Organizational Management Level 3 HR Key Users Payroll Key User HR Key Users HR Key User (Time Entry) HR Key User (Time Entry) HR Key User (Benefits) Payroll Key User Payroll Key User HR Key Users 2500 1500 1500 2500 1500 1000 2500 1500 5 Days 3 Days 3 Days 5 Days 3 Days 2 Days 5 Days 3 Days 54 City of Palo Alto Statement of Work Financials Course/Level AC010 Financial Accounting and Reporting Level 2 AC040 Cost Management and Controlling Level 2 AC700 Funds Management Level 3 Project Member FI Key User CO Key User FM Key User CO Key User FI Key User FM Key User FM Key User FI Key User CO Key User Cost per Person 2500 2500 3250 Length 5 Days 5 Days 5 Days CA080 Project Management Project System 1500 2 Days Level 2 Key User Logistics Course/Level Project Cost per Length Member Person LO020 Process in Procurement Procurement 2500 5 Days Level 2 Key User Course/Level Project Cost per Length Member Person LO520 Purchasing Details and Procurement 1500 3 Days Optimization Key User Level 3 LO140 Processes in Logistics Ex.Inventory Key 1500 3 Days Level 2 User LO510 Inventory Management Inventory Key 1500 3 Days Level 3 User LO530 Warehouse Management Inventory Key 1500 3 Days Level 3 User 55 City of Palo Alto Statement of Work Plant Maintenance L0100 Plant Maintenance Level 2 Plant Maint.2500 Key User 5 Days Sales and Distribution LO150 Processes in Sales and Distribution Level 2 LO615 Billing Level 3 SD Key User SD Key User 2500 1000 5 Days 2 Days Technical SAP50 Basis Technology Overview Level 1 ABAP Basis DBA 850 2 Days Programming Course/Level BC400 ABAP Workbench Basics Level 2 BC405 Techniques of List Processing Level 3 BC414 Database Update Techniques Level 3 BC420 Data Transfer Level 3 BC430 ABAP Dictionary Level 3 BC425 ABAP Enhance & Mods Level 3 Project Member ABAP ABAP ABAP ABAP ABAP Cost per Person 2500 1500 1000 2500 1000 ABAP 1500 Length 5 Days 3 Days 2 Days 5 Days 2 Days 3 Days 56 City of Palo Alto Statement of Work Database Administration BC370 Technical Core Competence AS400 Level 2 DBA Basis 3750 I Basis (System Administration) Course/Level BC305 Advanced System Admin Level 3 BC315 Workload Analysis Level 3 BC525 Database Administration Level 3 Project Member Basis Cost per Person 2250 5 Days Length 3 Days DBA 2250 3 Days DBA 2250 3 Days End-User Trainin~ Program The next element in the Change Management strategy is end-user training. In this section ea will discuss the components of the end-user training program, preparation, approach, and deliverables. Needs Assessment The first step in the training development process is to perform a complete audience needs assessment. With the introduction of a new business system, it is essential that the audience needs and requirements be identified and analyzed prior to initiating any plans for the user training process. While ea understands the City environment, and have developed and presented many SAP training courses, the needs assessment will ensure that all of the City’s individual needs are identified and addressed in the training courses developed. By using a systematic approach, ea can ensure that performance and system expectations are identified correctly. 57 City of Palo Alto Statement of Work Based on ea’s findings in the audience needs assessment, ea along with the City training development team, will: ¯Deliver a Training Needs Assessment. ¯Deliver a training agenda based on results of Business Blueprint and role- mapping ¯Deliver a specific training program based on the results of Business Blueprint and role mapping (Realization Phase) ¯ Deliver a training curriculum The primary reason for conducting a training needs assessment is to ensure that the training programs developed are based on identified audience needs. This may sound rather obvious, but this one critical factor is often overlooked when training programs are planned and developed. End-User Training Our goals in end-user training focus on the skills users require to successfully perform their jobs using SAP° Our training is designed to ensure that users understand the new tasks they are performing in SAP, the business reasons behind those tasks, and how the individual procedures integrate into the overall business processes. In ea’s experience, ea has found a variety of instructor-led courses to be the most effective way to teach SAP concepts, procedures and uses. Training materials used in a SAP end-user-training course include: ¯Participant Guide . PowerPoint Presentation Slides ¯Exercise Data ¯Course Evaluation . Job Aids (Hard copy and On-line) ¯Web-based transaction support-ready templates The City training development team, along with Key Users are responsible for developing and presenting the end-user training courses. ea will provide training approach documentation examples, templates and direction in developing and presenting end-user training in SAP° Training developers will use a varied approach to obtaining content, through a combination of Business Blueprint Documents, input from Project Team members, self-study, integration test scripts and other sources. 58 ea-inc.com City of Palo Alto Statement of Work A Participant Guide is developed for each end user training course. Individual courses are based on SAP role mapping. Participant Guides follow the same format for each course. Participant Guide Sections: Table of Contents Table of Contents based on section headings. Course Introduction Instructor/Participant introductions take place. Class materials are introduced and reviewed. Objectives Overall Course Goals are discussed and agreed upon. Learning Objectives are reviewed. Modules Module Introduction Lesson Walkthrough Practice Business Case Each Chapter in the Participant Guide is a Module. Modules are the major subject headings for the course. Each Participant Guide will contain multiple Modules. Each Module has the following components: ¯Introduction ¯Lesson .Walkthrough Practice This is the lecture portion of the Module where the Instructor presents the concept behind the individual Module. In cases where a Module covers multiple subjects, each individual subject is covered within a Lesson. Based on a scenario, the instructor will demonstrate and discuss the-SAP screens, processes and concepts based on what was presented in the Module Introduction. The participants are invited to follow along with the instructor.in SAP. Using an exercise sheet, data sheet and scenario, the participants will practice in SAP the procedures covered in the previous Walkthrough. Practices are performed by individual attendees. When all Modules have been covered, the participants are provided a Business Case; a hands-on exercise performed by the participants incorporating all the Modules presented in the session. 59 City of Palo Alto Statement of Work Conclusion Evaluation The Modules and major concepts are reviewed with the participants. This is a time to validate participant understanding, ~uestions, and clarify any unclear concepts. Each.participant completes a class evaluation for each session attended. PowerPoint Presentation Slides are used as visual support for all online and hard copy training materials° The slides are used to provide graphic explanations of processes and concepts. Relevant slides are included in the Participant Guide° Exercises and datasheets are documents that contain scenarios, instructions and data that participants must enter to complete exercises. The Course Evaluation is available to, and completed by, course participants° The course evaluation elicits participant feedback about the course content and instruction. Evaluations are used by the Training and Development team to constantly monitor the effectiveness and success of end-user training, and to identify and make any necessary adjustments in a timely manner. Job Aids are quick-reference sheets that users can access, read, and print via the Internet. Job Aids are transaction-based and outline basic steps in accomplishing common SAP functions. Web-based Transaction support is used as a tool to support individual transactions in SAP° It is available both through the Intemet and directly from transactions within SAP° The format and access points will follow closely the existing SAP online help tool, but it is tailored to the requirements and SAP configuration developed for the City. If City chooses to include this deliverable, ea will provide the City with templates in support of the development. Participant Guides, hands-on exercises, online tutorials, business scenarios, job aids, and online transaction support are all designed to help users understand how to not only use SAP to perform their jobs, but also how the tasks performed fit into the overall business process. Each course, and associated exercises, are based on the City’s individual SAP configuration, and reflect "real-life" scenarios and City business practices and procedures. Role-based Training SAP uses the concept of roles to build a profile for each user. A role describes the individual tasks performed in SAP. Each user is mapped to a set of roles describing the various tasks the employee will perform in SAP. Each user will be assigned an individual training curriculum based on the roles assigned. 60 ea-inc.com City of Palo Alto Statement of Work Since end-user training is role-based, the more varied an individual’s roles, the more training courses the end-user will attend. Overall, the average number of training days for a typical "Heavy" end-user will be 3 days, for a "Casual" end-user, 1 day. ea will present a role-mapping workshop to the City personnel to assist them in understanding the role-mapping process, along with the role-mapping approach, ea will then support the City in the actual role-mapping process. End-User Trainin~ Courses Recommended End-User Courses -City, are all designed as instructor-led, and presented in a classroom or auditorium setting. End-User Course Descriptions Based on ea’s experience, the end-user training topics described reflect a typical SAP city government configuration for those modules the City has selected. Courses may be added, deleted, or combined based on the results of a thorough audience needs assessment. Our audience needs assessment approach is described in the section describing Needs Assessment.Courses will be identified and validated early in the Realization Phase. End User Training Schedule ea subscribes to a "just-in-time" training approach, meaning that end-user training will occur as closely as possible, usually 4-6 weeks prior, to the actual Go-Live date. In this way, the training material is still fresh in the end-users’ minds when they access the system for the first time. The end-users will be provided job aids, online documentation, access to iTutor tutorials, and access to a help desk to support them in system use. New User Training Dealing with attrition, new employees, and job role changes are another aspect of ongoing training. These issues can present a challenge to any project. 61 City of Palo Alto Statement of Work The exercises developed within each course are designed as stand-alone tutorials as well. These tutorials are available to all users and can be used by the City in ongoing new user training efforts. For new users in a particular role, the training materials and online tutorials are available to present a formalized course at any time. On oin Trainin ea sees ongoing trainin.gas a major component of any implementation. The pre goo live training is designed to give end-users a basic knowledge of SAP concepts, navigation, and process usage. Once users actually begin using the system for day- to-day business, additional training is usually needed to ensure that the system is being used to its fullest benefit. Much of the follow-up training required usually revolves around reporting, and data analysis. In pre go-live courses, endousers learn how to generate required reports and interpret the information. After City personnel have used the system for a while, end~users are ready to learn how to best use the available reports for analysis and decision-making. ea will provide instructions on how the City may provide post go-live follow-up training. This needs assessment will be similar in scope to that perfol~ed to identify initial training requirements, but with a focus on possible gaps in performance, any ongoing problems, and further training requirement. This follow-up training needs assessment is included in the scope of the SAP implementation projecto Train-the-Trainer ea fully supports the Train-the-Trainer approach, and uses this option whenever possible. City staff from each Functional Area will use the training materials to present individual courses in their area of expertise to end-users. Prior to the end-user training, the City trainers and Key Users will attend a train the trainer program, designed by ea, in preparation for presenting end-user training. Topics covered will include: ¯ Presentation Techniques o Adult Learning Theory . Classroom Management ¯ Using Audio-visual equipment . Teachback 62 ea-inc.com City of Palo Alto Statement of Work A major portion of the program will be allocated for the City trainers to "teachback", practice presenting the courses using the end-user training materials to other participants in the program. In addition, this program provides a chance for a practical run through of the training materials, training client data, and logistics. Developers will be on hand to provide support during presentations and document timely changes or updates to the training materials. Upon completion of the train-the-trainer program, the Project Team Members will be ready to present the training courses to the end-user community. 4.2 Training Plan Training Plan Our general plan for training is included with in the section on training strategy. This plan will undergo detailed refinements once engaged with the City Classes 4.2.1 Brief Description of all Classes Planned Because much of the course development will be driven by the City, this detail is likely to change from the following recommendations for class, offerings. Still, this can be considered a reasonable starting point. Recommended End-User Courses - The Cit~ Phase 1 SAP Overview/ Navigation Upon completion of this course, participants will be able to: Identify SAP main functions, key terms and concepts as they relate to the City’s implementation Log in, navigate, and describe the components of the SAP system 4 Hours 63 City of Palo Alto Statement of Work Financials Upon completion of this course, participants will be able to: 2 Hours Overview Identify major groups, processes, and sub-processes within the financial functions of SAP R/3 Identify key terms, related concepts, and key components Outline links between processes and sub-processes Business Planning Upon completion of this course, participants will be able to: 4 Hours Overview Identify major processes and sub-process within the business planning functions of SAP R/3 Explain links between major business planning groups, processes, sub-processes, and other functional areas within SAP R/3 Describe benefits and advantages of SAP R/3 business planning functions in relation to City. business practices Planning Upon completion of this course, participants will be able to:1 Day Preparation Plan cost center resources and activity type rates Identify projects for funding and set appropriate master data Plan material and other primary costs Transfer and reconcile labor Describe the plan/budget review and approval process Consolidate proposed budget plan Create and Upon completion of this course, participants will be able to: 4 Hours Maintain Journal Entries Display, create and change journal entry documents Clear and reset line items Reverse journal entry documents Create and Upon completion of this course, participants will be able to:4 Hours Maintain General Complete request for General Ledger activitiesLedger Master Data Maintain the chart of accounts ~e, and maintain general ledger accounts~ 64 City of Palo Alto Statement of Work Create and Maintain Display,Controlling Master Data Display, Display, Display, Perform Closing Create and Maintain Fixed Assets Accounts Receivable Identify processes related to maintaining account groups Identify processes related to maintaining field status groups Upon completion of this course, participants will be able to: create, and maintain cost center records create, and maintain cost center hierarchies create, and maintain activity type records create, and maintain internal orders Display, create, and maintain statistical key figures Upon completion of this course, participants will be able to: Define processes for establishing closing schedules Open and close sub-ledgers Perform period ending adjustments Generate and analyze preliminary reports Carry balances forward Close year-end Upon completion of this course, participants will be able to: Display, create, and maintain fixed asset master records Display, create, and maintain sub-asset records Transfer asset records Retire assets Upon completion of this course, participants will be able to: Display, create, and maintain accounts receivable master data ~ Display, create, and maintain invoices Prepare and distribute bills Receive, process, and record payments Monitor and adjust accounts 4 Hours 2 Days 4 Hours 1 Day 65 City of Palo Alto Statement of Work Accounts Payable Project System Manage overdue accounts Upon completion of this course, participants will be able to: Manage accounts payable master data Review and prepare employee reimbursements Run evaluated receipt settlement Verify and enter invoices from suppliers Run and review reports to support payment runs Create and send payments Review and reconcile invoices Process recurring payments Process invoices and payments requests Record corrections Release holds and blocks Describe the Project System process Maintain Project Definition Maintain Work Breakdown Structures Monitor projects 1 Day 1 Day Purchase Requisitions Upon completion of this course, participants will be able to: Describe the City procurement process Create and Maintain Purchase Requisitions Process Goods Reservations Release Purchase Requisitions 1 Day 66 ea.inc.com City of Palo Alto Statement of Work SAP for Purchasing Warehouse Process Describe the Purchase Requisition release process Process goods receipts Upon completion of this course, participants will be able to: Describe the procurement process Display, create, and make necessary changes Master data Create Purchase Requisitions Create Purchase Orders Create Requests for Quotation Create Outline Agreements Perform Vendor Assessment Upon completion of this course, participants will be able to: Plan for and Execute Goods ReceivediPutaway Execute Stock Transfers / Transfer Postings Execute Picking Process Execute Goods Issue Processing 2 Days 1 Day 67 City of Palo Alto Statement of Work Recommended End-User Courses- The Ci~ Phase 2 Manage Personnel Data HR - Recruitment HR - Benefits Upon completion of this course, participants will be able to: Describe the Human Resource work flow and key terms Locate an employee and display their master data Maintain an employee’s master data Convert an applicant to a new hire Enter personnel actions for an employee Generate reports Upon completion of this course, participants will be able to: Describe the Human Resources recruitment work flow and key terms Locate and display applicant data Maintain applicant data Enter a new application into the system Enter applicant activities into the system Generate recruitment reports Upon completion of this course, participants will be able to: Describe the Benefits process Maintain Health plans Maintain Insurance plans Maintain Savings plans Process benefits Generate Benefits reports Describe Payroll integration 4 hours 4 hours 1 Day 68 ea.inc.com City of Palo Alto Statement of Work HR-Time Entry (CATS) and Personnel Actions HR - Training and Event Management Process COBRA (US) Upon completion of this course, participants will be able to: Describe the Time Entry key concepts within SAP Enter, approve, and correct employee time (Attendance) Display employee attendance and quotas (vacation and sick time) Describe Personnel Actions key concepts within SAP Process Personnel Actions Upon completion of this course, participants will be able to: Describe training and event management concepts Create business event groups, business event types, and business event dates Register a student in a class Product attendance lists (sign-in sheets) Upon completion of this course, participants will be able to: Describe room reservation concepts Check booking status of a room Reserve a room Cancel a room reservation Generate invoice for room charges? Generate event reports 1 Day 1 Day 69 City of Palo Alto Statement of Work Cours~~ Plant Maintenance Upon completion of this course, participants will be able to: Describe the Plant Maintenance processes Create and Process a Notification Create and Process a Maintenance Order Process Time Entry Process Material Movement Process Order Completion Notifications Upon completion of this course, participants will be able to: Describe the work request process Create and process Work Notifications Monitor Notification and Work Order progress The courses above are based on a typical City implementation of like scope, ea will provide the City a full training needs analysis to validate the City’s end-user training requirements. 2 Days 1 Day 4.2.2 Knowledge Transfer Activities One of the keys to a successful project is the appropriate transfer of knowledge, ea, inco has identified Knowledge Transfer as a critical component to a successful implementation. For this reason ea has invested heavily in physical, intellectual and human resources to facilitate this transfer. "Knowledge Transfer" means the methods through which ea will transfer its knowledge, skills and experience of a technical and functional nature to the City key users. These methods include informal and formal meetings, Workshops, Training classes, side-by-side demonstration, °’watch and do" activities, and other similar methods° The intent of IOaowledge Transfer is to develop progressive responsibility in the City’s team such that by the end of the Project, the City’s 70 City of Palo Alto Statement of Work Project Team will have obtained the skills and knowledge as the Test System experts. The parties will confirm Knowledge Transfer by testing and re-education. "Knowledge Transfer Testing" means the testing that ea will conduct to confirm that Knowledge Transfer in both the functional and technical ar.eas has been successfully achieved. With respect to the technical development area, ea will test only in those areas where the Work of a Technical Development Candidate was actually done. ea will develop and present testing materials, ea will compile test scores and provide a report indicating the results for all participants and recommended remedial options, if necessary. If testing reveals knowledge gaps for any participant, ea will present options regarding that participant to the City’s Project Manager which may include, but are not limited to, refresher sessions for the areas, re-testing, or replacement of the participant. Knowledge transfer encompasses many areas including an analysis of the audience (the future users), change management, training, etc. The primary goal is to have the implementation partner leave having City staff feeling confident that they can use and maintain the system on their own. Weaved throughout ea’s consulting engagement is knowledge transfer, which is a form of training specific to the needs and requirements of each key City user. This approach takes more of the City’s time, but increases understanding, ownership, and decreases training and ongoing consulting costs. Each ea peer consultant will work with the City counterpart throughout the entire project. Knowledge transfer is a significant part of these sessions. Our experience has taught us that small increments of training over the entire project life-cycle is the best method of ensuring retention and deeper understanding of the system by the City’s key users. Also, as part of the SAP ASAP methodology, knowledge transfer to the City’s key project team members is part of the process. The consultants are trained and evaluated on how well they take every opportunity to provide explanations, coaching and support to the City’s Project Team members during the execution of the project. During the "Information Gathering Sessions" ea meets with individuals and Focus Groups to collect the detailed business requirements of the City. Considerable Knowledge Transfer occurs during these Information Gathering Sessions as the participants provide information about desired business processes, ea will use the information it gathered to develop the Business Blueprint documents and the General System Design for the Test System. 71 City of Palo Alto Statement of Work Technical Team Knowledge Transfer The City will supply legacy programmers for knowledge transfer purposes (learning SAP) and legacy expertise in accordance with the Resource Plan. City legacy programmers will want to attain a degree of familiarity with the functions and technical architecture of the SAP product so that they may provide effective assistance and communication with the user community. ea have organized the project into two distinct phases. Phase I encompasses the financial applications, while Phase II focuses on the Human Resources and Payroll functionality. Our plan allows for substantial ea technical support during Phase I, with the expectation that the City will acquire the necessary training and knowledge to take a greater technical role during Phase IIo In this way, ea will be in a supportive role during Phase IIo This will allow the City to "test" its understanding of the technical SAP components, ea will, of course, be supporting the City during Phase II and will be able to assist in any additional technical gaps or training. By the conclusion of Phase II, the City should have all the necessary technical skills to fully support the system, ea will be available for additional support should the City have needs. New Cit~ Technical Roles ea recommends that the City train several technical staff members to fill the role of an ABAP programmer° The necessary and appropriate training classes are incorporated into the project plan. The City ABAP programmers will learn: the basic concepts of the ABAP programming language how to utilize the ABAP Workbench tools efficiently how to write basic application programs including user dialogs (selection screen, list, dynpro) and dialog with database (reading data from database) how to navigating in the Workbench and using the syntax help how to write programs using the Object Navigator how to edit source text using the ABAP Editor how to test programs using the Debugger how to use the internal tables how to use modularization techniques locally within a program how to dialog with and optimize the database 72 ea.inc.com City of Palo Alto Statement of Work ea recommends that the City train staff members to fill the Basis Technical role. The necessary and appropriate training classes are incorporated into the project plan. The City Basis person will learn: General Administration - relevant for all system administrators in the SAP environment. CTS Administration - how to use software logistics tools. Database Administration - how to administer the different databases in the SAP environment. ITS Administration - how to administer the Intemet Transaction Server, which is used in many SAP system environments. User and Security Administration - how to manage user administration and security. 4.3 Resources 4.3.1 Description of Training Resources Available to the Customer as Part of the Current Scope of Work ea will provide a Change Management / Training consultant for approximately 1200 hours within the framework of this project. While ea recommends this individual be deployed primarily in a teaching or mentoring role for the City’s change management and training teams, there will obviously be opportunities for more tactical utilization at times over the course of the project. This is highly dependent on the relative skill levels of the City resources and how quickly they can come up to speed with this highly technical product. The functional project teams are also a wealth of information on how the SAP system works. As the original creators of the BPPs, they essentially drive the functionality on which end users will require training. 73 City of Pal, Alto Statement of Work 5.1.1 Proiect Assumptions Project Assumptions Project Management A. Phase II Project Management 75% FTE B. Scope control is critical, The Business Blueprint document will serve as a guide° City and ea Project Directors must jointly approve any changes in writing in accordance with a Project Change Control / Request process, Technical A. Basis in Phase II will be supported by City B. City will provide two FTE ABAP programmers at the beginning of the project to work directly with ea’s consultants° These ABAP programmers must be fully trained and functional by October 1 st, 2002 and able to contribute toward the completion of the technical task work that will be itemized on the RICE list. They will assist in the development of ABAP technical objects including interfaces, data conversions, modifications and reports. Note that deficiencies in this area will cause significant project risk and will likely create the need to augment this area with supplemental qualified resources. Co For conversion effort, ea will provide the City with the different conversion file templates for all the needed SAP modules and will assist them in identifying legacy data fields to be converted based upon both SAP best practices, and ea’s knowledge of the industry solutions. The City will be responsible for developing the legacy system file extract programs needed to extract data from their legacy systems into the conversion file templates, ea assumes that files provided by City have been reviewed and cleansed to ensure "clean" data by the City D. For the 10 Interfaces, ea will use the flat file approach as a medium between SAP and non-SAP systems wherever applicable and that ea will be responsible for getting the data from the flat file into SAP. On the other hand, the City will be responsible in putting the data from the non-SAP system into the flat file. E. ea will be responsible for developing and testing interfaces and conversions. City will be responsible for completing final testing. F.Any web enabled functions, e-procurement, B2B, etc. will utilize "standard" SAP functions. No custom development is in scope for these functions. 74 City of Palo Alto Statement of Work G.The City will agree to use standard SAP. When a modification is an option to standard functionality, a RICE list item will be developed and prioritized against other items on the list contingent on the availability of ABAP hours in the pool. Training & Change Management A. City will support its own Change Management during Phase II B. City will acquire the majority of its Financials Project Team training during the first two months of the Project. C.City will acquire the majority of its Human Resources/Payroll Project Training prior to the beginning of Phase II Business Blueprint A.City and ea will assign dedicated, full time equivalent (FTE) resources to meet requirements stipulated, in section 3.2.4. B.Both parties agree to work overtime (when required and mutually agreed upon) to help complete joint Project deliverables and to make Project timelines. C. Vacations or absences during, the project will be subject to an approval process to be determined by the City and ea project directors. D. City will endeavor to replace in a timely fashion, any resources that leave the project Performance issues with any resources assigned to the project must be addressed using a process that will be developed by the City and ea project managers. General A.City Team members are empowered to make decisions for fast turnaround time - within 2 business days for minor issues and 3 business days for major issues. Timeframes may be extended by mutual agreement of the project directors from City and ca. B. City is committed to implementing SAP support "Best Practices" in order to minimize or eliminate the need for customizations C. City will be responsible for developing all policies and procedures in support of the business processes implemented within the scope of the Project D.City will provide work space and facilities for consultants to use. E.The following "Critical quantity items" are intended to be included in the scope of this project: 75 0o.~.o.0o.,City of Palo Alto Statement of Work 10 Custom Reports (developed in collaboration with City ABAP staff as part of Knowledge Transfer 10 Interfaces as specified in section 2°2° 1 of this Statement of Work 240 ea Consultant Support Hours will be included at the end of each phase to be used at the discretion and direction of the City’s Project Director. (# if reports, interfaces, support hours, etc.) 76 ea-inc.com City of Palo Alto Statement of Work 6.0 S__oftware Functionali~ Software. Description of Software SAP is an Enterprise software package with extremely rich functionality. As a package that has been installed at over 18,000 companies worldwide, it has the ability to meet a wide range of needs in many vertical markets. ea has partnered with SAP to bring their specific expertise in the public sector together with the global leader in enterprise software, a combination that spells success for the City. 6.2 Customer Needs 6.2.1 Explanation of how Software will Meet {Customer’s} Business Requirements The SAP software application appears to provide a nice fit for the City’s business requirements. Please refer to ea’s responses to the Functional Requirements Matrix for further details on how the software fits the City’s needs. 77 City of Palo Alto Statement of Work 7,O Additional Descriptive Information Future _U_p_grades Process for incorporating future upgrades One of the criteria for selecting SAP is for the flexibility its users have in whether or not to upgrade the software° ea normally proposes upgrade work separately, with the process ea would suggest for a future upgrade being highly dependent on the state of the system to be upgraded, considering factors such as timing, whether the system is live, how much had it been customized, years on the current release, etc. General statements ea can make about upgrading the software that are pertinent to this project are: A decision to upgrade in mid-project would have to be analyzed at that point in time. ea would use ASAP as a baseline methodology for the upgrade. 7°2 Third Parties 7o2.1 Plan for Support and Up-Grade of Third Party Software No Third Party Software are anticipated to be proposed. Third PartE Solutions Third Party Software No Third Party Software Proposed 7.3.2 Description of History between Vendor and Third Party Provider No Third Party Vendors Proposed 78 ea.Jnc,com City of Palo Alto Statement of Work 7.4 Reports 7.4.1 Standard Reports SAP boasts an extensive library of standard reports that come delivered with the system. As there are literally thousands of reports available "off the shelf’ with SAP, a list of these would seem to be cumbersome and represent marginal value in the absence of a functional expert who could interpret what data fields are delivered in each. 7.4.2 Reporting Tools SAP delivers several tools for creating reports that are not covered by the extensive library of standard reports that come delivered with the system. Among these tools are ABAP Query, SAPScript, ReportWriter and Report Painter. As these tools, combined with SAP’s standard suite of reports generally can meet most user needs, ea does not recommend the up from purchase of a third party reporting tool. 79 City of Palo Alto Statement of Work 8.0 Process In[ormation 8ol Issue Management In general, project issues must be closely managed. The following details a process outline to serve as a starting point° The Project Directors from the City and ea can mutually decided to modify this process to meet the needs of the project based on the number and severity of issues that arise. 8.1.1 Documentation & Tracking Issues will be captured in a data base or spreadsheet. The captured issue should reflect originator (or originating team), date originated The originator should include a desired outcome, ioeo a proposed solution. Issues will be assigned to a level of criticality based on impact to the project. Issues will have a status that reflects progress toward resolution, and a date that the last action was taken towards resolution. Once resolved, detailed information regarding the outcome should be documented, including the date of resolution 8.1.2 Communication In order to ensure issues are both addressed and communicated in a timely fashion, the Project Directors from the City and ea will review the open issues a minimum of once per week. Issues of a critical nature and those that have been escalated to the steering committee or senior management level should be reviewed daily until resolved. It is understood that the Project Directors from the City and ea may choose to include other team members in these reviews, and that it is not uncommon to schedule a weekly issues meeting for the project team, leaders, or both. External communication of issues can be facilitated using the issues list. The City Project Director is expected to communicate relevant issues to key stakeholders 80 ea-inc.com City of Palo Alto Statement of Work and senior management within the City’s organization to expedite resolution. The City Project Director may engage the use of the City’s Change Management Lead to assist in this activity. 8.1.3 Escalation Issues that cannot be resolved within the authority or capability of the project team should be escalated to an appropriate business owner or, in the case of policy, to a higher authority within the City. It is the responsibility of the City and ea Project Directors to analyze the need to escalate issues, and make timely judgments, getting issues in the "right hands" to achieve speedy resolution. Escalated issues should be clearly designated on the issues list, and must include time and date notations on when an issue was escalated, who it was escalated to, and when a resolution is due or expected back. In cases where an issue has been escalated under the expectation of a contractually timed response, that escalation event should be clearly documented (dated, time stamped, etc.) using meeting minutes or formal memo. The Project Directors may choose to invoke a signature process at their discretion to formally escalate project issues. 8.2 Vacation / Absence Al~provals 8.2.1 Vacation Vacation should be scheduled as far in advance as possible. As a general guideline, try to give 1 week of advanced notice for each consecutive day planned off. (1 day off, 1 week notice, 5 days off, 5 weeks notice) Vacation requests should be made in writing (email is OK) to the ea Project Director (for ea consultants and the City’s Project Director for City team members after arranging to take the time away with the appropriate functional or technical team leaders. The Project Directors will jointly review and approve time off within the guidelines set forth by the respective employee policies of ea and the City. The intent of this process is not to deny vacation time. The SAP project environment is extremely stressful and time away to recharge is highly encouraged. This process simply allows the Project 81 ea-inc,com City of Palo Alto Statement of Work Directors to better balance the needs of the project with those of the individual. Newcomers to the project with vacation time already planned that will fall during the project timeframe should communicate in writing (e-mail or memo) to the appropriate Project Director per the process detailed above. In addition, these plans should be communicated with team leaders and functional counterparts as soon as possible to insure continued task progress. 8.2.2 Absences Planned absences (training, medical appointments~ etc.) should be handled using the vacation approval & communication process. Unplanned absences should be communicated by phone (leave voice mail) as quickly as possible to the appropriate Project Director, your team leader, and any others who are relying on you. 8.3 Chan~e Request Process 8.3.1 Change Requests If, in the event that new requirements (not on the City’s submitted functional matrix) surface, the following process will be followed for change requests: The originating project team member will open a Change Request and will forward the completed change request form to the City’s Project Director. The change request form will contain the following: ¯Description of Change o Reason for Change ¯Areas Affected (Network, System, Database, Application) ¯Personnel who will be implementing the change ¯Proposed Change Window ¯Potential Budget Impact ®Potential Scope Impact The Project Directors will analyze the request and make a determination as to how to best meet the requirement. 82 ea-inc.com City of Palo Alto Statement of Work Options at the disposal of the Project Directors include: Reprioritization / reduction of current scope to allow inclusion of new requirement Movement of tasks to a post-production, or "support initiative" list that would allow City resources to accomplish the work after sufficient knowledge transfer. e Temporary increase resource pool by engaging Key Users for project tasks. e Submit a Change Order It is assumed that any changes in project scope, deliverables, or responsibilities would necessitate addendums or modifications to this Statement of Work under the terms of the Services Agreement between ea and the City. 83 ea-inc.com 14.0 Functional and Technical Requirements Matrix The following items are exceptions and/or clarifications to the SAP Functional Matrix responses. Reference Number HR175 HR230 PAY12 PAY13 PAY73 PAY211 PAY212 Functional Requirements Ability to define multiple grievance rules. Tracks tuition reimbursement eligibility, costs, payment status and can perform what- if scenarios on payment reimbursement. Supports payment modeling with secured employee online access Supports on-line employee enabled W4 changes and ’what-if’ pay scenarios with secured employee online access Deductions are defined by job code. Changes to employee pay, deductions, and taxes Changes to employer deductions and taxes Respons e M M M M M R R Comments Grievance rules and procedures may require additional configuration if they do not conform to a common pattern that is compatible with SAP’s standard facility for defining rules. The HR module can track eligbility. The NP and A/R modules can track costs and payment status. Reports can be written to consolidate tuition reimbursement information and perform what-if scenarios. HR professionals may perform on- line "what-if" analyses for individual employees or groups of employees using the SAP payroll simulation capability. HR professionals may perform on- line "what-if" analyses for individual employees or groups of employees using the SAP payroll simulation capability. With SAP, jobs are decomposed into positions, and several attributes of positions can be used to drive time, pay, or leave processing. Normally, it is not necessary to attach these attributes to jobs, and additional configuration may be required to do so. Additional reports may be required to identify and compare changes to employee pay, deductions, and taxes, and employer deductions and taxes. Additional reports may be required to identify and compare changes.to employee pay, deductions, and’’ taxes, and employer deductions and taxes. ea consulting, inc 1130 Iron Point Road, Suite 288 Folsom, CA 95620 City of Palo Alto Request for Proposal # 142691 March 2002 APPENDIX # 1 TO EXHIBIT "A" ea-inc,com WO12 WO02, WO07, WO41, WO45, WO60, WO71, WO78, WO83, WO85, W086, WO87, WO88, WO89, WO93, WO94, WO95, WO96, WO101, WO102, WO104, WO105, WO 106, WO 107, WO112, WO114, WO 122, WO141, WO 142, WO161, WO204, WO224, WO225, WO226, WO235, WO239, WO240 AR4 ea consulting, inc 1130 Iron Point Road, Suite 288 Folsom, CA 95620 Interfaces to GIS system to schedule routine maintenance of Operations functions and schedule these activities into the available average labor pool hours. Creates a work order schedule calendar for the’ fiscal year and target workdays for the routine maintenance items so these items get planned, scheduled, and performed with a definite work order schedule. Establishes default account distributions for each receivable. M Requires interface development Add comment: With SAP’s Project/Funds Management Systems module Add comment: Account assignment model can be utilized to store the default account distributions. When posting a receivable, choose the desired account assignment model° This will automatically default in the revenue accounts stored in the template. City of Palo Alto Request for Proposal # ! 42691 March 2002 FA45 FA76 BUD11 BUD12 BUD14 Automatically creates a record for each item purchased after proper approval. Allocates depreciation to different cost-centers based on user-defined percentages. Position Control system with multiple budget versions. Computes "what if" scenarios using actual budget data or adjusted budget data compared to actual expenditure data or adjusted expenditure data in any combination. Ability to create budget relationships (e.g., salary changes automatically adjust benefits and vice versa). ea consulting, inc 1130 Iron Point Road, Suite 288 Folsom, CA 95620 Add comment: A fixed asset number must already be assigned when a PR is created. If the creation of fixed asset prior to PR approval is not desired, a dummy fixed asset can be used in the PR. When converting a PR to a PO upon approval, a real asset number must then be created and assigned to the PO. SAP allows for the creation of fixed asset master directly within a PR or a PO i.e. a user does not have to navigate to the asset accounting area in order to create a fixed asset. In any case, the creation of a fixed asset record has to be initiated by the user. Add comment: For each asset, deprecation can only be posted to a single cost center. However, the depreciation expense can be subsequently allocated to other cost centers by user-defined percentages using the distribution/assessment functionality in Cost Center Accounting. Add Comment: Will require HR and Personnel Cost Planning. The use of Personnel Cost Planning requires a 1:1 mapping between cost center and the Funds Management account assignments (fund, fund center and functional area). Add Comment: Will require HR and Personnel Cost Planning. The use of Personnel Cost Planning requires a 1:1 mapping between cost center and the Funds Management account assignments (fund, fund center and functional area). Add Comment: Will require HR and Personnel Cost Planning. The use of Personnel Cost Planning requires a 1:1 mapping between cost center and the Funds Management account assignments (fund, fund center and functional area). City of Palo Alto Request for Proposal # 142691 March 2002 ea.inc.com BUD40 BUD48 Creates budget relationships (e.g., salary changes automatically adjust benefits and vice versa). Heading: POSITION CONTROL / STAFFING TABLE Add Comment: Will require HR and Personnel Cost Planning° The use of Personnel Cost Planning requires a 1:1 mapping between cost center and the Ft~nds Management account assignments (fund, fund center and functional ~area). Add Comment: Will require HR and "Funds and Position Management" to automatically generate pre- encumbrances and encumbrances for payroll costs. However, the use of HR-FPM precludes the use of Functional Area. ea consulting, inc 1130 Iron Point Road, Suite 288 Folsom, CA 95620 City of Palo Alto Request for Proposal # 142691 March 2002 c ill m X x I-"r-r" 030.-.I _.~ ~ m o t- o II 0 Z,-~ × 0 O_ 030 G’)II -,.I .-.~ o) 0 o < =0 ’1 ITI o 13. o II II --Io ~ r,-(I) II II ~5~.o 121 ~ "=. o II II |I _~. c c 1 i ~5~o m oo I II II 0 ~_~.< × ~ : r," ~ o II I1 II {3)O 0 ill 111 8 00o ~oo 0-1 o z 0o ~om 0 -I ooo o< m! ~ _<."0 (1) 0 o o 00 c 0 -- <<0 8 .5’ II 0 o @ Z~ <~- 11 II 0 × ~’-~ -’1 ~.- o "-5" o. II II 0 0 0 ~" 0O. ~--m o li II II -0 -~0 (0 CO "-4 0 0 ¯ -I .-~ t~ o 0 8 o 0 -13 o ~ 9 o.g,, coo Z~ 0 II ..~0 O~~0 0._,.0 0 0 0 0 0 0 0 0 o m II II 0 mS.< o N’ 0 0 0 0 0 0 0 0 0 0 0 0 0 13. 0o - I 0 0 I0 0 0 0 0 0 < o o o o o o o o o o o o o o d) 3 ,~, 13. 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II II 0 2"13,- ~N’< 0 ~" o 3 3 ~ "o "o c: ~m II II IIII ’< 0 ~_~’~ ~ ~o,q~" ~ ~;~o ~" 0 "" 0 ,e o x= z~ o o 0 0 - II II 0 - 0 m 0 o .-I ,0 m 0 0 0 O00 o 8o< II II zzo II II 0 Z "o c :~"0 0 0 0 0 --I =4 -’I --I =4 "4 ’-4 "=I --{--I F=I =4 --I --Im111m111111rrlITIm111m~m m rrl m t~m --I =4 -4 ’--I --I ’-I --I 11 ITI 111 rrl m 111 ITI m m m m m m -r 0o z "4m .i- o -4m .I- ,-4 m m m ~)m m m m rn m m m m 3 -’~. o ~m m m rn rn m m m ~’-~0 0 0 0 0 0 0 O,0 0 l’O --~0 ~. :3"oo -Im m t- m "mrnmmmmrnmm o o o cr 0 0 0 0 o OOOOOOOO EXHIBIT ~’BI’ CONTRACTORS TO THE GITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW,. AFFORDED BY COMPANIES WITH A BEST’S KEY RATING OF A:VII, OR HIGHER, LICENSED TO TRANSACT INSURANCE BUSINESS IN TItE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: MINIMUM LIMITS REQUIRED YES YES YES YES TYPE OF COVERAGE WORKER’S COMPENSATION AUTOMOBILE LIABILITY COMPREHENSIVE GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY COMPREHENSIVE AUTOMOBILE LIABILITY, INCLUDING, OWNED, HW,_ED, NON-OWNED PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE REQUII~EMENT STATUTORY STATUTORY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. BODILY INJURY EACHPERSON EACH OCCURRENCE PROP~RTYDAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED ALL DAMAGES EACH OCCUPd~ENCE $1,000,000 $1,000,000 $1,000,000 $l,000,000 $1,000,000 $1,000,000 $l,000,000 $1,000,000 $I,000,000 AGGREGATE $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES THE CITY OF PALO ALTO" IS TO BE NAMED AS AN ADDITIONAL INSURED: BIDDER, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY BIDDER AND ITS SUBCONTRACTORS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSURES CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. II. INSURANCE COVERAGE MusT INCLUDE: A.A PROVISION FOR A WRITEN THIRTY DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND SUBMIT CERTIFICATE(S) OF INSURANCE EVIDENCING REQUI’RED COVERAGE, OR COMPLETE THIS SECTION AND IV THROUGH VI, BELOW. NAME AND ADDRESS OF COMPANY AFFORDING COVERAGE (NOT AGENT OR BROKER): Chubb; 200 St. Paul Place 23rd Floor Baltimore, MD 21202 NAME, ADDRESS, AND PHONE NUMBER OF YOUR INSURANCE AGENT/BROKER: Sacramerito Valley Insurance; 1520 River Park Drive Sacramento, CA 95815; 916-286-5960 C.POLICY NUMBER(S): 79779002 Do DEDUCTIBLE AMOUNT(S) (DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL): $5,000 E-5 III. IV. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AND BIDDER’S SUBMITTAL OF CERTIFICATES OF INSURANCE EVIDENCING COMPLIANCE WITH THE REQUIREMENTS SPECIFIED HEREIN. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO "ADDITIONAL INSURES" Ao PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSURES. B.CROSS LIABILITY Co THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSURES UDNER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLEINSUREDS,SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POIICY. NOTICE OF CANCELLATION IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRI-I-I’EN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRI-FI-EN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATI.ONL PROPOSER CERTIFIES THAT PROPOSER’S INSURANCE COVERAGE MEETS THE ABOVE REQUIREMENTS: THE INFORMATION HEREIN IS CERTIFIED CORRECT BY SIGNATURE(S) BELOW. SIGNATURE(S) MUST BE SAME SIGNATURE(S) AS APPEAR(S) ON SECTION 300A. Firm: Signature: Name: Signature: ea con/~ult!ng, inc. Robi[ah Khatib, President (Print or type name) Name:CK Wong, Secretary. (Print or type name) NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303. E-6 CERTIFICATION OF NONDISCRIMINATION SECTION 410 Certification of Nondiscrimination As suppliers of goods o~- services to the City of Palo Alto, the firm and individuals listed below hereby certify: " a)that they are currently in compliance with all federal and state of California laws covering nondiscrimination in employment; and b)that, if awarded the contract, the proposer will not discriminate in employment of any person under the contract because of race, color, national origin or ancestry, religion, disability, gender or marital status of such person. THE INFORMATION HEREIN IS CERTIFIED CORRECT BY SIGNATURE(S) BELOW. Firm: ~.~.~ Signature: Name: Signature: Name: Note: (PRINT OR TYPE NAME) (PRINT OR TYPE NAME) California Corporations Code Section 313 requires two corporate officers to execute contracts. *The signature of First Officer* must be one of the following: Chairman of the Board; President; or Vice President. **The signature of the Second Officer** must be one of the following: Secretary; Assistant Secretary; Chief Financial Officer," or Assistant Treasurer. (In the alternative, a certified corporate resolution attesting to the signatory authority of the individuals signing in their respective capacities is acceptable) CITY OF PALO ALTO RFP NO 136834 PAGE 1 OF 1 EXHIBIT "D" ATTACHMENT 3 AMENDMENT NO TWO TO CONTRACT NO. $2140169 -BETWEEN.THE CITY OF PALO ALTO AND " GOVERNMENT FINANCE OFFICERS ASSOCIATION (GFOA) This Amendment No. Two to Contract No. $2140169~ as amended by Amendment No. One, ("Agreement") isentered int0_July 16; 2002_,by and between the CITY OF PALO ALTO, a chartered city and a municipal corporation of.the State of California ("CITY"), and Government Finance Officers Association, an Illinois Corporation, located at203 N LaSalle Street, Suite 2700, Chicago, IL 60601 ("Contractor") RECITALS: WHEREAS, the Agreement was entered into between the parties for the provision of services relating to the CITY’s acquisition of an Enterprise Resource Planning t"ERP"~’System t . ,, and WHEREAS, on December 18, 2001, the parties entered into Amendment One to the Agreement to expand the ContCactor’s scope of work, extend the term and increase the compensation; and WHEREAS, the parties wish to further amend the Agreement to add additional Contractor services, extend the term and increase the Contractor’s compensation;- NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. The.Section entitled "CONTRACTOR". is hereby amended to add tl~e quality assurance and p~oject management support services for .the ERP Implementation as specified in the exhibit entitled "Exhibit A - Scope of Work~’ attached hereto, and incorporated into the Agreement by this reference follows: SECTION 2. The Section entitled "Term"_ is hereby amended to read as "TERM. The services/and or materials furnished under this Agreement shall commence on October 22, 2001 and shall be completed before July 22, 2003." SECTION 3. The Section entitled "COMPENSATION" is hereby amended to read as follows: COMPENSATION for the full performance of this Agreement: CITY shall pay CONTRACTOR: For Phase I, a fixed price for a total not to exceed $30,000. For Phase II, a total amount not to exceed $62,500 payable on the basis of deliverables as described in Exhibit B.to Amendment No. One to the Agreement. For Phase III, a total amount not to exceed $25,000, payable on a Time and Expenses basis, as described in 020716 NRA 010000i Exhibit B to Amendment No. One to the Agreement. For quality assurance and project management support services for the ERP Implementation a total amount notto exceed $150,000, payable on a Time and Expenses basis,.as described in Exhibit B, attached hereto and incorporated into the Agreement. by this reference." SECTION 4. Except as herein modified, all other provisions of the Agreement, as amended by Amendment No. One, including .any exhibits and subsequent amendments thereto, shall remain in full force and effect. IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on the date first above written. ATTEST: City Clerk APPROVED AS TO ~FORMi Asst. CityAttorney APPROVED: Assistant City Manager Director .of Administrative Services Director of Risk Manager CITY OF PALO ALTO Mayor GOVERNMENT FINANCE OFFICERS ASSOCIATION ("GFOA") / B Title: Taxpayer Identification No. 36-216-7796 (Compliance with Corp. Code. 313 is required if the entity on whose behalf this contract is signed is a corporation. In the alternative, a certified corporate resolution attesting to the signatory authority of the individuals signing in their respective capacities is acceptable) 020716 NRA 0100001 Attachments: ~ EXHIBIT "A": EXHIBIT-"B": SCOPE OF WORK COST AND PAYMENT SCHEDULE 020716NRA0100001 CERTiFiCATE OF ACKNOWLEDGMENT (Civil Code, 1189) STATE OF COUNTY OF On __July 16, .2002 ; before me, the undersigned, a notary public in and for said County, personally appeared Jeffrey L. Esser , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. -WITNESS my Iqandand-official seal. Signature of Notary Public 020~16 NRA0100001 Exhibit A Scope of Work GFOA will participate in the ERP design and implementation activities mainly as an independent third party advisor to the City of Pa]o Alto. GFOA staff participation will be heavier in the early stages of the implementation. It will moderate during the middle of the implementation--primarily focusing on attending project and steering meetings, evaluating deliverables, and issue resolution, it will again increase-during the acceptance testing and evaluation phases of the implementation. The structure is intended to maximize the value of GFOA’s role to the City, contributing work effort at critical junctures throughout the p[oject. GFOA consultants will workduring the first 12 months of the.ERP project, which will carry us through the go-live of the Financials part ofthe implementation. During the 12 months, however, GFOA staff will provide input to other modules in the project including (but not limited to) project accounting, work orders, human resources and payroll. GFOAwillprovidethe following general services in connection with the ERP: ¯ 11 Implementation Plan Assessment. GFOA will work with the City and ERP ’implementers to shape a pi~n that makes the most effective use of City ’resources. For instance, GFOA recognizes that internal procedures may warrant lengthy review ofdeliverables, which may impact the project schedule. We will assist the project manager in developing project milestones where decisions can be made efficiently.. In addition to project plan design assistance we will help the City assess the logic and comprehensiveness of the’plan as it is created, finalized, and maintained. Essentially, GFOA’s role is to provide an "early warning mechanism," tothe City at various points in the implementation process by carefully tracking the progress of activities within the project plan. 2. Identify Opportunities for Process Change/Reengineering. The GFOA will work with City staff and software implemente?s to identify current business processes that could be changed as part of the implementation of the new enterprise system. GFOA staff will review the implementation of process flows determined during the design activities and assist the City to confirm that the process changes being pursued are consistent with industry standards and City policies/procedures. 3. Design Assistance. Immediately following the process flow analysis, the City will .be asked by the implementation consultants to make configuration decisions and test them. This can be overwhelming for staff, particularly when they are learning a new software package at the same time. GFOA will assist City staff in interpreting the decision points and will work with the software consultants to convey issues especially as they relate to public sector best business practices. The re-engineering and design assistance provided by GFOA will be especially important for the new chart of accounts, work order management, project accounting, HR, and Payroll. 020716NRA0100001 6 4. Post Implementation Evaluation. After the software design is complete and testing has taken place, GFOA staff will evaluate the overall implementation to assess whether the system as currently deployed meets the needs of the City as outlined in its RFP. In an effort to have the system in production on-time and/or on-budget, governments take "short cuts"--incomplete deployment of workflow, inadequate.end user training~ permitting standalone databases to coexist with the new system,-etc. GFOA will document practical post-production steps that City can take to ,optimize the value of the system. GFOA will provide the following services in connection with the ea Consulting/SAP Engagement 1. Readiness and Project Preparation., GFOA staff will be on-site to assist the City in preparing a project plan for software implementation. GFOAwill take steps to embed key points of the implementation .contract into the plan and that key decision points fall within date ranges that are mutually, acceptable to the momentum of the project and key dec sion-maker work loads. GFOA will also use this opportunity to.outline .the expectations .for project deliverables. .2~ Business Blueprint. This activity requires heavier involvement of GEOA staff since this stage of the plan requires discussions and interpretations of City processes and governmenta! accou nting~. G FOA staff will attend key decision meetings. GFOA will also review draft blueprint deliverables prior to review. GFOA Will then work with. City staff and consultants to incorporate blueprint revisions, into the final product. 3. Project Evaluation. Whe~ the City’s implementation, contractors (i.e., eaConsulting) bring exp.ert~ to review final system configuration and testing, GFOA will review,their reports and provide assessments to the City to help ensure that the City’s objectives in the ERP project are being met. 4. Project Management Support. Although the Citywill have its-own Project Manager for implementation, there may be times when the City needs additional resources to meet contraot assumptions. GFOA staff will provide some assistance when necessary. In the past, GFOA staff has been asked to work with consultants, on behalf ofa project manager, to revise deliverables or to assist the project manager in reaching decisions that have negatively impacted project schedules. Finally, GFOA will help the City’s Project Manager provide project oversight throughout the Financials system implementation. CITY recognizes that GFOA is not the software provider or the systems integration firm and shall not hold GFOA responsible for the performance of the software or implementation services vendors. 7 020716NRA0100001 Staffing GFOA shall assign the following personnel to provide quality assurance and project management support services for ERP implementation to the CITY. GFOA may assign or substitute other staff to the-project with the prior consent of CITY. PATRICE SUTTON BURGER (Senior Consultant) SHAYNE KAVANAGH (Senior Consultant) BARRY MCMEEKIN (Senior Consultant ROWAN MIRANDA, Ph.D~ (Engagement Manager). ROBERT ROQUE (GFOA Project Manager/Lead Consultant) 020716 NRA 0100001 COST AND PAYMENT SCHEDULE Schedule 1 shows the estimated allocation of hours/work-effort for GFOA staff during the first 12 months of the City of Palo Alto’s ERP project. Additional narrative related to the calculations is provided below. Rate Schedule Engagement Manager $175 Lead Consultant $165 Senior Consultants $160 Estimated Project Cost Total Cost; As shown in Schedule 1, GFOA estimates the project cost to. be $150,000 inclusive of travel..and expenses. The maximum compensation for services under this Agreement shall not exceed $150,000. Staffing Cost. GFOA will provide 747 hours to this project for what.results in an average hourly rate of $t64 for a total of $122,700. GFOA assumes that if one of their staff members does not put in the hours, theycan be substituted by another staff member assuming the rate for that staff member applies and the cost of the contract is not exceeded.. Travel Cost. Travel costs are estimated to be $27,200 as shown in Schedule 1. Travel. expenses shall adhere to pages 3 and 4 of the City POLICY AND PROCEDURES 1-02/ASDas revised in January 2001, and. will include accommodationsl car rental, airfare, meals, parking and incidental transportation, GFOA shall provide appropriate documentation for all travel expenses incurred, including meals, unless GFOA elects to apply for reimbursement at the City per diem limits in the case of meals, per City policy. On-Site Work " Travel costs will be heavier during the beginning and ending stages of the project because of the heavier on-site work during those periods. Invoice GFOA will invoice the City on a monthly basis based on hours incurred at the rates shown above (plus travel). 020716NRA0100001 9 Attachment 4 LEASE SUMMARY Lessor: Tenant: Premises: Term: Rent & Common Area/Management Fee: Repair, Maintenance & Janitorial: Taxes: Utilities: Subletting: 300 Hamilton Associates City of Palo Alto 300 Hamilton Avenue, Suite B, Palo Alto 4,655 square feet 2.5 years with options to renew for an additional 2.5 years or 5 years. Base rent of $9,080 per month with annual increases based on the Consumer Price Index. Tenant to pay an additional $6,000 per month for its pro-rated share (13.1% of the common area charge, and a 3% of the annual rent, Management Fee.) Tenant to pay its pro-rated share (13.1%) for janitorial, repair and maintenance. Tenant to pay its pro-rated share (13.1%) of any assessments and taxes. Tenant to pay its pro-rated share (13.1%) for utilities. Tenant must have Lessor’s permission to sublet any portion of ttie premises. 0 E