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Home My WebLink AboutStaff Report 2504-4543CITY OF PALO ALTO CITY COUNCIL Tuesday, June 17, 2025 Council Chambers & Hybrid 5:30 PM Agenda Item 12.Approval of Authorize the City Manager to Negotiate and Execute Professional Services Contracts for SAP Enterprise Resource System On-call Programming Services: Contract C26193272A with 360S2G, C26193272B with Sage Group Technologies Inc, C26193272C with Avertra Corp, C26193272D with Amick Brown LLC, C26193272E with 2iSolutions Inc, C26193272F with the Peloton Group, C26193272G with Phoenix Business Inc, C26193272H with EPI-USE America in an Amount Not-to-Exceed $2,000,000 for a Term of One Year in Fiscal Year 2026; CEQA status – Not a project. Title Updated, Supplemental Report added City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: IT Department Meeting Date: June 17, 2025 Report #:2504-4543 TITLE Approval of Professional Services Contracts for SAP Enterprise Resource System On-call Programming Services: Contract C26193272A with 360S2G, C26193272B with Sage Group Technologies Inc, C26193272C with Avertra Corp, C26193272D with Amick Brown LLC, C26193272E with 2iSolutions Inc, C26193272F with the Peloton Group, C26193272G with Phoenix Business Inc, C26193272H with EPI-USE America in an Amount Not-to-Exceed $2,000,000 in Fiscal Year 2026; CEQA status – Not a project. RECOMMENDATION Staff recommends that Council approve and authorize the City Manager or their designee to execute eight separate five-year contracts for time-limited, on-call, as-needed, SAP project support services for a collective total not-to-exceed amount of $2,000,000 in Fiscal Year 2026 with: 1. 360S2G, Contract Number C26193272A1; 2. Sage Group Technologies Inc, Contract Number C26193272B2; 3. Avertra Corp, Contract Number C26193272C3; 4. Amick Brown LLC, Contract Number C26193272D4; 5. 2iSolutions Inc, Contract Number C26193272E5; 6. The Peloton Group, Contract Number C26193272F6; 1 360S2G SAP On-Call Contract No. C26193272A; https://www.paloalto.gov/files/assets/public/v/1/it- department/cmr-attachments/sap-on-call/amick-brown-c26193272d.pdf 2 Sage Technologies Group SAP On-Call Contract No. C26193272B; https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/sage-technologies- group-c26193272b.pdf 3 Avertra SAP On-Call Contract No. C26193272C; https://www.paloalto.gov/files/assets/public/v/1/it- department/cmr-attachments/sap-on-call/avertra-c26193272c.pdf 4 Amick Brown SAP On-Call Contract No. C26193272D; https://www.paloalto.gov/files/assets/public/v/1/it- department/cmr-attachments/sap-on-call-project-support-services/2025-contracts/amick-brown-c26193272d.pdf 5 2iSolutions SAP On-Call Contract No. C26193272E; https://www.paloalto.gov/files/assets/public/v/1/it- department/cmr-attachments/sap-on-call/2isolutions-c26193272e.pdf 6 Peloton Group SAP On-Call Contract No. C26193272F; https://www.paloalto.gov/files/assets/public/v/1/it- department/cmr-attachments/sap-on-call/peloton-group-c26193272f.pdf 7. Phoenix Business Inc, Contract Number C26193272G7; and 8. EPI-USE America, Contract Number C26193272H8. Staff will return for City Council approval for services in Fiscal Year 2027 through Fiscal Year 2030 based on anticipated needs in the future. EXECUTIVE SUMMARY SAP is the City’s Enterprise Resource Planning (ERP) software platform for citywide financial and personnel management, and evolving business operations require a wide range of software programming projects. With the expiration of the City’s previous SAP on-call contracts awarded in 2019, staff issued a new Request for Proposals (RFP No. 193272) in early 2025 to identify multiple qualified vendors who can provide project-based, time-limited professional services on an as-needed basis. Following a competitive and structured evaluation process, eight firms are recommended for contract award based on qualifications, experience, past performance, and competitive pricing. These contracts will enable the City to meet evolving SAP requirements, upgrades and support needs over the next five years. BACKGROUND In 2019, the City’s Information Technology Department (ITD) issued RFP (CMR #113609) and awarded six contracts for SAP on-call services. These contracts allowed City departments to engage qualified firms to support time-limited SAP projects through task orders. Staff issued RFP No. 19327210 in January 2025 to replace the expiring contracts. The goal was to establish a new pool of qualified vendors for contracts from July 1, 2025, through June 30, 2030. As the City continues to upgrade and expand its SAP platform - including tools like Fiori apps, business intelligence dashboards, and utility-specific solutions - specialized support is needed for tasks such as system configuration, data integration, troubleshooting, and project delivery. The on-call structure allows the City to access skilled resources for any department on a limited time basis. ANALYSIS The solicitation was posted on OpenGov, the City’s eProcurement platform, for 32 days; 3,339 vendors were notified of the opportunity. The RFP closed on February 17, 2025. Work under each contract will be assigned through individual Task Orders. The City is not obligated to assign any specific amount of work or budget to any contractor. The proposed annual not-to-exceed 7 Phoenix Business SAP On-Call Contract No. C26193272G; https://www.paloalto.gov/files/assets/public/v/1/it- department/cmr-attachments/sap-on-call/phoenix-business-c26193272g.pdf 8 EPI-USE America SAP On-Call Contract No. C26193272H; https://www.paloalto.gov/files/assets/public/v/1/it- department/cmr-attachments/sap-on-call/epi-use-america-c26193272h.pdf 9 June 22, 2020 City Council Staff Report no. 11360: https://www.paloalto.gov/files/assets/public/v/1/agendas- minutes-reports/reports/city-manager-reports-cmrs/year-archive/2020/id-11360.pdf 10 January 16, 2025 SAP On-Call Professional Services RFP: https://procurement.opengov.com/portal/palo-alto- ca/projects/141183 amount increases these contracts by $350,000 over the Fiscal Year 2025 contract year. In FY2025 the department spent 95% of the not-to-exceed amount. It is estimated that 40% of the task orders will be funded by the Utilities Department in Fiscal Year 2026. Staff has received an increase in request for enhancements and process improvements which warrants the increase of the not-to-exceed amount. FY26 through FY27 Consulting Needs: •$1.12M for Ongoing Production Support (Payroll/HR, CRM, Utilities, Finance, Budget) — tied to staff vacancies and operational continuity •$1.05M for In-Progress & Planned Enhancements (e.g., Fiori upgrades, Year-End closing automation, SAP integration, HR and utility reporting) Tentative Pipeline Projects (FY26–FY27): •SAP S/4 HANA Migration (Administrative Services Department, HR, Utilities) •Fiber Billing Integration •SEW Portal Upgrade Project (Utilities) •Telecom OSS/BSS Project (Utilities) •Bill Redesign Project (Utilities) •OMS Upgrade Project (Utilities) •Upgrading and customizing the City’s SAP software to meet changing business needs •Improving user interfaces and staff experience •Supporting payroll, timekeeping, benefits, and HR processes •Enhancing financial and utility billing systems •Developing dashboards and reports •Troubleshooting technical issues and keeping critical systems highly available •Integrating SAP with other City systems •Providing expert advice and hands-on support for specialized projects across departments Table 1: Summary of Request for Proposal Proposal Description SAP On-Call Professional Services RFP 193272 Date Solicitation was Issued January 16, 2025 Date Solicitation was Closed February 17, 2025 Proposed Length of Project 5 years Number of Vendors Notified 3339 Number of Proposal Packages Downloaded 67 Total Days to Respond to Proposal 32 Pre-Proposal Meeting No Pre-Proposal Meeting Date N/A Number of Proposals Received 26 Proposal Price Range $45 – $250/hour (depending on consultant roles as outlined above) Public Link to Solicitation https://procurement.opengov.com/portal/pa lo-alto-ca/projects/141183 Proposals were evaluated by staff from the Information Technology and Utilities Departments based on criteria outlined in the RFP, including proposal quality, feasibility and effectiveness of the proposed solution, relevant experience and staff qualifications, financial stability, ability to meet deadlines, past performance with the City and other agencies, and capacity to provide ongoing support. This is an on-call contract for as-needed services, and each vendor submitted hourly rates that vary by level of service and expertise, reflecting their specialization in different areas of the scope of work. The selected vendors submitted well-structured proposals, demonstrated proven experience, and showed a strong ability to meet current and future City needs. Several have successfully worked with the City in the past and received positive feedback for their responsiveness and service delivery. In addition to technical qualifications, vendors were selected for their ability to meet operational and compliance requirements and to support the City’s long-term goals. On-call services will be assigned on a Task Order basis. A contractor will be selected based on their resource availability and relevant expertise. Staff will be responsible for evaluating the adequacy of each task order's proposed scope of work, contractor experience, and billing rates. To provide checks and balances, department directors or designee will be required to approve all task orders, reviewing contractor selection and budget adherence. The City Manager or designee will approve any task order over $100,000. Designated staff will manage the deliverables and budget of each task order, approving invoices to ensure that the billed hours match the hours actually worked as well as acceptance of work progress and products. Before entering into a task order, staff will review whether work demands and specialized skills not available internally require use of a consultant. Task orders will also require consultants provide documentation and effective knowledge transfer. FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW LINKS TO CONTRACTS SAP On-Call Project Support Services Contracts: •360S2G SAP On-Call Contract No. C26193272A11 •Sage Group Technologies SAP On-Call Contract No. C26193272B12 •Avertra SAP On-Call Contract No. C26193272C13 •Amick Brown SAP On-Call Contract No. C26193272D14 •2iSolutions SAP On-Call Contract No. C26193272E15 •Peloton Group SAP On-Call Contract No. C26193272F16 •Phoenix Business SAP On-Call Contract No. C26193272G17 •EPI-USE America SAP On-Call Contract No. C26193272H18 : Darren Numoto, Chief Information Officer 11 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/360s2g- c26193272a.pdf 12 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/sage- technologies-group-c26193272b.pdf 13 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/avertra- c26193272c.pdf 14 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/amick-brown- c26193272d.pdf 15 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/2isolutions- c26193272e.pdf 16 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/peloton-group- c26193272f.pdf 17 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/phoenix- business-c26193272g.pdf 18 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/epi-use-america- c26193272h.pdf Item No. 12. Page 1 of 1 7 6 2 0 City Council Supplemental Report From: Darren Numoto, Chief Information Officer Meeting Date: June 17, 2025 Item Number: 12 Report #:2506-4865 TITLE Authorize the City Manager to Negotiate and Execute Professional Services Contracts for SAP Enterprise Resource System On-call Programming Services: Contract C26193272A with 360S2G, C26193272B with Sage Group Technologies Inc, C26193272C with Avertra Corp, C26193272D with Amick Brown LLC, C26193272E with 2iSolutions Inc, C26193272F with the Peloton Group, C26193272G with Phoenix Business Inc, C26193272H with EPI-USE America, Each in an Amount Not-to-Exceed $2,000,000 for a Term of One Year; CEQA Status – Not a Project RECOMMENDATION Staff recommends that the City Council authorize the City Manager to negotiate, approve, and execute one-year contracts with each of the vendors above for on-call SAP services. Each vendor is not guaranteed any amount of work; the City must approve a task order for specific projects with binding terms on schedule and price. Each on-call contract will have a maximum not-to-exceed of $2,000,000, and the total spend on all 14 contracts combined shall not exceed $2,000,000. BACKGROUND The report originally distributed contained incorrect descriptions of multiyear terms and dollar values recommended. This supplemental report revises the title and recommendation to clarify the intent of the item. Upon City Council approval of the revised recommendation, staff will revise the contracts to reflect a one-year term with four optional years. Staff will return to Council for approval in Fiscal Year 2027 through Fiscal year 2030 to amend the contracts term based on the anticipated needs in the future. APPROVED BY: Darren Numoto, Chief Information Officer