HomeMy WebLinkAbout2/19/2003 - STAFF REPORTS (18) DATE: February 19, 2003
TO: City Council
FROM: Director of Procurement & Contracting
APPROVE UPGRADING DOS BASED PROCUREMENT SOFTWARE TO WINDOWS
RECOMMENDATION:
It is recommended that the City Council approve upgrading the existing DOS based
procurement software to the current Windows web enabled interactive version from
Periscope Holdings, Inc. of Austin, TX in the amount of$85,553.50.
SUMMARY:
This action would be to approve upgrading of existing procurement software from a
DOS based unsupported operating system to a Windows and web based system
capable of interactive networking with other city departments and adding features that
will allow online (internet)functionality to distribute and receive bid documents and to
manage contractor profiling as mandated by federal and state grant funding programs
as well as the State Uniform Cost Accounting Act. In addition to increasing productivity
through electronic distribution of documents currently distributed in hard copy,
implementation of this system will also significantly reduce paper usage helping the city
meet the goals of AB939. It would also reduce postage costs for documents now
mailed in hard copy. The cost of the upgrade is less than half the cost of the only
acceptable competing system. The DOS based system is the only DOS based system
remaining on the City's network which needs to share information with other
departments. Information services strongly recommends replacing or upgrading this
system to improve network performance.
BACKGROUND:
In 1989, the City installed APS (Advanced Procurement System)which has proven to
be the best automated procurement system in the country for public agencies.
Because no commercial provider was responding to the real needs of public
purchasers, the National Institute of Governmental Purchasing (NIGP)commissioned
development of an automated system based on services identified as important in a
comprehensive national survey. The resultant system differs from commercially
developed systems in that it was not merely an extension of an accounts payable
system or an inventory control system nor is it a system based on a manufacturing
production/material control platform.
In 1998 when the City purchased new financial and human resource software, a
purchasing module was included. Despite the fact that it was a fully integrated system
and Windows based, it turned out to be unusable because, like the private sector
software, it was merely an extension of accounts payable and inventory control
functions. A full refund was obtained from the vendor and Procurement continued to
use the DOS software.
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Since then,staff of the Procurement and Contracting Department has evaluated many
different methods for replacing the procurement software currently in use and have
concluded that upgrading the existing software will best serve the City's interests.
Other former APS users have already successfully utilized this upgrade solution. The
City of Tucson, AZ with a procurement organization similar to the City's, has been
utilizing the upgraded software for two years.
Other systems that provide the same features as the upgraded APS software are
either cost prohibitive (upwards of $230,000) or require cost-sharing with vendors.
While the cost-sharing method might at first seem an attractive alternative, staff has
concluded that the experience of other cities utilizing this method and our own tests of
these systems prove otherwise.
One particular reason for this conclusion deserves notice. In the course of testing
some of the available solutions, staff realized that most of the local and incumbent
vendors declined to participate. The predominant reason for this seems to be that the
number of potential transactions does not make participation cost effective. They
would rather not sell to the City than pay monthly fees to a third party (the web
host/software supplier)for a few bidding opportunities each year. When testing these
cost sharing solutions, the City found that the vendor base became suppliers in San
Diego and Orange counties, Arizona, Texas, Florida and Idaho. These locales have
multiple agencies utilizing these shared cost software solutions allowing these vendors
to spread the cost of utilizing the software over many more transactions. During the
periods in which the City was testing these solutions, staff knows of no instances
where local suppliers competed and won bids in these other locales. By upgrading the
software currently in use the City would provide free access to all suppliers,giving local
suppliers the greatest opportunity to compete for bidding opportunities.
The proposed system upgrade will greatly enhance the functionality of the
procurement software. Key benefits of the upgraded software include:
• online requisitioning for all using departments via a web interface;
• the ability to move companion documents electronically;
online status inquiries for submitted requisitions;
• direct vendor access to their stored vendor profile, allowing vendor
to control changes and to input new or changed data;
online bidding for informal bids
• online notification of bidders for formal and construction bids
The original software was developed for NIGP and supplied by Advanced Procurement
Systems (APS). Periscope Holdings, Inc, is the successor firm to APS. Periscope is
the only firm that can upgrade the existing software. The cost of the software,
installation and training for new users would total $190,000.
Procurement staff requested $90,000 in the FY 2002-03 budget for this upgrade.
Recognizing that the resultant electronic procurement system would reduce both
paperwork and trips by contractors to City Hall, it was agreed during the budgeting
process that a portion of the funding for the system would come from the Recycling
Fund. The split was to have been $65,000 from the Capital Projects Fund and
$25,000 from the Recycling Fund. The use of the recycling funds is appropriate
because adoption of the system will greatly decrease the use of paper through use of
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electronic transmittal of documents such as requisitions, purchase orders, bid notices,
vendor applications, requests for proposals, requests for quotations and bid packages
currently distributed in hard copy both internally and externally.
Staff is working with the city attorney's office to develop an agreement for this upgrade
project. Due to recent changes in the city attorney's office, that process is not yet
complete. The final contract in a form acceptable to the city attorney will be brought
back to City Council for final approval.
The deadline for upgrading this software at the reduced cost was December 31, 2002.
Periscope Holdings has extended the deadline to the end of February based on a
Letter of Intent. If City Council does not approve the purchase the City is not obligated
in any way. However, if a commitment is not made, the cost of the software will revert
to the price new users are paying instead of the reduced upgrade price which amounts
to approximately $100,000 difference.
Staff strongly recommends a commitment at this time. The final contract could come
back to City Council for approval.
A resolution is attached appropriating $25,000 from the Recycling Fund's fund
balance. Of the remaining $60,553.50, $18,000 is available from airport funds and
$42,553.50 is budgeted in the Capital Projects budget in account number 1395-54034,
Procurement Software.
l c G z' ' ✓"U` e
HAROLD E. GOOD, CPPO JIM RUNGE
Director of Procurement & Contrac 'ng Director of Information Technology
J HN AYM
ire r of C unity & Economic
evelopment
APPROVED:
City Manager
Attachment: 1 Minute Order
1 Resolution REVIEWED BY DEPT.OF FINANCE
A'
City of Palm Springs
411 o J t. 04 PALM Sp4 ....
+ DEPARTMENT OF PROCUREMENT AND CONTRACTING
•« a.,,,,.'' 3200 East Tahquitz Canyon Way
C, FOIL Palm Springs, CA 92262
Date: February 19, 2003 ' I�� ,i
To: David H. Ready, City Manager
From: Director, Department of Procurement and Contracting / d�✓
Subject: Justification for Use of Recycling Funds 5aJ
The Department of Procurement & Contracting is seeking to use $25,000 of recycling funding for the
purchase of new software. The AB939 related benefits of the new procurement software to support this
request are as follows:
City consumption of paper/materials:
The city currently uses approximately $25,000 per year to purchase bond (copy&printer)
paper. Assuming the procurement-related use is 5%, this equates to approximately 554
reams of paper, or roughly 3 pallets of paper a year and 5540 reams and 30 pallets over
the expected 10-year system life.
The city utilizes approximately $2,700 worth of requisition and purchase order forms per
year. These would be eliminated completely. While these forms cannot be quantified in
terms of reams, the requisition is a 2-part form while the purchase order is a 6-part form.
These forms are NCR paper; paper for which there is no method of recycling.
The city's use of print and toner cartridges will be reduced as many procurement
transactions will be performed electronically.
Vendor consumption of paper/materials:
Vendors will be able to access procurement documents electronically and may respond
electronically to informal bids (bids under$100,000) resulting in reduction of paper use by
vendors. The amount of paper diverted in this way is not possible to quantify but, based
Q�on historical patterns, could be substantial.
Harold E. Good, CPPO
Director of Procurement & Contracting
cc: Troy Butzlaff
Al Smoot
John Raymond
Elaine Wedekind
Tom Kanarr
MINUTE ORDER NO.
APPROVE UPGRADING THE EXISTING
DOSBASEDPROCUREMENTSOFTWARE
TO THE CURRENT WINDOWS WEB
ENABLED INTERACTIVE VERSION FROM
PERISCOPE HOLDINGS, INC, OF AUSTIN,
TX IN THE AMOUNT OF $85,553.50.
I HEREBY CERTIFY that this Minute Order approving upgrade of the
existing Dos based procurement software to the current Windows web
enabled interactive version from Periscope Holdings, Inc. of Austin, TX in
the amount of $85,553.50, was adopted by the City Council of the City of
Palm Springs, California in a meeting thereof held on the 19" of February
2003.
PATRICIA A. SANDERS
City Clerk
4::;k0 13
RESOLUTION NO.
OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS,
CALIFORNIA, AMENDING THE BUDGET FOR THE 2002-03
FISCAL YEAR.
WHEREAS Resolution 20357 approving the budget for the fiscal year 2002-03 was adopted
on June 5, 2002; and
WHEREAS the City Manager has recommended, and the City Council desires to approve,
certain amendments to said budget;
NOW THEREFORE BE IT RESOLVED that the Director of Finance is authorized to record
inter-fund cash transfers as required in accordance with this Resolution, and that Resolution
20357, adopting the budget for the 2002-03 fiscal year is hereby amended as follows:
SECTION 1. ADDITIONS
Fund Activity Account Amount
125 1280 54034 $25,000
Recycling
Purpose To provide balance of funding for the upgrade of procurement software.
SECTION 2. SOURCE
(Accumulated fund balance is $4.2 million)
Fund Activity Account
Amount
125
Recycling 29301 $25,000
Fund Balance
Adopted this day of 2002.
AYES:
NOES:
ABSENT:
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
By
City Clerk City Manager
REVIEWED AND APPROVED
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