HomeMy WebLinkAboutAgenda Statement 1987/06/23 Item 16 COUNCIL AGENDA STATEMENT
Item 16
Meeting Date 6/23/87
ITEM TITLE: Resolution / �;) , - Approving Computer Facilities
Management Contract with EDP Management, Inc.
SUBMITTED BY: Deputy City Manager ('
REVIEWED BY: City Manager 140 (4/5ths Vote: Yes No X )
The City has contracted with EDP Management, Inc. since 1975 for the
supervision and operation of the City's computer center. This arrangement has
involved EDP Management' s stationing of a full-time, on-site Data Processing
Manager who directs nine City employees in the Data Processing and Word
Processing Divisions, provides systems analysis and programming services for
the City, consults with internal City staff on issues related to automation,
and coordinates the City' s marketing and provision of data processing services
to outside agencies. In addition, other EDP Management personnel are
available on a limited basis to assist with specialized types of problems.
The current one-year contract with EDP Management expires June 30, 1987.
Since the firm' s performance under the contract has been satisfactory, a new
one-year agreement has been negotiated with EDP Management to become effective
July 1 , 1987.
RECOMMENDATION: That Council adopt the resolution approving the agreement.
BOARDS/COMMISSIONS RECOMMENDATION: Not Applicable.
DISCUSSION:
The only significant change in the proposed new contract compared to the
existing contract involves the payment amount (Section 4.A. of the contract).
The monthly payment to EDP Management for basic services would be increased
from $4,791 to $5,160, a 7.7% increase. To provide a point of comparison, the
$61 ,923 annual cost for the proposed contract during FY 1987-88 is 5.0% higher
than the current FY 1986-87 salary and benefit cost of a Traffic or Sr. Civil
Engineer, City positions that are similar in the sense of being Division Heads
in highly technical areas of responsibility.
The proposed new contract includes the provisions established in FY 1981 -82
for an incentive payment system (Section 4.C. ). This system provides for
potential incentive payments based on the gross revenues from outside agencies
earned by the City's Data Processing Division. For the one-year period
beginning July 1 , 1987, the City would pay EDP Management 10% of any such
revenues earned in excess of $100,000, with the incentive payments limited to
a maximum of $8,000 for the year. This threshold and percentage are the same
w as in the contracts for the prior six years. The FY 1987-88 Data Processing
revenue is projected to be $99,100, which would not result in an incentive
payment for FY 1987-88. This is due in part to the declining nature of this
business and need for greater attention to internal City needs.
Page 2, Item 16
Meeting Date 6/23/87
This incentive system was designed to be an innovative and beneficial aspect
of the contract. By potentially providing part of EDP Management's
compensation in the form of a small percentage of the revenue earned above a
threshold of $100,000, a net increase is anticipated in the Division' s revenue
above the amount that would otherwise be realized. Such an incentive system
is particularly useful in situations like this where an aspect of good
performance (increased customer business) results in a significant and ongoing
increase in workload. The Data Processing Division is currently providing
service to six outside agencies in addition to City departments. For EDP
Management to receive the maximum $8,000 in incentive payments, the Division' s
annual revenue would have to reach $180,000.
The proposed contract also includes provisions that allow the City the option
of obtaining additional full-time programmers (Section 3.E. ) or additional
temporary personnel (Section 3.F. ) at additional cost to the City. It is not
anticipated that the City will exercise these options during FY 1987-88, and
no funds are budgeted to exercise these options.
The waiving of bids is requested, in accordance with Section 2.56.170 of the
Municipal Code, because the nature of the professional services to be provided
under the contract makes the formal bid process impractical . To operate
efficiently and effectively, the Data Processing Manager needs comprehensive
prior knowledge of the computer systems and user needs of the City as well as
of the six outside agencies served by the Data Processing Division. If the
City were to contract with a new consultant, a significant amount of time
would be required simply to bring the consultant "up to speed"; during this
period, the productivity of the new Data Processing Manager would of necessity
be low and the City's data processing services would suffer as a result.
Furthermore, the Deputy City Manager has informally discussed with other
vendors the possibility of their providing similar services as those provided
in this contract, and the cost of such alternatives appears significantly
higher than under the proposed contract with EDP Management.
FISCAL IMPACT: The FY 1987-88 cost of the contract for basic services would
be $61 ,923, funding for which is included in the City Manager's Proposed
Budget. Approval of this contract would have an impact (maximum of $8,000) on
the FY 1988-89 budget if the Data Processing revenue earned during FY 1987-88
exceeds $100,000 and thus results in an incentive payment to be made in July
of 1988.
WPC 0888I
7/b the City Council of
Chula Vista, California
Dated _� :d 2
12 I