HomeMy WebLinkAboutStaff Report 3566
City of Palo Alto (ID # 3566)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 5/6/2013
City of Palo Alto Page 1
Summary Title: Approval of a One-Year Extension of the Sierra Infosys
Contract for Annual SAP Support
Title: Approval of a One-Year Extension of the Sierra Infosys Contract
(C10135998) for Annual SAP Support in the amount of $250,000.00 per year
for the Support and Maintenance of SAP Industry-Specific Solution for
Utilities (IS-U), SAP Enterprise Central Component (ECC 6.0), Customer
Relationship Management System (CRM), Business Intelligence System (BI)
and Utilities Customer Electronic Services (UCES)
From: City Manager
Lead Department: IT Department
RECOMMENDATION
Staff recommends that the Council:
1. Approve, and authorize the City Manager or his designee to execute, the attached one
year usage-based professional services contract (Attachment A) with Sierra Infosys Inc. in
the amount not to exceed $250,000 per year for the support and maintenance of various
SAP modules. The contract will be for fiscal year 2014.
2. Approve, and authorize the City Manager or his designee to execute, a one year usage-
based professional services contract extension with Sierra Infosys Inc. in the amount not
to exceed $250,000 per year for the support and maintenance of various SAP modules.
The extension will be for fiscal year 2015. The total not-to-exceed value of the
agreement and renewal is $500,000.
MOTION
City of Palo Alto Page 2
I move to accept staff’s recommendation to approve and authorize the City Manager or his
designee to execute the attached one year usage-based professional services contract
(Attachment A) for fiscal year 2014, with an optional second-year extension for fiscal year 2015,
with Sierra Infosys Inc. for the support and maintenance of various SAP modules, in the amount
not to exceed $250,000 per year, with a total not-to-exceed value of $500,000.
BACKGROUND
The City’s history with SAP began in 2002 when the City selected SAP as its preferred vendor for
an Enterprise Resource Planning system with the purpose of integrating various business
processes within the City and to pave the path for the City to moving toward the direction of
electronic government. The SAP system has been running in the City since 2003, supporting
Accounting, Finance, Purchasing, Project Management, Plant Maintenance, Budgeting, Payroll,
Human Resource Management, and Service Order management. In 2009, the City completed a
major upgrade to the SAP ERP system and replaced the former utility billing system (Banner)
with the implementation of the SAP IS-U module, Customer Relationship Management, Utilities
Customer Electronic Services (also known as My Utilities Account customer portal) and Business
Intelligence systems.
By supporting the critical business processes in Finance, Procurement, HR, and Utilities’ meter-
read to billing, payment and collection SAP has become an integral part of City’s business
continuity.
Examples of the operational scope of SAP include:
Manages and maintains a City budget of over half billion dollars
Issues 11,000 A/P checks, processes 2,200 purchases documents, and issues 36,000
payroll checks each year
Generates 370,000 utilities invoices and collects approx. $220M for 30,500 utilities
accounts
Currently, 12,100 active customers registered to use “My Utilities Account” for e-bills
and online payments
Provides concise business information to support 38,000 incoming calls into the Utilities
Customer Service Center
Interfaces to City Business Partners such as Wells Fargo, Check Free, JP Morgan
(procurement card services), Green Waste (refuse), and non-SAP City systems
City of Palo Alto Page 3
City staff provides internal SAP resources and knowledge to support and maintain the following
six SAP systems: Enterprise Planning system, SAP Industry-Specific Utilities system, Customer
Relationship Management system, Utilities Customer Electronic Services system, Employee and
Manger Self-Service system, and Business Intelligence systems. To supplement staff support of
SAP, the City, on July 1, 2010, entered a three (3) year software consulting services contract
with Sierra Infosys Inc. in the amount of $750,000 In July 2011, to cope with the resource
shortage due to staff medical leave, the City amended the contract to include additional basis
system support in the amount of $84,000. Sierra’s existing contract will expire on June 30,
2013.
DISCUSSION
SAP is a highly configurable system with processes integrated via inter-linked configuration
rules in the various modules. SAP requires a high degree of specialized expertise to provide
effective ongoing maintenance and support. Sierra augments City staff resources in order to
adequately provide coverage across the depth and breadth of SAP.
For the past two and a half years, the City has leveraged Sierra’s expertise to support numerous
technical and functional areas. Sierra’s annual performance evaluations have been satisfactory.
Examples of Sierra’s support include the following:
Perform functional configuration for the various business modules
Provide assistance with functional troubleshooting specific complex business
operational issues
Provide assistance with technical troubleshooting in our various SAP environments
Provide assistance with authorization and security administration
Perform Oracle data base patch/release upgrade
Perform Support package upgrade to the latest version including all database tasks
Perform and document SAP portal system monitoring tasks
The IT Department and SAP Steering Committee will conduct an assessment of our current SAP
environment, business processes, support resources needs, and develop a strategic plan for the
Enterprise Resource Planning systems. The assessment is one of the proposed FY 2014 capital
City of Palo Alto Page 4
improvement projects. Until the full assessment report and Enterprise Resource Planning
strategic plan is ready, staff recommends extending the service contract with Sierra Infosys to
maintain current support levels.
RESOURCE IMPACT
With the new on-going Information Technology funding structure, funds for this project will
come from the Technology Internal Service Fund. Funds for this contract and extension are
available in the current 2013 and proposed 2014 budgets. The proposed contract amount of
$250,000 per year does not present an increase over current funding levels for the Sierra
contract.
POLICY IMPLICATIONS
Approval of these contracts is consistent with current City policies.
ENVIRONMENTAL REVIEW
This is not a project under the California Environmental Quality Act (CEQA).
Attachments:
C10135998 W-Sierra Infosys Amend No 2 (PDF)
FY14 Sierra Contract CMR (MinuteTraq vesion1) (DOC)
CMR291-10 (PDF)
1 Revision July 25, 2012
AMENDMENT NO. 1 TO CONTRACT NO. C10135998
BETWEEN THE CITY OF PALO ALTO AND
SIERRA INFOSYS, INC.
This Amendment No. 2 to Contract No. C10135998 (“Contract”) is entered into
April , 2013, by and between the CITY OF PALO ALTO, a California chartered
municipal corporation (“CITY”), and SIERRA INFOSYS, INC., a Texas corporation, authorized
to do business in California, located at 6001 Savoy Drive, Suite # 210, Houston, TX 77030,
Telephone: (713) 747-9693 (“CONSULTANT”).
R E C I T A L S:
A. The Contract was entered into between the parties for the maintenance and
support of SAP Applications; and
B. The parties wish to amend the Contract to extend for one year and make
other changes described herein;
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and
provisions of this Amendment, the parties agree:
SECTION 1. Section 2 is hereby amended to read as follows:
“SECTION 2. TERM. The term of this Agreement shall be from the date of its
full execution through June 30, 2014 with the option to extend the Agreement for a one-year
extension, unless terminated earlier pursuant to Section 19 of this Agreement.
SECTION 2. Section 4 is hereby amended to read as follows:
“SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to
CONSULTANT for performance of the Services described in Exhibit “A”, including both
payment for professional services and reimbursable expenses, shall not exceed One Million
Dollars ($1,000,000.00), over the four-year term of the Agreement, with annual payments not to
exceed $250,000.00 per year. In the event the parties exercise the option to extend the contract
for a one-year extension, the compensation to be paid to CONSULTANT for performance of the
Services described in Exhibit “A”, including both payment for professional services and
reimbursable expenses, shall not exceed One Million Two Hundred Fifty Thousand Dollars
($1,250,000.00), over the term of the Agreement with annual payments not to exceed
$250,000.00 per year. In the event Additional Services are authorized, the total compensation for
services and reimbursable expenses shall not exceed One Million Dollars ($1,000,000.00) or
shall not exceed One Million Two Hundred Fifty Thousand Dollars ($1,250,000.00) in the event
the parties exercise the option to extend the contract for a one-year extension. The applicable
rates and schedule of payment are set out in Exhibit “C-1”, entitled “HOURLY RATE
SCHEDULE,” which is attached to and made a part of this Agreement.
2 Revision July 25, 2012
Additional Services, if any, shall be authorized in accordance with and subject to the provisions
of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services
performed without the prior written authorization of CITY. Additional Services shall mean any
work that is determined by CITY to be necessary for the proper completion of the Project, but
which is not included within the Scope of Services described in Exhibit “A”.
SECTION 3. The following exhibit(s) to the Contract is/are hereby amended to
read as set forth in the attachment(s) to this Amendment, which are incorporated in full by this
reference:
a. Exhibit “C” entitled “COMPENSATION”
SECTION 4. Except as herein modified, all other provisions of the Contract,
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 No. 2 on the date first above written.
CITY OF PALO ALTO
____________________________
City Manager
APPROVED AS TO FORM:
_____________________________
Senior Asst. City Attorney
SIERRA INFOSYS, INC.
By:___________________________
Name:_________________________
Title:________________________
Attachments:
EXHIBIT "C": COMPENSATION
Professional Services
Rev June 2, 2010
Year 1 to Year 3
07/12/2010 to 07/12/2013
The CITY agrees to compensate the CONSULTANT for professional services performed in
accordance with the terms and conditions of this Agreement on a Time and Materials basis,
based on the hourly rate schedule attached as Exhibit C-1.
The compensation to be paid to CONSULTANT under this Agreement for all services
described in Exhibit “A” (“Services”) and reimbursable expenses shall not exceed
$750,000.00 ($250,000.00 per year). CONSULTANT agrees to complete all Services,
including reimbursable expenses, within this amount. In the event CITY authorizes any
Additional Services, the maximum compensation shall not exceed $750,000.00 ($250,000.00
per year). Any work performed or expenses incurred for which payment would result in a
total exceeding the maximum amount of compensation set forth herein shall be at no cost to
the CITY.
REIMBURSABLE EXPENSES
The administrative, overhead, secretarial time or secretarial overtime, word processing,
photocopying, in-house printing, insurance and other ordinary business expenses are included
within the scope of payment for services and are not reimbursable expenses. CITY shall
reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for
which CONSULTANT shall be reimbursed are:
A. Travel outside the San Francisco Bay area, including transportation and meals, will be
reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel
and meal expenses for City of Palo Alto employees.
B. Long distance telephone service charges, cellular phone service charges, facsimile
transmission and postage charges are reimbursable at actual cost.
All requests for payment of expenses shall be accompanied by appropriate backup
information. Any expense anticipated to be more than $250.00, shall be approved in advance
by the CITY’s project manager.
ADDITIONAL SERVICES
The CONSULTANT shall provide additional services only by advanced, written
authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request,
shall submit a detailed written proposal including a description of the scope of services,
schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including
reimbursable expenses, for such services based on the rates set forth in Exhibit C-1. The
additional services scope, schedule and maximum compensation shall be negotiated and
agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to
commencement of the services. Payment for additional services is subject to all requirements
and restrictions in this Agreement.
Professional Services
Rev June 2, 2010
Year Four
07/12/2013 to 06/30/2014
EXHIBIT “C”
COMPENSATION
The CITY agrees to compensate the CONSULTANT for professional services performed in
accordance with the terms and conditions of this Agreement on a Time and Materials basis,
based on the hourly rate schedule attached as Exhibit C-1.
The compensation to be paid to CONSULTANT under this Agreement for all services
described in Exhibit “A” (“Services”) and reimbursable expenses shall not exceed
$1,000,000.00 ($250,000.00 per year). CONSULTANT agrees to complete all Services,
including reimbursable expenses, within this amount. In the event CITY authorizes any
Additional Services, the maximum compensation shall not exceed $1,000,000.00
($250,000.00 per year). Any work performed or expenses incurred for which payment would
result in a total exceeding the maximum amount of compensation set forth herein shall be at
no cost to the CITY.
REIMBURSABLE EXPENSES
The administrative, overhead, secretarial time or secretarial overtime, word processing,
photocopying, in-house printing, insurance and other ordinary business expenses are included
within the scope of payment for services and are not reimbursable expenses. CITY shall
reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for
which CONSULTANT shall be reimbursed are:
A. Travel outside the San Francisco Bay area, including transportation and meals, will be
reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel
and meal expenses for City of Palo Alto employees.
B. Long distance telephone service charges, cellular phone service charges, facsimile
transmission and postage charges are reimbursable at actual cost.
All requests for payment of expenses shall be accompanied by appropriate backup
information. Any expense anticipated to be more than $250.00, shall be approved in advance
by the CITY’s project manager.
ADDITIONAL SERVICES
The CONSULTANT shall provide additional services only by advanced, written
authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request,
shall submit a detailed written proposal including a description of the scope of services,
schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including
reimbursable expenses, for such services based on the rates set forth in Exhibit C-1. The
additional services scope, schedule and maximum compensation shall be negotiated and
agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to
commencement of the services. Payment for additional services is subject to all requirements
and restrictions in this Agreement.
Professional Services
Rev June 2, 2010
Year Five [One (1) Year-Extension]
07/12/2014 to 06/30/2015
EXHIBIT “C”
COMPENSATION
The CITY agrees to compensate the CONSULTANT for professional services performed in
accordance with the terms and conditions of this Agreement on a Time and Materials basis,
based on the hourly rate schedule attached as Exhibit C-1.
The compensation to be paid to CONSULTANT under this Agreement for all services
described in Exhibit “A” (“Services”) and reimbursable expenses shall not exceed
$1,250,000.00 ($250,000.00 per year). CONSULTANT agrees to complete all Services,
including reimbursable expenses, within this amount. In the event CITY authorizes any
Additional Services, the maximum compensation shall not exceed $1,250,000.00
($250,000.00 per year). Any work performed or expenses incurred for which payment would
result in a total exceeding the maximum amount of compensation set forth herein shall be at
no cost to the CITY.
REIMBURSABLE EXPENSES
The administrative, overhead, secretarial time or secretarial overtime, word processing,
photocopying, in-house printing, insurance and other ordinary business expenses are included
within the scope of payment for services and are not reimbursable expenses. CITY shall
reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for
which CONSULTANT shall be reimbursed are:
A. Travel outside the San Francisco Bay area, including transportation and meals, will be
reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel
and meal expenses for City of Palo Alto employees.
B. Long distance telephone service charges, cellular phone service charges, facsimile
transmission and postage charges are reimbursable at actual cost.
All requests for payment of expenses shall be accompanied by appropriate backup
information. Any expense anticipated to be more than $250.00, shall be approved in advance
by the CITY’s project manager.
ADDITIONAL SERVICES
The CONSULTANT shall provide additional services only by advanced, written
authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request,
shall submit a detailed written proposal including a description of the scope of services,
schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including
reimbursable expenses, for such services based on the rates set forth in Exhibit C-1. The
additional services scope, schedule and maximum compensation shall be negotiated and
agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to
commencement of the services. Payment for additional services is subject to all requirements
and restrictions in this Agreement.
CMR: 3566:13291:10 Page 1 of 5
TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT: INFORMATION
TECHNOLOGY
DATE: MAY 9APRIL XX, 2013 CMR:
3566XXX:13
REPORT TYPE: ACTION
SUBJECT: Approval of a One Year Software Consulting Services extension of contract
(C10135998) with the an opOptional sSecond yYear extension with Sierra Infosys Inc. in
the Amount of $2150,000 per year for the Support and Maintenance of SAP Industry-
Specific Solution for Utilities (IS-U), SAP Enterprise Central Component (ECC 6.0),
Customer Relationship Management System (CRM), Business Intelligence System (BI) and
Utilities Customer Electronic Services (UCES).
RECOMMENDATION
Staff recommends that the Council:
1. Approve and authorize the City Manager or his designee to execute the attached one
year usage-based professional services agreement contract (Attachment A) with
Sierra Infosys Inc. in the amount not to exceed $2150,000 per year for the support
and maintenance of various SAP modules. The contract will be for fiscal years 2014.
and 2015. The total not-to-exceed value of this agreement is $300,000. This is a
reduction of the current contract value of $250,000 per year.
2. Approve and authorize the City Manager or his designee to execute a one year usage-
based professional services contract extension with Sierra Infosys Inc. in the amount
not to exceed $250,000 per year for the support and maintenance of various SAP
modules. The extension will be for fiscal year 2015.Authorize the City Manager or his
designee to execute the renewal agreement at the rate of $150,000 per year for a
maximum of two years. The total not-to-exceed value of the agreement and renewal
this agreement is $300,000 $500,000.
MOTION
I move to accept staff’s recommendation to approve and authorize the City Manager or his
designee to execute the attached one year usage-based professional services contract
(Attachment A) for fiscal year 2014, with an optional second year extension for fiscal year
2015, with Sierra Infosys Inc. for the support and maintenance of various SAP modules, in
the amount not to exceed $250,000 per year, with a total not-to-exceed value of $500,000.
[David R – can you please recommend a motion?]
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CMR: 3566:13291:10 Page 2 of 5
BACKGROUND
The City’s history with SAP began in 2002 when the City selected SAP as its preferred
vendor for an Enterprise Resource Planning system with the purpose of integrating various
business processes within the City and to pave the path for the City to moving toward the
direction of electronic Government. In fiscal year 2003, the implementation of the above
SAP core modules were completed and the SAP system has been running in the City since
2003, supporting Accounting, Finance, Purchasing, Project Management, Plant
Maintenance, Budgeting, Payroll, Human Resource Management, and Service Order
management. In 2009, tThe City completed a major upgrade to the SAP ERP system in
2009 and , which also replaced the former utility billing system (Banner) with the
implementation of the SAP IS-U module, Customer Relationship Management, Utilities
Customer Electronic Services (also known as My Utilities Account customer portal) and
Business Intelligence systems.
By supporting the critical business processes in Finance, Procurement, HR, and Utilities’
meter-read to billing, payment and collection SAP has become thean integral part of City’s
business continuity.
SAP is the system of record for the City and represents the cornerstone of the business
continuity by supporting critical business processes in Finance, Financial, Procurement,
HR processes, and Utilities’ meter-read to billing, payment and collection processes.
Some Eexamples of the values generated by services that SAP provides include:
Manages and maintains a City budget of over half billion dollars
Issues 11,000 A/P checks, processes 2,200 purchases documents, and issues 36,000
payroll checks each year
Generates 370,000 utilities invoices and collects approx. $220M for 30,500 utilities
accounts
Currently, 12,100 active customers registered to use “My Utilities Account” for e-
bills and online payments
Provides concise business information to support 38,000 incoming calls into the
Utilities Customer Service Center
Interfaces to City Business Partners such as Wells Fargo, Check Free, JP Morgan
(procurement card services), Green Waste (refuse), Hartford, and ICMA as well as
to non-SAP City systems
To complement internal SAP support resource and knowledge in providing support and
maintainancemaintenance services to the following six systems: Enterprise Planning
system, SAP Industry-Specific Utilities system, Customer Relationship Management
system, Utilities Customer Electronic Services system, Employee and Manger Self-Service
system, and Business Intelligence systems, onOn July 1, 2010 the City we entered into a
CMR: 3566:13291:10 Page 3 of 5
three (3) year software consulting services contract with Sierra Infosys Inc. in the amount
of $750,000 for the Support and Maintenance of SAP Industry-Specific Solution for
Utilities (IS-U) , SAP Enterprise Central Component (ECC 6.0), Customer Relationship
Management System (CRM), Business Intelligence System (BI) and Utilities Customer
Electronic Services (UCES). In July 2011, to cope with the resouecresource shortage due to
staff medical leave, the Ccity amended the contract to include additional basis system
support in the amount of added funds in the amount of $84,000 to account for a staff
member on medical leave in order to minimize business impacts. Sierra’s existing The
current contract will expire is due to expire on June 30, 2013.
DISCUSSION
SAP is a highly configurable system with processes integrated via inter-linked
configuration rules in the various modules. SAP requires a high degree of specialized
expertise to provide effective ongoing maintenance and support. Sierra augments city staff
in order to adequately provide coverage across the depth and breadth of SAP.
For the past two and a one half years, through a collaborative working relationship the
City has leveraged Sierra’s Sierra’s expertise to support numerous technical and functional
areas. Sierra’s annual performance evaluations have been satisfactory. has yielded
Satisfactory result.
current support contract with Sierra Infosys Inc. has been leveraged to provide adequate
support. Sierra has been providing support in both technical and functional areas of the
system to supplement the City internal resources and has established a collaborative
working relationship.
These areas of HighlighsExamples of Sierra’s support include the following:
Perform functional configuration for the various business modules
Provide assistance with functional troubleshooting specific complex business
operational issues
Provide assistance with technical troubleshooting in our various SAP environments
Provide assistance with authorization and security administration
Perform Oracle data base patch/release upgrade
Perform Support package upgrade to the latest version including all database tasks
Perform and document SAP portal system monitoring tasks
Moving forward, tTThe IT Department and SAP Steering Committee will have proposed
to cconduct an assessment onof identified a requirement to assess our current SAP
environment, business processes, support resources needs, and to develop a strategic plan
for the ERP (Enterprise Resource Planning systems) strategy; T the assessment is one of
the proposed FY 2014 capital improvement projects. is will tentatively occur during FY
2014. Upon completion of the ERP assessment, management will be better able to forecast
CMR: 3566:13291:10 Page 4 of 5
system resource requirements. This will also enable staff to define a more precise scope of
work for future professional services contracts. Until the full assessment report and
Enterprise Resource Planning steategicstrategic plan is ready, In the meanwhile, staff
recommends extending the service contract with Sierra Infosys to maintain current
support levels.
RESOURCE IMPACT
As a result of With the new the on-going Information Technology funding structure, funds
for this project will come from have been included in the Technology Internal Service
Fund. Fund (ISF) 20131-20142 budget.
Funds for this contract and extension are available in the current 2013 and proposed 2014
budgets.
POLICY IMPLICATIONS
Approval of these contracts is consistent with current City policies.
ENVIRONMENTAL REVIEW
This is not a project under the California Environmental Quality Act (CEQA).
CMR: 3566:13291:10 Page 5 of 5
PREPARED BY: JENNIFER LEU, Manager,
Information Technology
REVIEWED BY: DAVID RAMBERG
Assistant Director, Administrative
Services
TOMM MARSHALL
Assistant Director, Utilities Engineering
TOM AUZENNE
Assistant Director, Utilities Customer
Support Services
DEPARTMENT HEAD:
_____________________________________
Jonathan Reichental, CIO
CITY MANAGER APPROVAL: _________________________________
JAMES KEENE, City Manager
ATTACHMENTS
Attachment A: Contract
TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER
DATE: JULY 12, 2010
REPORT TYPE: ACTION
City of Palo Alto
City Manager's Report
DEPARTMENT: ADMINISTRATIVE
SERVICES
CMR: 291:10
SUBJECT: Approval of Three Year Software Consulting Services Contract with Sierra
Infosys Inc. in the Amount of $750,000 for the Support and Maintenance of
SAP Industry-Specific Solution for Utilities, SAP Financials, Customer
Relatiouship Management System, Business Intelligence System and Utilities
Customer Electronic Services
RECOMMENDATION
Staff recommends that the Council:
1. Approve and authorize the City Manager or his designee to execute the attached usage
based professional services agreement (Attachment A) with Sierra Infosys Inc. in the
amount not to exceed $250,000 per year for the support and maintenance of various SAP
modules. The contract will be for fiscal years 2011, 2012 and 2013. The total not-to
excced value of this agreement is $750,000.
2. Authorize the City Manager or his designee to execute the renewal 'agreement at the rate of
$250,000 per year for years two and three for software consulting services.
BACKGROUND
The City recently completed a major upgrade to the SAP system, which integrated the former
utility billing system. The upgrade project totaled $8.8 million, spanned more than two-years,
required a three-month Council-approved extension, nine-months of Council-approved extended
post implementation support, with consulting services provided by Axon ConSUlting. This
proposed contract moves past the SAP upgrade project and into normal system support as
described below.
The City's history with SAP began in 2002 when the City selected SAP as its preferred vendor
for an Enterprise Resource Planning system with the purpose of integrating various business
processes within the City and to pave the path for the City to moving toward the direction of
electronic Government. In fiscal year 2003, the implenlentation of the above SAP core modules
were completed and the SAP system has been running in the City since, supporting Accounting,
CMR:291:IO Page I of 5
Purchasing, Project Management, Plant Maintenanee, Budgeting, Payroll, Human Resource
Management, and Service Order management.
On July 23, 2007, the Council approved contract changes with SAP for the SAP upgrade (from
release 4.6 C to ECC6.0) and implementation of SAP's industry-specific solution for utilities
(IS-U) to replace the aging Utilities Department's Customer Information System (CIS). The
SAP upgrade was completed in fiscal year 2008 and the implementation of the SAP IS-U,
Customer Relationship Management, and Business Inte\ligenee systems were subsequently
completed in fiscal year 2009. These systems replaced the old Utilities Customer Information
System known as Banner. Annual support for the Banner system was in the $200,000 per year
rangc.
Similar to many major project implementations the SAP IS-U projcet, since go-live in May 2009,
has gone through a period of post go-live support, issue resolution, and change management. To
ensure smooth transition from project post go-live support to normal support and maintenance,
the Axon consultants who did the original project were retained to assist staff to carry out the
project post go-live support from September 2009 to June 2010. The systems now are stabilized
and the City's SAP team is transitioning to normal support and maintenance where system
stability, system tuning and continuous improvements are the key objectives.
DISCUSSION
With the implementation of the SAP IS-U project, SAP has become the cornerstone of the City'S
business continuity, supporting Financial, Procurement, HR processes, and Utilities' meter-read
to billing, payment and collection processes. This centralization relocated the Utilities customer
information and support system from Banner to SAP. As the system became integrated with the
utilities modules, the breadth and depth of SAP knowledge and skill requirements for effective
SAP support and maintenance also has increased in these areas. Compared to the prior stand
alonc Banner system, SAP is a highly configurable system with processes integrated via inter
linked configuration rules in the various modules. Configuration change requires thorough
knowledgc of multiple related modules and wbile these skills have been developing since the
system go-live on May 2009, the City's current resource for configuration and trouble-shooting
for the mission critical areas of the Utilities modules are insufficient.
After analyzing the past 12 months of SAP support and maintenance requests and considering
the scope and complexity and limited in-house resource capacity and capability; the SAP Project
Management Office (PMO) recommended that leveraging an extemal vendor to supplement the
City internal resources would be the best solution for the next three years.
The support and maintenance consulting cost will be similar to that under the former Banner
system. The SAP modules for Finance, HR, and Procurcment, in place since 2003 will also be
supported under this contract at approximately 20% of the contract.
CMR:291:IO Page 2 of 5
F 11 fh d o owmg IS a summary 0 t even or se cctton process.
Proposal Description/Number NamelNumber of Proposal here
, Proposed Length of Contract ~months . __ .-
Total Days to Rcspond to Proposal
i Pre-proposal Meeting Date 4/1912010
Number of Attendees at Pre-proposal 21
Meeting
Number of Proposals Received: 9
Company Name ' Location (city, Selected for oral
!ltate) interview? ' .
1. Alijon Consulting Walnut Creek,CA No
. 2. EA Consulting Folsom, CA Yes
3. HCL-Axon Jersey City, NJ Yes
4. HPC America San Ramon, Ca No
5. CSC El Segnado, CA No
6. Sage Group Hazlet, NJ Yes
7. Sierra Infosys Houston TX Yes
i 8. Terra Information Group, Inc. Naperville, IL No
9. The Basis Group! Inc. Hales Corners, WI Yes
Range of Proposal Am,ounts Submitted
$137,915 to $lM
An evaluation committee consisting of six staff from Administrative Services and Utilities
Departtnents reviewed the proposals. From the nine RFPs submitted, the evaluation committee
selected five firms that met the first level of ranking to participate in an oral interview on Jnae 1,
2010. Firms were not invited to interview if their proposals were inadequate or out of scope.
The committee carefully rated and ranked each frrm's qualifications and submittal in response to
the criteria identified in the RFP. Criteria used for the, evaluation is as follow:
Criteria
Weight
1. Quality and completeness of proposal 5%
2. Qualification and experience of proposed project manager and key staff 20%
3. Similar experience and expertise in the type of work required 25%
4. Demonstrated understanding of the scope of services required, timeframe, 20%
Scheduling ability, ability to provide back-up or follow-up services, if needed
5. Financial stability of Firm, current and looking forward 10%
6. Thc proposed fee schedule relative to the services to be provided 20%
Sierra Infosys, Inc was selected unanimously by all RFP evaluation committee members as the
first choice with the reasons summarized as:
I. The work model proposed by Sierra best complements City's existing 1'1 level support
capabilitics; with Sierra providing 2nd level support on as-needed basis. Under this
model City staff is contacted first for all SAP issues that come to the Helpdesk. The 2nd
level of support is only used if City staff needs assistance with a particular issue. This
CMR:291:10 Page 3 of 5
!
,
model enables the City to access Sierra's support resource pool to resolve unforeseen
critical system problems swiftly and provides the City with sufficient flexibility to
schedule plamled maintenance work effectively. Sierra's perfonnance will be measured
according to the service level agreement.
2. Sierra's proven implementation and support maintenance experience and expertise in
similar environments, such as City of San Diego, State of Kentucky, Clark County,
Nevada, and Broward County School District. Reference check results collected £i'om
these organizations are consistent and positive.
3. What differentiates Sierra Infosys from the other vendors responding to the Palo Alto
RFP is their strategic focus on providing Support and Maintenance services to mid-size
organization such as City of Palo Alto and their commitment to retain ample in-house
knowledge of SAP for prompt problem diagnosis and resolution of client problems.
Over the years, Sierra also has established a deep relationship with SAP Global
Support. Sierra has been selected by as a partner for the SAP GSS-Global Network of
Subject Matter Experts, providing quick resource deployment to SAP clients, when
needed.
The City Of Palo Alto SAP Steering Committee comprised of the directors of the
Administrative Services, Public Works and Utilities Departments are in agreement with the
selection of Sien'a Infosys, Inc for the work outlined in the City's Request for Proposal.
RESOURCE IMPACT
As a result of the on-going Information Teehnology funding structure, funds for this project have
been included in the Technology Internal Scrvice Fund (ISF) 2011-2012 budget.
POLICY IMPLICATIONS
Approval of these contracts is consistent with current City policies.
ENVIRONMENTAL REVIEW
This is not a project under the California Environmental Quality Act (CEQA).
CMR:191:l0 Page 4 of 5
PREPARED BY:
REVIEWED BY:
DEPARTMENT HEAD:
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
ATTACHMENTS
Attachment A: Contract
CMR:291:10
JENNIFER LEU, Manager, Information Technology
DA VIO RAMBERG
Assistant Director, Administrative Services
TOMM MARSHALL
Assistant Director, Utilities Engineering
TOM AUZENNE
Assistant Director, Utllities Customer Support Services
LALO PEREZ, Director of Admini$trative Services
ryJAMES KEENE
City Manager
\ .
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ATTACHMENT A
CITY. OF J?ALO ALTO CONTRACT NO. CI0135998
AGREEMENT BETWEEN THE CITY 01' PALO ~LTO AND SIERRA INFOSYS INC.
FOR PROI'ESSIONAL SERVICES
PROVISION SAP APPLICATION MAINTENANCE SUPPORT
This Agreement is entered into on this 13TH day of July, 2010, ("Agreement") by
and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"),
and SIERRA INFOSYS INC., a Texas Corporation authorized to do business in California, located
at 6001 Savoy Drive, Suite #210, Houston, TX, 77030 (PH) 713-747-9693 ("CONSULTANT").
RECITALS
The following recitals are a substantive portion of this Agreement.
A. CITY intends to maintain SAP Applications ("Project") and desires to engage a consultant to
provide Maintenance Support Consultant Services in connection with the Project ("Services").
B. CONSULTANT has represented that it has the necessary professional expertise,
qualifications, and capability, and all required licenses and/or certifications to provide the Services.
C. CITY in reliance on these representations desires to engage CONSULT ANT to provide the
Services as more fully described in Exhibit "A", attached to and made a part of this Agreement.
NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, this
Agreement, the parties agree:
AGREEMENT
SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described in
Exhibit "A" in accordance with the terms and conditions contained in this Agreement. The
performance of all Services shall be to the reasonable satisfaction of CITY.
D Optional On-Call Provision (This provision only applies if checked and only applies to on-call
agreements.)
Services will be authorized by the CITY, as needed, with a Task Order assigned and approved by the
CIYY's Project Manager. Each Task Order shall be in substantially the same form as Exhibit A-I.
Each Task Order shall designate a City Project Manager and shall contain a specific scope of work, a
specific schedule of performance and a specific compensation amount. The total price of all Task
Orders issued under this Agreement shall not exceed the amount of Compensation set forth in
Section 4 of this Agreement. CONSULTANT shall only be compensated for work performed under
an authorized Task Order and the CITY may elect, but is not required, to authorize work up to the
maximum compensation amount set forth in Section 4.
ProfessiDrud Services
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SECTION 2. TERM.
The term ofthis Agreement shall be from the date ofits full execution through July 12, 2013,
unless terminated earlier pursuant to Section 19 of this Agreement.
OR
The term of this Agreement shall be from the date of its full execution through completion of the
services in accordance with the Schedule of Performance attached as Exhibit "B" unless terminated
earlier pnrsuant to Section 19 of this Agreement.
SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of
Services under this Agreement. CONSULTANT shall complete the Services within the term of this
Agreement and in accordance with the schedule set forth in Exhibit "B", attached to and made a part
of this Agreement. Any Services for which times for performance are not specified in this Agreement
shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner
based upon the circumstances and direction communicated to the CONSULTANT. CITY's
agreement to extend the term or the schedule for performance shall not preclude recovery of damages
for delay if the extension is required due to the fault of CONSULTANT.
SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to
CONSULTANT for performance of the Services described in Exhibit "A", including both
payment for professional services and reimbursable expenses, shall not exceed Seven Hundred
Fifty Thousand Dollars, over the three year term of the Agreement ($750,000.00), with annual
payments not to exceed $250,000.00 per year .. In the event Additional Services are authorized,
the total compensation for services and reimbursable expenses shall not exceed Seven Hundred
Fifty Thousand Dollars ($750,000.00). The applicable rates and schedule of payment are set out
in Exhibit "C-I", entitled "HOURLY RATE SCHEDULE," which is attached to and made a part
ofthis Agreement.
Additional Services, if any, shall be authorized in accordance with and subject to the provisions of
Exhibit "C". CONSULTANT shall not receive any compensation for Additional Services performed
without the prior written authorization of CITY. Additional Services shall mean any work that is
determined by CITY to be necessary for the proper completion of the Project, but which is not
included within the Scope of Services described in Exhibit "A".
SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly
invoices to the CITY describing the services performed and the applicable charges (including an
identification of personnel who performed the services, hours worked, hourly rates, and reimbursable
expenses), based upon the CONSULTANT's billing rates (set forth in Exhibit "C-l "). If applicable,
the invoice shall also describe the percentage of completion of each task. The information in
CONSULTANT's payment requests shall be subject to verification by CITY. CONSULT ANT shall
send all invoices to the CITY's project manager at the address specified in Section 13 below. The
CITY will generally process and pay invoices within thirty (30) days of receipt.
SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be
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performed by CONSULTANT or under CONSULTANT's supervision. CONSULTANT represents
that it possesses the professional and technical personnel necessary to perform the Services required
by this Agreement and that the personnel have sufficient skill and experience to perform the Services
assigned to them. CONSULTANT represents that it, its employees and subconsultants, if pennitted,
have and shall maintain during the term of this Agreement all Iieenses, permits, qualifications,
insurance and approvals of whatever nature that are legally required to perform the Services.
All of the services to be furnished by CONSULTANT under this agreement shall meet the
professional standard and quality that prevail among professionals in the same discipline and of
similar knowledge and skill engaged in related work throughout California under the same or similar
circumstances.
SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itselfinformed of and
in compliance with all federal, state and local laws, ordinances, regulations, and orders that may
affect in any manner the Project or the performance of the Services or those engaged to perform
Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all
charges and fees, and give all notices required by law in the performance of the Services.
SECTION 8. ERRORS/OMISSIONS. CONSULTANT shall correct, at no cost to CITY, any and
all errors, omissions, or ambiguities in the Services rendered to CITY, provided CITY gives
appropriate notice to CONS UL T ANT. If CONSULTANT has prepared plans and specifications or
other design documents to construct the Project, CONSULTANT shall be obligated to correct any
and all errors, omissions or ambiguities discovered prior to and during the course of the Project.
This obligation shall survive termination of the Agreement.
SECTION 9. COST ESTIMATES. If this Agreement pertains is the design of a publie works
prejeot, C()'NSULTf~IT shall Sllblllcit estimates of pro19allle eonstruction BOSts at eaeh phase of
deSigfl sa19mittal. l[the totsl estimated eonstruetion eost at any sabmittal elteeeds ten pareent (1 0%)
of.the CITY's statee. eonstruetion lme.get; CONSULTA"IT shall mal(e reeemmendations to the CITY
for aligning the PROJECT e.esign with the badge!, ineorporate CITY approyed reeommentiations,
and revise the design to meet the Pre;ieet 1gedge!, at HO additional eost to CITY. Section Not
Applicable.
SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing
the Services under this Agreement CONSULT ANT, and any person employed by or contracted with
CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an
independent contractor and not an agent or employee of the CITY.
SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of
CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or
transfer any interest in this Agreement nor the perfonnance of any of CONSULTANT's obligations
hereunder without the prior written consent of the city manager. Consent to one assignment will not
be deemed to be consent to any subsequent assignment. Any assignment made without the approval
of the city mauager will be void.
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SECTION 12. SUBCONTRACTING.
!8IOption A: No Subcontractor: CONSULTANT shall not subcontract any portion of the work to
be performed under this Agreement without the prior written authorization of the eity manager or
designee.
DOption B: Subcontracts Authorized: Notwithstanding Section 11 above, CITY agrees that
subconsultants may be used to complete the Serviees. The subconsultauts authorized by CITY to
perform work on this Project are:
CONSULTANT shall be responsible for directing the work of any subconsultants and for any
compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning
compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a
subconsultaut. CONSULTANT shall change or add subconsultauts only with the prior approval of
the city manager or his designee.
SECTION 13. PROJECr MANAGEMENT. CONSULT ANT will assign Robert Nyman as
the Account Executive to have supervisory responsibility for the performance, progress, and
execution of the Services and Fazle Navqi as the Project Manager/Support
S e rv ic e s Manager to represent CONSULTANT during the day-to-day work on the Project. If
cireumstances cause the substitution of the Account Executive, Project Manager/Support Services
Manager, or any other key personnel for any reason, the appointment of a substitute Account
Executive and the assignment of any key new or replacement personnel will be subject to the prior
written approval of the CITY's project manager. CONSULTANT, at CITY's request, shall promptly
remove personnel who CITY fmds do not perform the Services in an acceptable manner, are
uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to
the safety of persons or property.
The City's project manager is Jennifer Leu, Administrative Services Department, Information
Technology Services Division, 250 Hamilton Avenue, Palo Alto, CA 94303, Telephone: 650-853-
8 I S9. The project manager will be CONSULTANT's point of contact with respect to performance,
progress and execution of the Services. The CITY may designate an alternate CITY projcct manager
from time to time.
SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including
without Ihnitation, all writings, drawings, plans, reports, specifications, calculations, documents,
other materials and copyright interests developed under this Agreement shall be and remain the
exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrces
that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested
in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual
property rights in favor of the CITY. Neither CONSULT ANT nor its contractors, if any, shall make
any of such materials available to any individual or organization without the prior written approval of
the City Manager or designee. CONSULTANT makes no representation of the suitability of the
work product for use in or application to circumstances not contemplated by the scope of work.
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SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during
the term of this Agreement and for three (3) years thereafter, CONSULT ANT's records pertaining to
matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such
records for at least three (3) years after the expiration or earlier termination of this Agreement.
SECTION 16. INDEMNITY.
OIOption A applies to the following design professionals pursuant to Civil Code Section
2782.8: architects; landscape architects; registered professional engineers and licensed
professional land surveyors.] 16, I, To the fullest extent pennitted by law, CONSULTANT shall
protect, indemnifY, defend and hold harmless CITY, its Council members, officers, employees and
agents (each an "Indemnified Party") from and against any and all demands, claims, or liability of
any nature, including death or injury to any person, property damage or any other loss, including all
costs and expenses of whatever nature including attorneys fees, experts fees, court costs and
disbursements ("Claims") that arise out of, pertain to, or relate to the negligence, recklessness, or
willful misconduct of the CONSULTANT, its officers, employees, agents or contractors under this
Agreement, regardless of whether or not it is caused in part by an Indemnified Party,
~IOption B applies to any eonsultant who does not qualify as a design professional as defined
in Civil Code Section 2782.8.) 16.1. To the fullest extent permitted by law, CONSULT ANT shall
protect. indemnifY. defend and hold harmless CITY, its Council members, officers, employees and
agents (each an "Indemnified Party") from and against any and all demands, claims, or liability of
any nature, including death or injury to any person, property damage or any other loss, including all
costs and expenses of whatever nature including attorneys fees, experts fees, court costs and
disbursements ("Claims") resulting from, arising out of or in any manner related to performance or
nonperformance by CONSULTANT, its officers, employees, agents or contractors under this
Agreement, regardless of whether or not it is caused in part by an Indemnified Party.
16.2, Notwithstanding the above, nothing in this Section 16 shall be construed to
require CONSULTANT to indemnifY an Indemnified Party from Claims arising from the active
negligence, sole negligence or willful misconduct of an Indemnified Party,
16.3, The acceptance of CONSULTANT's services and duties by CITY shall not
operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive
the expiration or early termination of this Agreement.
SECTION 17. WAIVERS. The 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, will not
be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of
any subsequent breach or violation of the same or of any other term, covenant, condition, provision,
ordinance or law,
SECTION 18. INSURANCE.
18.1 , CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full
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force and effect during the term of this Agrecment, the insurance coverage described in Exhibit "D".
CONSU'LT ANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an
additional insured under any general liability or automobile policy or policies.
18.2. All insurance coverage required hereunder shall be provided through carriers
with AM Best's Key Rating Guide ratings of A -: VII or higher which are licensed or authorized to
transact insurance business in the State of California. Any and all contractors of CONSULTANT
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 additional
insured under such policies as required above.
18.3. 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 will contain an endorsement stating that the insurance is primary coverage and will not
be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the
Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification,
CONSULTANT shall be responsible for ensuring that current certi.ficates evidencing the insurance
are provided to CITY's Purchasing Manager during the entire term of this Agreement.
18.4. The procuring of such required policy or policies of insurance will not be
construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions
of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be
obligated for the full and total anlOunt of any damage, injury, or loss caused by or directly arising as
a result of the Services performed under this Agreement, including such damage, injury, or loss
arising after the Agreement is terminated or the term has expired.
SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES.
19.1. The City Manager may suspend the performance of the Services, in whole or
in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written
notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately
discontinue its performance of the Services.
19.2. CONSULTANT may terminate this Agreement or suspend its performance of
the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a
substantial failure of performance by CITY.
19.3. Upon such suspension or termination, CONSULTANT shall deliver to the
City Manager immediately any and all copies of studies, sketches, drawings, computations, and other
data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to
CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will
become the property of CITY.
19.4. Upon such suspension ortermil1ation by CITY, CONSULTANT will be paid
for the Services rendered or materials delivered to CITY in accordance with the scope of services on
or before the effective date (Le., 10 days after giving notice) of suspension or tenninatiol1; provided,
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however, if this Agreement is suspended or terminated on account of a default by CONSULTANT,
CITY will be obligated to compensate CONSULTANT only for that portion of CONSULT ANT's
services which are of direct and immediate benefit to CITY as such determination may be made by
the City Manager acting in the reasonable exercise ofhislher discretion. The following Seetions will
survive any expiration or termination of this Agreement: 14, 15, 16, 19.4,20, and 25.
19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will
operate as a waiver on the part of CITY of any of its rights under this Agreement.
SECTION 20. 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 a copy to the Purchasing Manager, address sarue as above for City Clerk
To CONSULTANT: Attention of the project director
at the address of CONSULTANT recited above
SECTION 21. CONFLICT OF INTEREST.
21.1. In accepting this Agreement, CONSULTANT 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.
21.2. CONSULTANT further covenants that, in the performance of this Agreement,
it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT
certifies that no person who has or will havc any financial intcrest 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.
21.3. If the Project Manager determines that CONSULTANT is a "Consultant" as
that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT
shall be required and agrees to file the appropriate financial disclosure documents required by the
Palo Alto Municipal Code and the Political Reform Act.
SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section
2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not
discriminate in the employment of any person because of the race, skin color, gender, age, religion,
disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status,
weight or height of such person. CONSULTANT acknowledges that it has read and understands the
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provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination
Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section
2.30.510 pertaining to nondiscrimination in employment.
SECTJON23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE
REOUIREMENTS. CONSULTANT shall comply with the CITY's Environmentally Preferred
Purchasing policies which are available at the CITY's Purchasing Division, Administrative Services
Department, incorporated by reference and may be amended from time to time. CONSULTANT
shall comply with waste reduction, reuse, recycling and disposal requirements of the CITY's Zero
Waste Program. Zero Waste best practices include first minimizing and reducing waste; second,
reusing waste and third, recycling or composting waste. In particular, Consultant shall comply with
the following zero waste requirements:
• All printed materials provided by Consultant to CITY generated from a personal
computer and printer including but not limited to, proposals, quotes, invoices,
reports, and public education materials, shall be double-sided and printed on a
minimum of 30% or greater post-consumer content paper, unless otherwise approved
by the City's Project Manager. Any submitted materials printed by a professional
printing company shall be a minimum of30% or greater post-consumer material and
printed with vegetable based inks.
• Goods purchased by Consultant on behalf of the CITY shall be purchased in
accordance with the CITY's Environmental Purchasing Policy including but not
limited to Extended Producer Responsibility requirements for products and
packaging. A copy of this policy is on file at the Purchasing Office.
• Reusable/returnable pallets shall be taken back by the Consultant, at no additional
cost to the CITY, for reuse or recycling. Consultant shall provide documentation
from the facility accepting the pallets to verifY that pallets are not being disposed.
SECTION 24. NON-APPROPRIATION
24.1. 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
(a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal
year, or (b) at anytime within a fiscal year in the event that funds are only appropriated for a portion
of the fiscal year and funds for this Agreement are no longer available. This section shall take
precedence in the event of a conflict with any other covenant, term, condition, or provision of this
Agreement.
SECTION 25. MISCELLANEOUS PROVISIONS.
25.1. This Agreement will be governed by the laws of the State of California.
25.2. 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 in the County of Santa Clara, State of
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California.
25.3. 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. The prevailing party shall be entitled to recover an amount equal to the fair market value of
legal services provided by attorneys employed by it as well as any attorneys' fees paid to third
parties.
25.4. 1bis document represents the entire and integrated agreement between the
parties and supersedes all prior negotiations, representations, and contracts, either written or oral.
This document may be amended only by a written instrument, which is signed by the parties.
25.5. The covenants, terms, conditions and provisions of this Agreement will apply
to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the
parties.
25.6. 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 rernain in full force and effect.
25.7. All exhibits referred to in this Agreement and any addenda, appendices,
attachments, and schedules to this Agreement which, 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 ofthis Agreement.
25.8 If, pursuant to this contract with CONSULTANT, CITY shares with
CONSULT ANT personal information as defined in California Civil Code section 1798.81.5( d) about
a California resident ("Personal Information"), CONSULTANT shall maintain rcasonable and
appropriate security procedures to protect that Personal Information, and shall inform CITY
immediately upon learning that there has been a breach in the security of the system or in the security
of the Personal Information. CONSULTANT shall not use Personal Information for direct marketing
purposes without CffY's express written consent.
25.9 All unchecked boxes do not apply to this agreement.
25.1 0 The individuals executing this Agreement represent and warrant that they have
the legal capacity and authority to do so on behalf of their respective legal entities.
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IN WITNESS WHEREOF, the parties bereto have by their duly authorized
representatives executed this Agreement 011 the date first above written.
ern 01<' PALO ALTO
City Manager (Required ~;;;;ili.;:~~ts over
$85,000)
Purchasing Manager (Required on contrllCts
over $25,000)
Contracts Administrator (Required on
contracts under $25,000)
APPROVED AS TO FORM:
Senior ABst. CilJ' AUorney
(Required on Contracts over $25,000)
Attachments:
EXHIBIT "A":
EXHIBIT "B":
EXHIBIT "C":
1!XH1BlT "C· I ";
EXHIBIT "D":
EXHIBIT "E"
SCOPE OF SERVICES
SCHEDULE OF PERFORMANCE
COMPENSATION
SCHEDULE OF RATES
INSURANCE REQUIREMENTS
TRANSITION PLAN
Profeasiunul Smlce!i
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I. BACKGROUND.
EXHIBIT A
SCOPE OF SERVICES
The CITY OF PALO ALTO (hereinafter "City") hereby requested proposals for SAP Support
Consultant Services. The CITY sought application support services for its SAP ECC 6.0 -
Enterprise Resourcc Planning Central Component System, ISUlCCS-Industry Solution Utilities
Customer Care and Service System, CRM Customer Relationship Management IC Web, UCES -
Utilities Customers eServices U CES Systems and Business Intelligence (BI) System. The most
recent ECC 6.0 was upgraded in July 2008, ISUlCCS was implemented in May 2009, and BI was
implemented in October 2009.
II. OVERVIEW
Sierra InfoSys (hereinafter "CONSULTANT') is to provide 2nd level of SAP Support and
Maintenance Consulting Services to supplement CITY in house resource when one or more of
the following scenarios occur:
• A quick solution is needed to fix system malfunction in areas such as payroll, utility bill
print, where system malfunction will disrupt normal business operation of multiple
departments or the entire organization.
• A quick solution is needed when customer facing systems such as UCES -Utility
Customer Electronic Services is down.
• Additional resource is needed to deliver system solution to meet legal compliance date,
such as Assombly Bill 920 -California Surplus Act of2009 or tax law changes.
• Industry best practice knowledge and experience is needed when City is evaluating,
designing, and implementing new business process and system fnnctions.
• At SAP PMO's discretion to perform special tasks such as new technOlogy evaluation,
feasibility study and/or reviewing system configuration setup.
Consultants are expected to have in-depth SAP knowledge and experience to perform tasks
inelude but not limited to system configuration custoinization, master data design and setup,
process design, custom table design, system analysis, and integration, focusing on the following
modules.
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Ill. SCOPE
SAP System SAP Modules Est Hours %
(per year)
IS-UtCCS DM-Device Management Support and Maintenance 200 12% I
BM-Billing Management Support and Maintenance 200 12%
FICA-Contract Account Finance Support and Maintenance 133 8%
UT·CRMllcWeb -Customer Relationship Management 200 12%
-Support and Maintenance
BI -Business Intelligence Support and Maintenance 133 8%
UCES -Utility Customer Electronic Services 133 8%
Core ERP ERP-Core SAP modules Support and Maintenance 333 20%
SAP Basis SAP BASIS consulting 333 20%
Total 1667
IV. WORK MODEL
Contract engagement with CONSULTANT primarily is based on Labor Hour for each Approved
Task Order. Hourly rate is fixed according to rate schedule. Total labor hours and cost is not to
exceed $250,000 annually.
Each task order with CONSULTANT, except urgent system fix, will be reviewed and approved
by SAP PMO, providing supporting material such as task scope; objectives, cost estimate,
resource planning, and schedule are available. CONSULTANT's Account Executive will
collaborate with CITY project manager and PMO to align objects, schedule, resource, and cost
closely.
V. DELIVERABLES
For each task order assigned, Consultant must follow CITY's system design and development
standards, to conduct the following tasks and produce deliverables:
Conduct problem investigation, root cause analysis, problem resolution, and knowledge transfer on
as-needed basis
Prepare functional specification, technieal specification, testing plan, and training material
Document configuration changes and process changes
Others: Solution comparaison, gap analysis, etc
VI. AREAS OF FOCUS
Areas of Business Operation where support and maintenance consulting is imperative to sustain
business continuity, to hnprove efficiency and fine tune process,
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• DM-Device Management Support and Maintenance
o Device and installation
o Meter reading optimization and fine tuning, including meter reading unit and scheduling,
implausible reading results setting and estimate read activation
• BM-Billing Management Support and Maintenance
o Creating Consolidated Rate structure for Retail Settlement, Distributor and Retailer
consolidated Billing for Deregulated transactions
o Configuration of Billing Schema, Rate Category, Rates and Operands for Industrial
o Preparing specification for Print workbench requirement for custom specific application
form, to display unbundled billing with Power, Water and Sewer contracts and Rate
information.
• FICA-Contract account Support and Maintenance
o Configuring New Dunning Procedures and Dunning Levels with Dunning Activities
o Creating functional specifications for Reset Clearing, Payments, Dunning, Security
Deposits, Automatic Clearing, and Clearing rules
• UT-CRM/IcWeb -Customer Relationship Management -Support and Maintenance
o Base Customization like Product master, Business Partners, Organizational Mgmt, Lead
MgmtXxx
o Configuring IC Web client like Business Roles, Profile setup, Interaction records, Partner
determination, broadcast messaging, Transaction launcher, Authorization Setup,
o Creating Users for Web UI and integration between ECC and CRM.
• BI -Business Intelligence Support and Maintenance
o Redesigning BI Landscape to improve loading and Query performance
o Creating custom reports and workbooks using BEx Analyzer
• UCES -Support and Maintenance
o Sustaining UCBS Utility Customer E-Service
• ERP-Core Support and Maintenance Consulting
o Plarming production support activities for ERP Core activities
o Identify change management opportunities and implement organizational solutions
involving functional department efficiency improvement and workload balancing
• SAP Basis Consulting
o SAP Solution Management evaluation and implementation
o SAP Enterprise portal architecture
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EXHIBIT "B"
SCHEDULE OF PERFORMANCE
CONSULTANT shall provide 2nd level of SAP Support and Maintenance Consulting_Services for configuration changes, master data setup,
process design, system analysis, and integration for the SAP modules listed in Exhibit A-Scope of Services. Detailed tasks will be assigned and
approved by SAP PMO on as-needed basis not to exceed allocated hours per module. Specific schedules for each Task as assigned will be
developed on a Task by Task basis. CONSULTANT shall perform the Services so as to complete each Task within the number of
hours/days/weeks as specified in Table A-I below and agreed to by CONSULTANT and City's Functional Lead and SAP Basis Lead.
PriOrity Definition Response Provide Target Resolution Time Escalation Path
Time Solution
After Time
Notification
rg y y y
i • Core business process cannot be carried out. Escalation path: tbd
Critical
• Security violation.
I • Multiple users or departments are directly affected. I 4 hours
• Incident has serious impact on critical tasks and
no workaround is available
• Customer affected.
as _
group of users are directly affected.
• Compliance time line is affected
day
I
1 day
3 days
3 days
nesource
estimation, City's
approval, prioritization and
scheduling
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Resolution> 2 day
Escalation path: tbd
l'l1:>ressiooal Services
Rev. June 2, 2010
[
, Low
I
L
• Small number of users are affected.
• Isolated incident.
• Degraded performance and/or is difficult to use,
• User requests general information, servioe or
consultation,
• Cosmetic enhancements
• Report enhancements
5 days
5 days
2
2·3 weeks Requires resouroe
estimation, City's
approval, prioritization and
scheduling I
4-6 weeks' I Requires resource 'II ... =' ~timatiOn, City's
approval, prioritization and
scheduling
._-L ___ . . . . .
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EXHIBIT "C"
COMPENSATION
The CITY agrees to compensate the CONSULTANT for professional services performed in
accordance with the terms and conditions ofthis Agreement on a Time and Materials basis,
based on the hourly rate schedule attached as Exhibit C-I.
The compensation to be paid to CONSULTANT under this Agreement for all services
described in Exhibit "A" ("Services") and reimbursable expenses shall not exceed
$750,000.00 ($250,000.00 per year). CONSULTANT agrees to complete all Services,
including reimbursable expenses, within this amount. In the event CITY authorizes any
Additional Services, the maximum compensation shall not exceed $750,000.00 ($250,000.00
per year). Any work performed or expenses incurred for which payment would result in a
total exceeding the maximum amount of compensation set forth herein shall be at no cost to
the CITY.
REIMBURSABLE EXPENSES
The administrative, overhead, secretarial time or secretarial overtime, word processing,
photocopying, in-house printing, insurance and other ordinary business expenses are included
within the scope of payment for services and are not reimbursable expenses. CITY shall
reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for
which CONSULTANT shall be reimbursed are:
A. Travel outside the San Francisco Bay area, including transportation and meals, will be
reimbursed at actual cost subject to the City of Palo Alto's policy for reimbursement of travel
and meal expenses for City of Palo Alto employees.
B. Long distance telephone service charges, cellular phone service charges, facsimile
transmission and postage charges arc reimbursable at actual cost.
All requests for payment of expenses shall be accompanied by appropriate backup information.
Any expense anticipated to be more than $250.00, shall be approvad in advance by the CITY's
project manager.
ADDITIONAL SERVICES
The CONSULTANT shall provide additional services only by advanced, written authorization
from the CITY. The CONSULTANT, at the CITY's project manager's request, shall submit a
detailed written proposal including a description of the scope of services, schedule, level of
effort, and CONSULTANT's proposed maximum compensation, including reimbursable
expenses, for such services based on the rates set forth in Exhibit C-l. The additional
services scope, schedule and maximum compensation shall be negotiated and agreed to in
writing by the CITY's Project Manager and CONSULTANT prior to commencement of the
services. Payment for additional services is subject to all requirements and restrictions in this
Agreement.
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[SCOPE !
i i
IIS:U/CCS I i1
~--'
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I 2 ,
3
,
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EXHIBIT "C-l"
HOURLY RATE SCHEDULE
I LABOR CATEGORIES (e.g. Sr. Consultant,
' Lead, Consultant, Clerical, etc.)
i
ONSITE CONSULTING
SAP ISU DM Support and Maintenance
Sr. Consultant -----------,-,
____ M.
SAP ISU BM-BILLING Support and
Maintenance
Sr. Consultant
SAP ISU FICA Support and Maintcmmee
' Sr. Consultant
' SAP CRM & ICWEB Support and
Maintenance
Sr. Consultant
SAP BI Support and Maintenance
Sr. Consultant
SAP UCES Support and Maintenance
Sr. Consultant
ERP-CORE Support and Maintenance
FUNCTIONAL'
SAP
ESSIMSS, FI, HR, SD, MM, PM, WM, PS,
CO,BCS,FA ___ M.
CONSULTANTS
ERP-CORE Support and Maintenance
TECHNICAL
ABAP, ALV, Workftow, Report, Painter,
JAVA, JSP, HTML, Web Service, XML,
, RFC,JCO
BSP Architecture and Development
CONSULTANTS
.... ..---
HOURLY EXTENDED
RATE
135
125
135
125
125
135
HOURLY RATE
(HOURLY RATE
160 ! ... -----_ ....
,
150 ,
""-~ ....
160 ,
125
125 ..... ~ ...
160
"'-"
,
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'---.. ··1 7 I ERP-CORE Support and Maintenance 100
SAP Basis Is 1 BASIS CONSULTING
! I Sr. Con~uItant 100_ :~ I i
~--~ ..
! I
Assumptions: Hourly Rates and implementation eosts cbange for any otber extra
consulting services.
100
100
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.-
._.
,---.....
EXHIBIT "D"
INSURANCE REQUIREMENTS
CONTRACTORS TO THE CITY OF PALO ALTO (crry), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OFTHECONTRACr OBT Am
AND MAJNT Am INSlJRANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFOIlDED BY COMPANIES WITH AM
BEST'S KEY llATING OF A-:VU, Oil HJGHEIl, LICENSED Oil AUTHORIZED TO TllANSACT INSUIlANCE BUSINESS IN THE
STATE OF CALIFORNIA.
AWARD IS CONTINGENT ON COMPLIANCE WITH CITY.'S INSURANCE REQUIREMENTS, AS SPECIFIED BELOW:
I-.1INlMUM J.IMITS
REQUIRED TYPE OF COVERAGE REQUIREMENT i EACH
YES
YE:S
YES
YES
YES
I.
WORKER'S COMPENSATION
EMPLOYER'S LIABHJTY
GENERAL IlABILlTY. INCLUDING
PERSONAL INJURY. BROAD FORM
PROPERTY DAMAGE BLANKET
CONTRACTUAL, AND FIRE LEGAL
LIABILITY
AUTOMOBIlE LIABILITY, INCLUDING
ALL OWNED, HIRED, NON-OWNED
PROFESSIONAL LIABILITY, INCLUDING,
ERRORS AND OMISSIONS,
MALPRACrICE (WHEN APPLICABLE),
AND NEGLIGENT PERFOR;'l!ANCE
STATUTORY
STATUTORY
BODlL Y INJURY
PROPERTY DAMAGE
BODILY INIURY &.PROPERTY DAMAGE
COMBINED.
BODILY INJURY
EACH PERSON
EACH OCCURRENCE
PROPERTY DAMAGE
BODlL Y INJURY AND PROPERTY
DAMAGE. COMBINED
ALL DAMAGES
OCCURRENCE
$1,000,000
$1,000,000
$1,000,000
$1000000 : , ,
$1,000,000
$1,000,000
$1,000.000
$1,000,000
AGGREGATE
.... _,;;0;;-$1,000,000
$1,000,000
$1,000,000
. .... ~ .... """ $1000 000 :
$1:000;000 :
$1,000,000
$1.000,000
$1,000,000
1 ____ -'$"-1"'00"-'0"-'0""00'-___ --1
THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDmONAL INSUIlED: CONTRACTOR, AT ITS SOlI! !:-'OST AND EXPENSE,
SHAH, OBTAIN AND MAlNTAm, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANYRF,SULTANT AGREEMENT,
THE INSURANCE COVERAGE HEREIN DP.s!:-'RIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSlJLTANTS, IF ANY, BUT
ALSO, WITH THE EXCEPTION OF WORKERS' COMPENSATION, EMPLOYER'S LIABILITY AND PROFESSIONAL INSlJRANCE. NAMING [
AS ADDITIONAL INSUIlEDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. '
INSURANCE COVERAGE MUST INCLUDE:
A. A PROVISION FOR A \\fRIHEN THIRTY DAY ADVANCE NOnCE TO CITY OF CHANGE IN
COVERAGE OR OF COVERAGE CANCELLATION; AND
E. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR
CON1RACTOR'S AGREEMENT TO INDEMNIFY CI1Y.
C DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY'S PRIOR APPROVAL.
II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE,
III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE APFORDED TO "ADDITIONAL
INSUREDS"
A, PRIMM Y COVERAGE
WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERAnONS OF THE NAMED INSURED, INSURANCE AS
AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITIl ANY OTHER
INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS,
E, CROSS LIABILITY
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TIlE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORFORA TlON AS INSUREDS UNDER THE POLICY SHALL
NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTIlER, BUT THIS
ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE TIlE TOTAL LIABILITY OF
TIlE COMPANY UNDER THIS POLICY,
C. NOTICE OF CANCELLATION
1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FORANY REASON OTHER
THAN THE NON·PAYMENT OF PREMlUM, THE ISSUING COMl'ANY SHALL PROVIDE CITY
AT LEAST A HURTY (30) DAY WRlTTEN NOTICE BEFORE THE EFFECTIVE DATE OF
CAl'lCELLA TlON.
2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR TIlE NON·PAYMENT
OFPREMlUM, TIlE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY
WRllTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.
NOTICES SHALL BE MAILED TO:
PURCHASING AND CONTRACT ADMINISTRATION
CITY OF PALO ALTO
P.O. BOX 10250
PALOALTO,CA 94303
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I
~~h X Cha1nanl
6001 Savoy Dr suite
Houston ~X 77016
i..-A~~ QWmO It(lt03
~ SCHE:OUlEO AUf OS
__ H1RID oWrou
501
C1T~ OF Pl\LOlWI'O
p.O. BOX 10250
p~ ALTO, CA 94303
®2010 -Sierra Infosys Inc
$ 1.000.000
SHaUll;) ANV Of THl! A80VE QE.SCRi8EO f>OVClfS BE CAACELlEQ BEfO. HE I TM!! EXPiAATION DATE TH£A~ NOTICE WIll e'" ACCORDmCI'1 wn~ THE POLIe'( PRoVIsIONS ... OELMREO 1M
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EXHIBITE
TRANSITION PLAN
. am enance Planning Setup Transfer . D I' ervlce e Ive
> TMOOW'" ~",m'.OO"~KOOW.dg, ~t~port
-....
, Establish scope • Setup connectivity
and time!ines for remote access
• Identify • Identify and deploy
stakeholders & connectivity and
~ process owners access
• Identify • Authorltation :r Organization • Sierra System
• Define service
levels
• Support process
;==
~ • Transition plan • SAP account
• Support Org • Authorization
;: • Support flow • Network Access
• Sierra system
= QQB'I QQB'I
SAP PMO members SAP PMO members 0 SAP Basis :r ;:: lli!lrqi
Engagement Manager Sierra
Support Service Manager Engagement Manager
Support consultant s
~
• Understand
Business process,
Configuration,
Master data
"' Customization
• Understand and
review change
management
process
• On site training
ticketing system
• Blue prlnl
• Scheduled jobs
• Operation manuals
• Customization
specification
• Interfaces
.~ CUPA
SAP PMO
SAP Core Team
AXON -as needed ~ d Engagement Manager
Suooort Con,ullar
• Reporting req
• Tas~ Order planning
, Prioritization
• Perfonnance
management
• Scheduling
• Cost conlrol
• Performance
• Slatus Report
QQB'I
SAPPMO
SAP Core Team
~ Engagement Manager
Support Service Manager
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