HomeMy WebLinkAboutAgenda Statement 1988/06/14 Item 4ITEM TITLE:
SUBMITTED BY:
REVIEWED BY:
COUNCIL AGENDA STATEMENT
Item 4
Meeting Date 6/14/88
Resol uti on,~lpQ~p -
Management Contract with P
Deputy City Manager ~~
City Manager
Approving Computer Facilities
Management, Inc.
(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 7.5 City employees in the Data Processing Division,
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, 1988.
ince the firm's performance under the contract has been very satisfactory, a
~ew one-year agreement has been negotiated with EDP Management to become
effective July 1, 1988.
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 $5,160 to $5,568, a 7.9% increase, primarily for adjustments to the
salary and benefit costs for the Data Processing Manager.
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, 1988, the City would pay EDP Management lOq 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
as in the contracts for the prior seven years. The FY 1988-89 Data Processing
revenue is projected to be $105,900, which would result in an incentive
payment of $590 for FY 1988-89.
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Meeting Date 6 4
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, although the
City of Santee has given notice of its intent to start its own computer
operations during FY 1988-89. 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 1988-89, 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
nder the contract makes the formal bid process impractical. To operate
ficiently and effectively, the Data Processing Manager needs comprehensive
rior 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 1988-89 cost
be $66,811, funding for which is
Budget, as revised on June 8, 1988.
impact (maximum of $8,000) on the
revenue earned during FY 1988-89
incentive payment to be made in July
WPC 0888I
of the contract for basic services would
included in the City Manager's Proposed
Approval of this contract would have an
FY 1989-90 budget if the Data Processing
exceeds $100,000 and thus results in an
of 1989.
the City Council of
Chula Vista, Cu.~;~rnia
Dated _~