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Home My WebLink About2002-10-15 City Counciltt ), TO: City of Polo Alto City Manager’s Report ’4HONORABLE CITY COUNCIL ATTENTION:CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES DATE:OCTOBER 15, 2002 CMR: 386:02 SUBJECT:APPROVAL OF APPENDIX 5 OF THE SAP, INC. SOFTWARE LICENSE AGREEMENT IN THE AMOUNT OF $150,000 FOR TRAINING SERVICES RELATED TO THE IMPLEMENTATION OF THE ENTERPRISE RESOURCE PLANNING (ERP) SOFTWARE RECOMMENDATION Staff recommends that Council" 1.Approve and authorize the Mayor to execute a professional services agreement in the amount of $150,000 with SAP Inc., for Enterprise Resource Planning (ERP) software training services. 2.Authorize the City Manager or his designee to negotiate and execute one or more change orders to the contract with SAP for additional but unforeseen training needs which 1nay develop during the project, the total Yalue of which should not exceed $15,000. DISCUSSION In July 2002, Council approved the purchase of SAP’s ERP software and implementation services agreement with ea Consulting. A key C6~ponent of the software implementation is training on various aspects of the system. Two types of training requirements are associated with the ERP implementation: One type of training will focus on system implementation tailored to the City’s needs and requirements included within the ea consulting agreement, approved in July 2002. The second type of training will address SAP software use and configuration, system capabilities, connectivity and maintenance. Staff did not include the SAP training agreement (Attachment A) in the July 2002 approval package because the SAP training plan needed to be developed jointly with ea staff to identify the appropriate trainees and courses required in conjunction with the project plan. Staff’s training program will addresses pre-implementation and ongoing training needs. CMR:386:02 Page 1 of 3 There are two purchasing options for SAP training. Option one is "pay-as-you-go". Option two is to purchase a Preferred Card that offers an additional training bonus, at no cost, for bulk purchases over certain thresholds (e.g. $150,000 Preferred Card would receive a $4, 500 training bonus). The drawback of the Preferred Card is that the City would forfeit any training bonus, as well as remaining dollars that were not used within a twenty-four month period. Staff recommends that Council approve the purchase of the $150,000 SAP Preferred Card with a $15,000 contingency for SAP system training. The training plan will use up the card in 2003; therefore, staff does not anticipate an issue with the twenty four month usage condition. Selection Process No Request For Proposals were issued for this purchase. The City selected SAP software for the ERP system because SAP is the only authorized provider of SAP software courses. RESOURCE IMPACT The training expense will come from existing operating.budgets of the following funds: General Fund (mainly Administrative Services Department), Enterprise Funds, and Internal seivices Funds. The approval of this contract does not impact the Budget Stabilization R~serve. POLICY IMPLICATIONS This agreement does not represent any change to existing City policies. 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 A:Appendix 5: Software Training Services Agreement with SAP, Inc. PREPARED BY: KB PAIGt~ ~ Change Man’a/gement Lead, ERP Project Senior Technologist, Application Services CMR:386:02 Page 2 of 3 DEPARTMENTAL HEAD APPROVAL: CARL YE Director, A]Iministrative Services CITY MANAGER APPROVAL: EMILY HARRIS ON Assistant City Manager CMR:386:02 Page 3 of 3 Appendix $ATTACHMENT A effective September t3, 2002 ("Appendix") SAP PUBLIC SERVICES, INC, ("SAP") SOFt’WARE END-USER LICENSE AGREEMENT effective July 22, 2002 ("Agreement") with CITY OF’ P,~LO 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 previsions of this Appendix shall prevail and govern, and the contradicted or inconsistent provisions of the Agreement shall be deemed amended accordingly. Sco_£2g_~_of Services, As consideration for the payment of the fee set forth herein, SAP shall provide Licensee access to SAP’s regularly scheduled SAP Classroom Training; SAP Live Virtual Classrooms; SAP On-Site Training and SAP Solution A~demyclasses provided by SAP in the United S~ates only. A detailed list of courses, content, and schedules are available to Licensee on the SAP Education worldwide web site, www.sap.com/usa/education. Licensee may enroll in all SAP Classroom Training, SAP Live Virtual Classroom and SAP Solution Academy classes by calling SAP’s Central Registration at 1.888-777-1727, On- Site classes can be scheduled by contacting the SAP Education Help Desk at 1-877-876-7271, 2. Fees/Payment Te,D~t_s. For a fee of USD 150,000, Licensee Shall receive a SAP Preferred Card training fee credit totaling USD t54,500. Such fee shall be invoiced upon execution of this Agreement and is payable upon Licensee’s receipt of SAP’s invoice. Any training provided in excess of such training fee credit shall be invoiced at SAP’s then ¢urrent rates upon scheduling, without premium, and is payable by Licensee upon receipt of SAP’s invoice, At no time will any portion of the t~aining fee credit be refundable~ including at the conclusion of the Term set forth below, ~. The activation date for the SAP Preferred Card is the date that SAP receives full payment of the SAP Preferred Card fees specified above from Licensee, Classes taken pdor to such date can be applied to the SAP Preferred Card, Term. Th~ training fee credit set forth above shall be applied to the then current SAP training course fees until such time aS the traini=’=-~g fee credit is fully utilized or twenty.four (24) months after the Activation Date of Licensee’s SAP Ptefer:ed Card, whichever is sadist, TralnlnR Materials. SAP Training Materials provided (if any) are intended solely for the use of the individual student attending traini.ng and may not be copied, distributed or used for any other purpose, Licensee agrees that such Tra~nlng Materials are the Proprietary Information of SAP, Licensee agrees not to disclose, transfer, Or otherwise make available the Training Materials tO any third parties except as required by applicable law. 6,Course Administration. a) Enrollment in reaulafl.v...S_cb_ eduled S~P Classroom Tra rji.n,q, SAP Lly_e .Virtual Classreor,$ end S_A~, All SAP Classroom Training, SAP Live Virtual Classroom, and SAP Solution Academy course registration must be procesSed through SAP’s Central Registration. If no space is available on the date requested, an alternative date will be suggested wherepossible, b) Cancel ation_o.f~enrollment in re_~u_!arly scheduled SAP Classroom Trainina. SAP Live virtual Classrooms and_S_A_P. Solution..Academv. Licensee may submit cancellations by ~=mail or fax or by-calling SAWs Central Registration, If the cancellation is not confirmed in writing by SAP, Licensee remains liable for the full course fee associated with the class or classes. All cancellation fees will be applied to Licensee’s SAP Preferred Card without premium benefit. In the event of acancellation or the rescheduling of a ~ourse by Licensee, SAP will assess the following fees: 10 business days or mote before~t~g S~he,d~.u.le~L.~9 cancell~tlon~iarge ........................., to, ua,noss before,he scheduled o ass " ,3 business d__a.ys or lass before ~8~ ~cheduled ciasfl .... ~JI t~0% of total projected training, ~~ c) SAP On-Site Training Processing. All requests for SAP On.Site Training must be processed through SAP’s Educational Support Services Group (ESSG). Once confirmation of such a request is provided to Licenses by SAP’s On-Site Training Department, any changes in class dates or cancellations shall be subject to the terms of item 6(d) herein. The fees applied to Licensee’s SAP Preferred Card for On-Site Training classes with premium are applicable for the on-site rate only. All other costs such as travel and living expenses, equipment charges, freight, remote server connection fees, and books will b¢ applled to Licensee’s SAP Preferred Card without premium benefit. CONFIDENTIAL