SunnyvaleRTC

August 10, 2004

SUBJECT: Award of Contract for a Citywide Upgrade of Computer Operating Systems and Office Applications (#F0306-85)

Approval is requested for the award of a contract to Software Spectrum, Inc., of Liberty Lake, Washington, for the purchase of software licenses to upgrade approximately 650 desktop and laptop computers to the most current version of Microsoft's operating system and office suite. Computers will be upgraded as technical staff time permits over a three-year period. The estimated cost of the Citywide upgrade is approximately $300,000.

BACKGROUND

The City purchased and installed computers with the NT operating system and Office97 in 1999 as part of a Citywide project to upgrade systems from the Windows95 and Office95 versions. Currently, approximately 650 desktop and laptop computers throughout the City use the Microsoft Windows NT operating system that was first released in 1996 and Microsoft Office97.

Microsoft’s current versions are Windows XP and Office XP. Both products have functional and technical advantages over the older products. For example, the NT operating system does not support the current plug and play environment and does not support USB ports used to connect most of the newer computer peripherals, such as scanners, printers, digital cameras, and personal digital assistants (PDAs).

DISCUSSION

The City is already two generations behind in both the operating system and Office suite, and it is important that we move forward to the current versions for file sharing with outside parties. Also, when new computers are purchased to replace older equipment, they are configured with the current Microsoft Windows XP operating system and Office XP so it is essential that we upgrade existing computers to the same operating system and Office suite versions. In addition, new applications are being developed using the Office XP suite, and vendors are upgrading applications to work with Windows XP operating system and Office XP. It is also important to keep pace with the current software version and to have the same version installed on all computers to better enable the Information Technology Department to provide user support with limited staffing resources. This project will upgrade the operating system and Office suite software on existing Citywide personal computers that are being upgraded with additional memory and hard drives.

Information Technology staff has reviewed the corporate licensing programs offered by Microsoft and has determined that the Select License best meets the City's needs. Under this licensing program, the City will receive an initial product kit which includes the most current software versions at the time the project begins and will receive free upgrades as they become available as the project progresses. In addition, favorable volume pricing is available to the City through the use of a State of California contract with Software Spectrum, one of three Microsoft Authorized Large Account Resellers. Following is a comparison of Microsoft's suggested retail price and the City's initial Select License price for the most current version of the two products:

Product Suggested Retail Price Select License Price

Windows XP Pro $199.00 $121.30

Office Pro 2003 $499.00 $296.90

Section 2.08.070(b)(3) of the Sunnyvale Municipal Code exempts from competitive bidding situations where bid solicitation would for any reason be impractical, unavailing or impossible. In this case, Microsoft software is proprietary; and corporate pricing is set by Microsoft and available only through a limited number of resellers.

FISCAL IMPACT

Actual costs are impossible to predict because prices are not firm and fixed, and Microsoft price increases may occur while Citywide upgrades are in process. However, based upon the initial prices listed above, the cost to upgrade 650 desktop and laptop computers is $294,305. Funds are available in Information Technology Replacement Account 021600- Information Processing Hardware.

RECOMMENDATION

It is recommended that Council award a contract, in substantially the same form as the attached blanket purchase order, to Software Spectrum, Inc., for the purchase of software licenses to upgrade approximately 650 desktop and laptop computers to the most current version of Microsoft Windows and office suite.

Prepared by:

Elaine Wesely
Purchasing Officer

Reviewed by:

Mary J. Bradley
Director, Finance

Reviewed by:

Shawn Hernandez
Director, Information Technology

Approved by:

Amy Chan
City Manager

Attachment

Draft Blanket Purchase Order (pdf format)