HomeMy WebLinkAbout2001-12-17 City Council (4)City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: ADMINISTRATIVE
SERVICES
DATE:
SUBJECT:
DECEMBER 17, 2001 CMR: 447:01
APPROVAL OF AMENDMENT NO. 1 IN THE AMOUNT OF
$87,500 TO EXISTING PROFESSIONAL SERVICES CONTRACT
NO. $2140169 WITH GOVERNMENT FINANCE OFFICERS
ASSOCIATION FOR SERVICES RELATED TO THE
IMPLEMENTATION OF THE ENTERPRISE RESOURCE
PLANNING SYSTEM
RECOMMENDATION
Staff recommends that Council:
1.Approve and authorize attached Amendment No. 1 in the amount of $87,500 to
existing contract, No. $2140169, with Government Finance Officers Association
(GFOA).
2.Authorize the City Manager or his designee to negotiate and execute one or more
change orders to Amendment No. 1 with GFOA for related additional but unforeseen
work. The total value of change orders shall not exceed $11,750.
BACKGROUND
The City will be replacing its existing f’mancial, human resources, and payroll
applications with a fully integrated Enterprise Resource Planning (ERP) system. ERP
solutions are products that share a common database and use a single vendor to provide
modules for a broad range of applications.
The City’s existing suite of business sotiware does not meet current needs; it is dependent
upon a collection of manual processes and customized interfaces. The patchwork of
different architectures and tools used makes the software difficult to support and
maintain. The City recognizes that this environment will hinder its efforts to reengineer,
improve business processes, and move toward an electronic government ("eGov") vision.
The City is seeking proposals for the installation and implementation of a new, fully
integrated financial, human resources, and constituent relationship management systems
solution.
CMR: 447:01 Page 1 of 3
DISCUSSION
The GFOA assisted the City with the fmalization of the initial RFP for ERP software.
The vendor is very knowledgeable about ERP systems and has an established rapport
with major vendors, as well as various implementation-consulting firms. The GFOA
knows the ERP market place with respect to reasonable expectations and costs and has
completed dozens of ERP acquisitions for other public sector entities. The City is using
GFOA’s knowledge and expertise to reduce risks and acquire the best products, services,
and terms.
The proposed Amendment No. 1 coversGFOA’s assistance in Phase II and III of the
ERP project. The GFOA will assist the City in evaluating software vendors and
implementation service providers, and developing an RFP for implementation services in
Phase II. The vendor will assist the City in the contract negotiation phase (III) by
providing experience and knowledge of the ERP vendors and implementers. This will
expedite the negotiation phase without compromising value.
RESOURCE IMPACT
The appropriated funding for GFOA consulting services for assistance with the
acquisition of Enterprise Resource Planning sotbccare and implementation services is
budgeted in the Capital Improvement Program Project No. 10216.
POLICY IMPLICATIONS
This recommendation does not represent any change to existing City policies.
ENVIRONMENTAL REVIEW
These services do not constitute a project under the California Environmental Quality Act
(CEQA).
ATTACHMENTS:
Attachment A: Amendment No.
with GFOA.
1 to Professional Services Contract ($2140169)
PREPARED BY:
LACEE LALONDE
Executive Assistant
CMR:447:01 Page 2 of 3
DEPARTMENT HEAD APPROVAL:
C;,~RL
Director,Services
CITY MANAGER APPROVAL:
EMILY HARRISON
Assistant City Manager
CMR:447:01 Page 3 of 3
ATTACHMENT A
AMENDMENT NO. ONE TO AGREEMENT NO. $2140169
BETWEEN THE CITY OF PALO ALTO AND
GOVERNMENT FINANCE OFFICERS ASSOCIATION (GFOA)
This Amendment No. One to Agreement No. S2140169
("Agreement") is~ entered into ~~ ]~. 2~t~.[, by and between the
CITY OF PALO ALTO ("CITY"), and Government Finance Officers
Association, an Illinois Corporation, located at 180 North Michigan
Avenue, Suite 800, Chicago, IL 60601 ("CONTRACTOR").
R E C I’T A L S:
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 System (ERP); and
WHEREAS, the parties wish to amend the Agreement;
NOW, THEREFORE, in consideration of the covenants, terms,
conditions, and provisions of this Amendment, the parties agree:
SECTION i. The section entitled "CONTRACTOR" is hereby
amended to add Phase II and Phase III, as specified in the exhibit
entitled ~Exhibit A - Scope of WorW’ and which is incorporated into
the Agreement by this reference.
SECTION 2.
to read as follows:
The section entitled "Term" is hereby amended
"TERM. The services and/or materials furnished under
this Agreement shall commence on December 18, 2001 and shall be
completed by June 30, 2002."
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 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 the
exhibit entitled ’Cost and Payment Schedule - Exhibit B,’ which is
attached/~ereto and incorporated herein by reference. For Phase
III, a total amount not to exceed $25,000, payable on a Time and
Expenses basis, as described in Exhibit B."
SECTION 4.The section entitled "Hold Harmless" is
hereby amended by adding the following:
"LIMITATION ON LIABILITY. CONTRACTOR’s liability for
performance under this Agreement will not exceed the level of
1
insurance for any exposure under this Agreement. Any liability not
addressed by the insurance coverage as described in Exhibit C,
attached hereto and incorporated herein by reference, will be
limited to the extent of fees paid."
SECTION 5. Except as herein modified, al! other
provisions of the Agreement, 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 OF PALO ALTO
City Clerk
APPROVED AS TO FORM:
Senior Asst. City Attorney
APPROVED:
Assistant City Manager
Mayor
GOVERNMENT FINANCE OFFICERS
ASSOCIATION (GFOA)
Director of Administrative
Services
Insurance Review
Taxpayer Identification No.
36-216-7796
Attachments:
EXHIBIT A:
EXHIBIT B:
EXHIBIT C:
(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)
SCOPE OF WORK
COST AND PAYMENT SCHEDULE
INSURANCE REQUIREMENTS
011210 shOO03 .~5 ~
CERTIFICATE OF ACKNOWLEDGMENT
(Civil Code § 1189)
STATE OF "1"1 "1 ~-ols
COUNTY OF Cook
)
)
)
On December II, 2001 .... , before me, the undersigned, a
notary public in and for said County, personally appeared
John Jurk~h ’
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 hand and official seal.
¯ Signature of Notary Public
4
CERTIFICATE OF ACKNOWLEDGMENT
(Civil Code § 1189)
STATE OF Illinois
COUNTY OF Cook
)
)
)
On neeemSer ]]: 200] , before me, the undersigned, a
notary public in and for said County, personally appeared
Je£frey L. ~sser ,
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 hand and official seal.
Signature of ~ic
OFFICIAL SEAL
BARBARA G MOLLO
Notary Public - State of Illinois
011210 snr-O03 .L~.f~5-_
Exhibit A
Scope of Work
The OFOA proposes to assist the City through two phases: (]l’) System Selection; and
Contract Negotiations. The procurement strategy outlined below assumes that the City will issue
separate software and services RFPs.
Dehverables are used to establish milestones for payment purposes, although a significant
portion of our activities are advisory related, put differently, a significant amount of work
effortmbeyond the dehverables listed belowwgoes into the procurement process.
Definition of Phase. Phase II begins as Soib,vare RFP responses are returned and ends when two
vendors are identified for parallel negotiations.
Deliverables. Six agreed upon procedures are outlined below with the associated "dellverables"
which together describe the services provided to the City by the GFOA during the software
system selection portion of our engagement.
Proposal Evaluation Plan. The GFOA will work with the steering committee to
develop a step-by-step evaluation plan document to be followed by members of your
evaluation team to select a software and services vendor.-This plan will be completed
prior to the opening of vendor proposals. Deliverable: Proposal Evaluation Plan.
Vendor Demonstration Scripts/Demonstration Evaluation Tool. The GFOA will
develop demonstration scripts to guide vendor presentations, based on interviews with
government staff, RFP requirements, and GFOA’s knowledge of best business
practices. In addition, a "tool" to be used by members of your evaluation team during
vendor software demonstrations will be prepared. Deliverables: Software
Demonstration Scripts and Software Demonstration Evaluation Tool.
Proposal Assessment Report. The GFOA will review and assess the major strengths
and weaknesses of each of the responses to the RFP to help identify the vendors to be
short-listed for soi~cware demonstrations. This report will consist of a 3-4 page
summary of key issues for each proposal. This assessment will be primarily focused
on a fit-gap analysis of requirement responses and identification on the quality of the
cost estimates proposed. The report will also present an analysis of software product
costs. D.eliverable.: Software Proposal Assessment Report.
4.Staff’mg Vendor Demonstration Presentations. GFOA’s recommended approach
(assumed in the fixed price) is to short-list no more than three vendors for on-site
GFOA Contract with the City ofPalo AJto, California 5
demonstrations. One GFOA team member will attend up to three software vendor
demonstrations of two days each. Since we have been involved in demonstrations
with all of the major software vendors, we will spot strengths and weaknesses and
raise these issues for discussion~ The GFOA team member attending the presentations
will ask questions of vendors and take detailed notes on the functionality of software
and assess adherence to your requirements. The GFOA team will facilitate sessions
with the evaluation team and steering committee to reach general conclusions on the
demonstration presentations. Deliverable: Summary Report on Software
Demonstrations.
Proposal Reference Checks. The GFOA will conduct in-depth interviews guided by
a standard questionnaire for each of the vendors invited to perform product
demonstrations (this fixed-bid proposal assumes no more than three vendors). GFOA
will utilize the results of the reference checks to develop some of the negotiating
points in the contracting strategy in Phase Ill. Deliverable: Software References
Report.
Discovery Session. After software demonstrations, GFOA suggests that governments
conduct a one-day workshop with each of the two vendors identified for parallel
contract negotiations. These. sessions take place after product demonstrations and ¯
before formal negotiations begin. These sessions provide vendors with an opportunity
to gather the information necessary to further clarify their proposals and provide the
City with an opportunity, if needed, to take a "second look" at the software. Shortly
after these sessions, vendors are requested to produce an updated cost proposal. One
GFOA staff member will participate in a maximum of two one-day discovery
sessions. Deliverable: Request for Clarification Memorandum to Vendors.
Definition of Phase. Phase II begins as Integration Services RFP responses are returned and
ends when two vendors ate identified for parallel negotiations.
Deliverables. Seven agreed upon procedures are outlined below with the associated
"deliverables" which together describe the services provided to the City by the GFOA during the
system selection portion of our engagement.
Proposal’Assessment Report. The GFOA will review and assess the major strengths
and weaknesses of each of the responses to the RFP to help identify the vendors to be
short-listed for vendor interviews. This report will consist of a 3-4 page summary of
key issues for each proposal. This assessment will be primarily focused on analysis
and commentary on implementation and training approaches, and identification on the
quality of the cost and staffing estimates proposed. Deliverable: Integration Services
Proposal Assessment Report.
GFOA Contract with the City of Palo Alto, California
o
Facilitating Vendor Presentations. GFOA’s recommended approach (asstuned in
the fixed price) is to short-list no more than three integration vendors for on-site
interviews. The interviews are assumed to last 4 hours per vendor. The GFOA team
will provide an interview guide to facilitate the interview sessions and provide the
evaluation team and steering committee with the information they will need to reach
general conclusions on the vendor interviews. Deliverable: Interview Guide.
Proposal Reference Checks. The GFOA will conduct in-depth interviews guided by
a standard questionnaire for each of the integration vendors invited to interviews (this
fixed-bid proposal assumes no more than three vendors), Deliverable: Integration
Firm References Report.
Analysis of Costs/Staffing/Implementati0n Risk Factors. The GFOA will provide
the City with an analysis of proposal costs for implementation and training services
by analyzing information provided in the proposals for those vendors invited to
vendor interviews (this fixed-bid proposal assumes no more than three vendors). In
addition, GFOA will provide the City with an analysis of the implementation
methodologies/plans proposed by the vendors. We also develop an analysis that
provides "apples to apples" comparisons and outlines oppommities for cost reduction
and risk areas needed to be addressed during Statement of Work (SOW) development
and contract negotiations. Deliverable: Analysis of Cost/Staffing/Risk Factors.
Discovery Session Conference Call. After oral presentations, the City will identify
two vendor finalists. GFOA and the City will conduct conference call with each of the
two vendors to clarify terms and conditions. These sessions take place after vendor
interviews. Shortly after these sessions, vendors are requested to produce an updated
cost proposal. Deliverable: Request for Clarification Memorandum to Integration
Vendors.
Defmition of Phase. Phase HI begins after Discovery with the sot%rare or
implementation film and ends when a Statement of Work (SOW) and final contracts are
established with a single vendor/vendor team. Three major documents are involved: (1) ~
Statement of Work, (2) Software Licensing Agreement, and(3)Integration Services
Agreement. /
Pricing. This Phase is performed on a time and expenses basis and is estimated to be
$25,000. GFOA’s hourly rate for the negotiation phase is $175 per hour. Since we
conduct most of the negotiations by phone, travel expenses are not a major cost factor for
this phase, although the cost of a GFOA staff member participating in a one-day, on-site
negotiating session is assumed for this Phase.
GFOA Contract with the City of Palo Alto, California
Description of Tasks. The GFOA has developed a unique "parallel negotiations"
methodology that we propose to utilize for this engagement. This approach seeks to retain
the benefits of competition until the last moment of the procurement cycle. It also uses
our membership network to benchmark prices and terms.
Typically, we ask our clients to short-list two vendors for cost negotiations and get a
response on major legal/business terms. Once the evaluation team chooses one vendor
over another, we seek to reach a contract (sol~ccare and services) with the top vendor
team. The contracting process includes the development of a Statement of Work--the
detailed document that specifies a step-by-step approach for the implementation and
¯ outlines roles/responsibilities of all parties involved. Our clients have witnessed
significant benefits in using this methodology. Inour experience, this disciplined
approach can actually lead to a faster contract negotiation process with considerably
lower risk.
Deliverables. Phase HI will focus on establishing a software licensing agreement and a
separate integration services agreements and Statement of Work with the final vendors.
Although GFOA will help the City shape these documents, these are not referred to as
deliverables because they~are agreements between the government and the chosen
vendors. Phase HI will be completed when the Statement of Work, Software License
Agreement, and Integration Services Agreements are complete.
GFOA Contract with the City of Palo Alto, California
Exhibit B
Cost and Payment Schedule
A. Basis for Cost Proposal
GFOA takes great pride in completing our consulting projects on time and on budget. To date, we have not had a
cost overrun in any of the technology projects in which we have been engaged. The pricing arrangement we propose
gives clients certainty for the project budget and allows the GFOA to allocate the staffnecessary to satisfy the City.
Because of the fixed-price nature of Phase II of this engagement, some assumptions are required which are outlined
below.
Phase HPricing (proposed on a ’¢Fixed Fee basis") where payment is made on the basis of deliverables/activities
completed.
Phase 117Pricing (proposed on a "Time and Expenses basis") where payments are made monthly on the basis of
hours incurred at a rate of $175 per hour. Because of the nature of contract negotiations--that is, that the government
and vendors ultimately determine the time needed to satisfy themselves that they can commit to a contract---GFOA
proposes this phase on a time and expenses basis.
B. Summary of Cost by Phase
IIA .Software.Product Selection (Fixed)"I $47,500
HB Integration Firm Selection (Fixed)
I
$15,000
IT[Contract Negotiations (Time & Expenses)
Total Estimated Cost: Phases ll-I-ll $87,500525’000
C. Payment Schedule
3
4
5
6-X
Steps 1-4 COmplete
Steps 5-6 Complete
Steps 1-5 Complete
Time and Expenses, based on monthly invoices, not
to exceed amount listed without city approval.
$251000-
$22,500
$15,000
$25,000
D. Assumptions for Pricing
GFOA Conlract with the City of Palo Alto, California
To give our clients assurance and certainty related to the project budget, GFOA often agrees to a fixed price for parts
of our engagements..Because of travel costs especially, we need to make assumptions in the engagement. Many of
these assumptions are also important to GFOA’s overall methodologies for RFP/system requirements development,
system selection and contract negotiations. Below is a complete list of assumptions for this engagement.
PHASE H
[1]The KFP for sol, rare will be released first and the selection process for a software vendor will be concluded
prior to the release of the RFP for implementation services.
[2]No more than three vendors will be short-listed for product demonstrations and implementation interviews.
These demonstrations will last no more than two days each per software vendor. The demonstrations will be
held as concurrently as possible (to reduce travel costs). The debrief session-will occur soon after the last
demonsWation.
[3]Discovery sessions will be held on back-to-back days---one day for each of the two vendors identified for
further consideration after demonstrations.
[4]No more than three trips are budgeted for this phase. To the extent possible, Steering Committee meetings will
be scheduled while we are on site; otherwise GFOA staffwould be pleased to participate through conference
calls. Conference calls are used to short-list vendors for demonstrations and to short-list for negotiations after
demonstrations.
PHASE IT[
[1]The software and services contract(s) will be completed within the timeframes set forth in the project plan. If
GFOA hours and expenses exceed the available funding for this phase, the City can either enter a change order
or complete negotiations on its own.
E. Tentative Project Timeline
A major way governments can reduce the risk of implementation failure is by thoughtfully
approaching the development of the RFP as well as the system selection and the contracting
processes. Essentially, a successful implementation begins at the RFP stage. As such, GFOA is
proposing a timeline that we feel is the most thorough way to approach the City’s system
procurement.
Timeline
October 23, 2001
December 21, 2001
January 9, 2002
January 15-22, 2002
February 15, 2002
February 20, 2002
March 15, 2002
March 16-April 5, 2002
April 8-3une 15, 2002
June 30, 2002
Major Milestones (Tentative Dates)
Project Plan Established
RFP Responses Due from Vendors
Proposal Analysis and Short-List for Demos Determined
Software Demonstrations With 3 Vendors
Software Finalist Identified-Phase HA Complete
Release of Integration Services RFP
Implementation Proposals Due
Oral Presentations, Discovery, Selection of Integration Firm--Phase 1I_8
Complete
Contract Negotiations
License and Services Agreement Complete--Phase III Complete
GFOA Contract with the City of Palo Alto, California l0