HomeMy WebLinkAboutStaff Report 13994
City of Palo Alto (ID # 13994)
City Council Staff Report
Meeting Date: 6/20/2022 Report Type: Consent Calendar
City of Palo Alto Page 1
Title: Approval of a Contract with EPI-USE Labs, LLC to Host Online the City's
SAP ERP System and Provide Related Services in an Amount Not to Exceed
$2,214,140 (including of $2,014,140 for Basic Services and a Contingency of
$200,000 for Additional Services Approved by City via Task Order) over a
Three-and-a-Half-Year Term
From: City Manager
Lead Department: IT Department
Recommendation
Staff recommend that Council approve and authorize the City Manager or their designee
to execute the attached professional services contract with EPI-USE Labs, LLC to
provide: online hosting services for the City’s SAP enterprise resource planning (ERP)
system on the Amazon Web Services (AWS) cloud platform; related SAP Basis support
services; and Additional Services (as needed, implemented via City-approved Task
Order up to a contingency amount of $200,000 as detailed in the contract), for a total
contract not-to-exceed amount of $2,214,140 over a three-and-a-half year term.
Background
The City’s history with SAP began in 2002, when the City selected SAP as its preferred
vendor for an enterprise resource planning (ERP) system. The purpose was to integrate
various business processes within the City, which enabled staff to move in the direction
of digital government. The SAP ERP system was implemented in 2003 and supports
Accounting, Finance, Purchasing, Project Management, Plant Maintenance, Budgeting,
Payroll, Human Resource Management, and Service Order Management.
In 2019, the City completed a major upgrade and migrated SAP Infrastructure to Cloud.
The original contract for hosting and related services with Labyrinth Solutions, Inc.,
(LSI) was approved by Council and signed in 2019 (CMR 10033) for a three-year
duration covering the upgrade, migration, and cloud hosting and support services. In
2021, a six-month term extension was executed by the City Manager (no change to the
compensation), which expired on April 21, 2022. Amendment two to the LSI contract
was approved by Council to further extend the term through October 21, 2022 (no
change to the compensation) to ensure sufficient time for the transition to the new
vendor.
City of Palo Alto Page 2
Discussion
The SAP ERP system is a highly complex system with processes integrated between
various modules and requires a high degree of specialized expertise to provide effective
ongoing maintenance and support.
Staff published a request for proposals (RFP) to procure cloud hosting and support
services in May of 2021 (RFP 182051).
Summary of Competitive Solicitation Process:
Table # 1: Summary of Request
for Proposal
Proposal Description AWS Cloud and SAP Basis Support Service RFP182051
Proposed Length of Project 3 years term, 2 additional years by amendment
Number of Vendors Notified 476
Number of Proposal Packages
Downloaded
45
Total Days to Respond to
Proposal
44
Pre-Proposal Meeting No
Pre-Proposal Meeting Date None
Number of Proposals Received 16
Proposal Price Ranges:
- Range of one-time Cloud
account migration and
stabilization costs
- Annual Maintenance and
Hosting range costs
- Ad-hoc hourly rates range
$0 - $200,000
$200,000 - $800,000
$75 - $200 hourly
Public Link to Solicitation https://pbsystem.planetbids.com/portal/25569/bo/bo-
detail/82892
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The multi-divisional evaluation team short-listed four vendors and requested that they
provide demonstrations of their support offerings based on the following criteria:
1) Having ability to support SAP in AWS cloud and showcase expertise in each
domain (Infrastructure, Network, Security, and Basis Administration).
2) Detailing their specific team and staff expertise in each area, including
partnerships/consultants.
3) Providing best cost/pricing for support services and a detailed cost break down
for the services, by task.
4) Detailing cost/pricing to include additional AWS discount(s), and for any
subsequent years.
After the rigorous evaluation process and additional due diligence performed by Staff,
EPI-USE Labs, LLC was identified for award of the contract, considering their domain
knowledge, staff expertise, customer references, and pricing.
Transition
The City requested LSI be available for at least four weeks to transfer over the existing
AWS account and knowledge to the new provider in order to have a successful
transition. This was a key purpose of Amendment Two to the contract with LSI, which
was for time only, at no additional compensation as the parties work through the
transition after Council approval of the award of the contract to EPI-USE Labs, LLC as
recommended in this staff report.
Resource Impact
Funding for this contract is budgeted in the Technology Fund as part of the Fiscal Year
2022 Adopted Operating Budget. Funding for this contract in Fiscal Years 2023 and
2024 is subject to annual appropriation of funds.
Budget Summary for Contract with EPI-USE Labs, LLC:
One-Time: $205,140
Year 1 Annual Cost: $603,000
Year 2 Annual Cost: $603,000
Year 3 Annual Cost: $603,000
Additional Services: $200,000
Subtotal: $2,014,140
Total Contract Not-To-Exceed: $2,214,140
Stakeholder Engagement
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RFP 182051 was issued in May 2021 for AWS support and hosting services. Through
this competitive solicitation and evaluation process, EPI-USE Labs, LLC was chosen.
Environmental Review
This is not a project under the California Environmental Quality Act (CEQA).