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HomeMy WebLinkAboutAgenda Statement 1981/06/16 Item 15 ~ . COUNCIL AGENDA STATEMENT ITEM TITLE: Item 1 5 Meeting Date 6-16-81 Resolution I'l?~~ Approving Computer Facilities Management Contract with EDP Management, Inc. Director of POlicy Analysis and Program 1f Evaluation (j (4/5ths Vote: Yes No~) . .. " . SUBMITTED BY: '" 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 the stationing . of an on-site Data Processing Manager who directs five City employees, provides systems analysis and programming services for the City, and coordinates the marketing . and provision of data processing services to outside agencies. In addition, the resources of EDP Management may be called upon to assist with particularly complex problems or special projects. . The current contract with EDP Management became effective May 18, 1980, for a period of one year, unless both parties agreed to extend the contract. Since I wanted to · change some of the provisions of the existing contract and since EDP Management wanted to increase its charges for the contract, we have negotiated a new one-year agreement to become effective July 1, 1981. RECOMMENDATION: That Council: .. 1. Adopt the resolution approving the agreement. . BOARD/COMMISSION RECOMMENDATION: Not applicable. DISCUSSION .. One of the major changes in the proposed contractual arrangement with EDP Management . concerns programming services provided to outside agencies which contract with the City for computer operations. Historically, the City data processing services offered to outside agencies have been limited to data entry, computer operations, and use of existing City programs. Since the City has not offered programming services to these outside agencies, they have often contracted separately with EDP Management for any "- significant programming services that they needed. This arrangement has worked reasonably . well in the past, but as the amount of contractual service provided by the City to outside agencies has increased, the arrangement has become less satisfactory. The major problem encountered has involved continuity between programming services provided byEDP Management and computer operations service provided by the City. Since there is often considerable overlap between programming and operations services, this ~ arrangement has sometimes resulted in confusion over responsibilities among the .. parties. '; Under the City's proposed contractual arrangement with EDP Management, in conjunction with the additional programmer position provided in the 1981-82 Data Processing budget, the City (rather than EDP Management) would start providing any required programming services for outside agencies. This change should result in improved service to the w outside agencies, better City control over services provided to such agencies, and additional revenue to the City to offset the cost of the programming. " ~ Form A-113 (Rev. 11/79) ( tJ 1)0 2- .. .. Page 2, Item 15 ~ Meeting Date 6-16-81 Although the above change is not explicitly part of the proposed new agreement with ~ EDP Management, it is important background information for understanding some of the provisions of the new contract. The major changes from the existing to the proposed · new contract are discussed below. . 1. Section 4A, Payment for Basic Services - The annual payment to EDP Management for basic services will be increased $4,200 (11.7%) from the current $36,000 to $40,200 if the City does not exercise its option (described below) of having EDP Management provide a programmer in addition to the Data Processing Manager. Conversely, if the City does exercise the additional programmer option, the annual payment to EDP Management for the basic services will be increased $3,540 (9.8%) from the current $36,000 to $39,540. The additional payment required to obtain such a programmer is explained below. . .. .. .. 2. Section 3E, Additional Programmer Option - EDP will provide, if the City requests, one or more computer programmers in addition to the Data Processing Manager. The fee for such programmers would equal their total salary and benefit costs plus 10% of their salary. The City and EDP Management would jointly determine the salaries of such programmers. . .. This option provides an alternative to hiring an additional in-house computer programmer as approved in next year's budget. If and when there is sufficient programming work needed by outside agencies, I will be able to select whichever of these alternative methods of obtaining an additional programmer is preferable, depending on the situation. The in-house programmer alternative would probably be cheaper, but the alternative of obtaining a programmer from EDP Management would provide greater flexibility which would be especially important if there appeared to be only a short-term need for an additional programmer. .. ~ .. 3. Section 4C, Incentive Payment System - In addition to the above payments, a system providing potential incentive payments will be established, based on the gross revenues from outside agencies earned by the City's Data Processing Division. For the one-year period beginning July 1, 1981, the City will pay EDP Management 10% of all revenues earned in excess of $100,000, with such incentive payments limited to $6,000 for the year. The Division's revenue for FY 1980-81 is estimated to be about $81,000. Thus, the revenue must be increased about $20,000 before any incentive payments will be made, and the revenue would have to be doubled (to $160,000) for EDP Management to receive the maximum $6,000 incentive payment. I am currently projecting revenue of about $120,000 for FY 1981-82; this revenue would provide an incentive payment of $2,000, an additional 5.6% increase above the $36,000 payment to EDP Management in the current contract. ., .. -, " .. . (050-z.-- ol .;.- .. Page 3, Item 15 Meeting Date 6-16-81 . ... I consider this incentive system to be an innovative and beneficial aspect of the proposed contract. By providing part of EDP Management's compensation in the form of a small percentage of the revenue earned (above a threshold which is $20,000 higher than current revenue), I would anticipate a net increase in the Divisionis revenue above the amount that would otherwise be realized. Such an incentive system is particularly useful in situations like this were an aspect of good performance (increased customer business) results in a significant and ongoing increase in workload. Previously, the programming services EDP Management frequently provided under separate contract to new City computer operations customers constituted a similar incentive, but as discussed earlier, the City rather than EDP Management will provide these programming services and receive the resulting revenue in the future. .,. .. T .. FISCAL IMPACT " The total FY 1981-82 cost of the contract will be $39,540 - $46,200 (excluding the payments that would be required if the City exercises its option of having EDP Management provide an additional programmer), depending on the revenue received and on whether the additional programmer option is exercised. The most likely cost is projected to be $42,200, for which sufficient funds are included in the Data Processing budget (account 5298, Other Contractual Services). .. .. If the additional EDP Management programmer option is exercised, funds will have to be transferred from the Data Processing Employee Services budget, which includes funds for an additional in-house programmer. .. JT: 1m .. by tl02 City Crl!!il'ji of Chula Vista, Cc;iiTornia ~ Dated 6-1'-il .. .. .., .. .. . 1017 O-Z-