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HomeMy WebLinkAbout1984-01-24; City Council; 7624; SELECTION OF CONSULTANT TO ASSIST IN THE SELECTION AND IMPLEMENTATION OF ACCOUNTING SOFTWAREr f Q W > 2 [L 2 2 z! 6 4 d 0 z 3 8 CIT))F CARLSBAD - AGEND~ILL \ DEPT. HD CITY AT SELECTION OF CONSULTANT TO ASSIST IN THE SELECTION AND IMPLEMENTATION OF ACCOUNTING SOFTWARE CITY MGI 'AB#& TITLE 1-24-84 MTG. DEPT. RECOMMENDED ACTION: FIN Adopt Resolution No. 748'3 authorizing the Mayor to enter into an Agreement with Arthur Young and Company to assist the City in selecting and implementinc an accounting software system, and transferring funds. ITEM EXPLANATION : For about 18 months, the City Finance staff has been attempting to run an accounting system which is both incomplete and unacceptable in its ability to provide daily, weekly, monthly or even annual information that is timely and accurate. Therefore, the staff has requested proposals from five firms in an effort to find a consultant capable of assisting the City in evaluating the present system and selecting new software, if necessary. Proposals were requested from: cost Coopers & Lybrand $24,000 - $28,500 Arthur Young 15,600 - 22,680 Ralph Anderson No proposal DNM Management Resources Inc. 60,000 Computer Results Inc. Alternate Proposal Each proposal is discussed in the attached report. The City staff's recommendations are as follows: 1. Accept the proposal of Arthur Young for software selection and implementation services. Also the Council should approve the transfer o $23,000 from the Contingency Account to the Finance Department Budget to fund this contract. 2. If the Manager or Council has any reservations about the scope, timing o definition of the project, accept the proposal of Computer Results, Inc. and authorize CRI to undertake Step 1 as shown in the attached proposal. The Management Review described in this step will help the City define objectives, goals, project specifications, timing and cost. The Manager and Council may also adopt a prior proposal of SIWON which has verbally affirmed their desire to fix the existing system (both accounting and payroll) and to offer the City a substantially better system than was originally proposed in our contract with Responsive Design. 3. The first recommendation of using the services of Arthur Young is based on t staff's need to find a sure and swift solution to the existing problems. Tt deadline for complete implementation is June 30, 1984. Arthur Young has indicated that they feel that this schedule, although it is very ambitious, can be met. ? .f t 1 0 m PAGE 2 OF AB # 7483 The Computer Results, Inc., alternative is included to offer the Council and Manager a choice should there be a desire to better define the project before beginning. This will delay the project slightly. The third alternative is presented in all fairness to SIMCON, the company nov holding rights to the software packages installed here. SIMCON has not put their proposal in writing to date. The City has only a verbal commitment frt SIMCON officers that the City's systems will be brought up to specifications. FISCAL IMPACT : The cost associated with operating a faulty accounting system is major. The present system is requiring from 1 1/2 to 2 times the man hours typically necessary to run an accounting system. This means that approximately $60,00( worth of Finance Department staff resources will be applied to running the accounting system that typically could be made available for other projects, such as managment reporting, updating budgets, auditing internal procedures, verifying charges, etc. A faulty system also leads to duplication of effort in other departments where financial reports are not trusted as being correcl An unknown number of hours are spent in Development, Safety, Parks, Library and other departments verifying the reports produced by the system. The proposed alternative of Arthur Young would cost the City between $15,600 and $22,680 in consulting services presently not budgeted. The City will al: expend substantial staff time on the project valued at $600 to $10,000. Oncc the Consultant's study is complete, the installation of a new accounting package will cost approximately $30,000. The costs associated with the three alternatives breaks down as follows: 1. Arthur Young - Consulting Services $22,000 City Staff Costs: To Assist Consultant To Keep Existing System Running 10 ,OOO( 1) $%$% Tot a1 2. Computer Results Inc. - Phase I Study $ 2,500 Phase I1 & I11 (Staff Estimate) 25,000 Subtot a1 27,500 City Staff Costs: To Assist Consultant To Keep Existing System Running 10 ,OOO( 1) M Tot a1 (I) Finance Staff - 250 hrs. per month for six months at $20.00 per hour = $30,000 r 7 r m * PAGE 3 OF AB # y/cay 3. SIMCON - Present Verbal Proposal $ -0- City Staff Costs: Keeping Existing System Running into 1984- 85 y& ,2;;(2) Tot a1 9 The proposed transfer would reduce the Contingency Fund balance by $22,680 from $302,003 to $279,323. EXHIBITS: Resolution No. 7 Li83 authorizing the Mayor to enter into an Agreement wit Arthur Young and Company to assist the City in selecting and implementing an accounting software system, and tranfering of funds. Memo to City Manager - 3anuary 17, 1984 - Selection of Consultant Memo to City Manager - 3anuary 5, 1984 - Computer System History (2) Finance Staff - 250 hrs. per month for nine months at $20.00 per hour = $45,000 Programmer - 80 hrs. per month for nine months at $30.00 per hour = $21,600 T f x e - 3anuary 17, 1984 TO : CITY MANAGER FROM: Finance Director SELECTION OF CONSULTANT TO ASSIST IN REVIEW AND IMPLEMENTATION OF ACCOUNTING SYSTEM SOFTWARE RECOMMENDATION After reviewing the proposals from four firms capable of assisting the City staff in the review and implementation of an accounting system, the staff has the following recommendations: 1. Accept the proposal of Arthur Young for software selection and implementation services. Also, the Council should approve the transfer of $23,000 from the Contingency Account to the Finance Department budget to fund this contract. 2. If the Manager or Council has any reservations about the scope, timing or definition of the project, accept the proposal of Computer Results, lnc. , and authorize CRI to undertake Step 1 as shown in the attached proposal. The Management Review described in this step will help the City define objectives , goals, project specifications, timing and cost. 3. The Manager and Council may also adopt a prior proposal of SIWON which has verbally affirmed their desire to fix the existing system (both accounting and payroll) and to offer the City a substantially better system than was originally proposed in our contract with Responsive Design. DISCUSSION Late in December, the Finance Director distributed an RFP to five companies requesting consulting services which would assist the City in obtaining an accounting system which would run on our HP-3000 computer. task would be to: A. The Consultant's Evaluate the existing computer software used for accounting and the HP-3000 hardware. The Consultant would then recommend that the City 1) keep the existing software and fix problems through modifications or 2) replace the software with a new package. hardware changes which might be necessary to accomodate the accounting system. The Consultant would also recommend any T f r 0 e 6. If the recommendation was to keep the existing software, the Consultant would help the City select a company who could accomplish the necessary changes and would monitor the progress of the software company. The Consultant would work with the City staff through the end of the implement at ion process. C. If the decision was to replace the system, the Consultant will use specifications designed by the City and reviewed by the Consultant to evaluate up to three software systems already running on HP-3000 computers. The Consultant will then rank the tested systems and the City will select the one which will be implemented. D. The Consultant will work with the City staff to monitor the progress and correct any problems encountered with the selected vendor during the implment at ion phase. At the same time, the Finance Director has been using the resources of the local Hewlette Parckard representative, SANDAG, through the local technical assistance program, and Public Technoloty NC to conduct a software search of all HP-3000 users to find local government accounting packages that have a proved track record. These efforts began as a result of three factors. increasing frustrations with working with the present partailly completed accounting system. 2) information and his direction to take action to fix the problems present in the accounting system, and 3) the City's CPA's letter on computer problems that strongly recommend replacing the accounting system. been covered in other correspondence. EVALUATION OF PROPOSALS The City's RFP was sent to five companies who have the resources to perform the requested services: 1) The Finance Department's The City Manager's need for timely and accurate Most of these points have Coopers and Lybrand Arthur Young Ralph Anderson DNM Management Resources, Inc. Computer Results, Inc. Of these five firms, only Ralph Anderson did not respond. The evaluation of the remaining proposals was primarily based on customer satisfaction with results, tidiness of results, understanding of the problem and price. r f I , m w The Coopers and Lybrand proposal quoted a price of $24,000 to $28,500 for the requested services. they appear to have a good understanding of the City's needs and have proposed a timing which would accomplish the study by the required dates, assuming no schedule slippage. The company, like most, has clients that are pleased and those who could be happier with the services received. The problems cited by customers included program schedule that extended beyond deadlines, changing staff assignments, and a difference in expectat ions between the company and client as to the serivces to be provided. Coopers and Lybrand has successful installations and has a relatively good track record in the area of consulting services overall. Arthur Young proposed a study costing between $15,600 and $22,680 not counting charges for out of town travel. Arthur Young has a very good understanding of the task at hand based on the summary included with their proposal and conversations with A.Y. staff. The timing proposed by Arthur Young meets the requirements of the RFP allowing for no slippage. noted that the company's staff was very well qualified and worked well with the client. There were clients who noted that there were occasions where projects were not completed on schedule and that the field manager was often busy on other projects. Clients were generally satisfied with the results provided by Arthur Young. DNM Management Resources proposed services priced at $62,000. understanding of the requested services, although the proposal did not include a summary of the concept of the project. Computer Results, Inc. proposed an alternate approach to solving the City's problem. First, CRI indicated that, in their opinion, the City was ill prepared to embark on the selection of an accounting system. The City has not prepared 2 sufficient description of the system goals, objectives, project definition and documentation. CRI proposes to do a three phase project for the City which will first solidify the description of the described system to allow the City to properly evaluate alternatives. objectives stated in the RFP. of the study. until Phase I is complete. received. Much of CRI's attention is focused on training those who select and use computer systems. Phase I of the CRI approach is not incompatible with the goals of the RFP, however it could delay the result and push the implementation date in 1984-85. SUMMARY The staff's recommendation to utilize Arthur Young and begin on the project on February 1, 1984 is based on the need to accomplish the assigned task by June 30, 1984. The June 30 deadline is necessary to allow the City to audit through the new rather than tht old system for 1983-84. The City Manager has also set this as a dealdine for improving the management information available to him. After conversations with the Coopers and Lybrand staff, The Arthur Young clients DNM may have an No references were provided. Phases I1 and I11 would accomplish the CSI quoted a price of $2,500 for the first Phase No price or time frame can be set by CRI for Phase I1 and I11 (31's clients are genearlly pleased with services This is a very short time frame for the task before us. I r L m w The staff can accept a later deadline if the City's contract programmer can be assigned to the accounting system as a number one priority - and several serious problems can be at least temporarily fixed. During the past eight months, the staff has concentrated on other projects and has avoided making major changes to the accounting system. The investment of substanital resources on the accounting system was weighed against implement at ion of other systems such as water billing and payroll. If the decision is to accept the CRI proposal, emphasis must be placed on a very short delay. CRI believes their Phase I study can be completed in about three days time. If this is true, a very short delay is possible. The SIMCON alternative is presented in an effort to give the Manager and Council all the reasonable options facing the City. SIKON is a large east coast based firm which has established a fairly good name in Public Safety Systems. SIMCON acquired to proprietary rights to the accounting, payroll and business systems we use from a company called Responsive Design. Representatives of SIMCON have met with City staff and indicated their willingness to fix the problems encountered in the existing system. If the Council wishes to wait for SIMCON to perform, the schedule for implementation of an accounting system is pushed into early 1945-85. The positive side of their proposal is that the City's out-of- pocket costs for new software and consulting services will be considerably lower. In the event that the City selects a system other than SIMCON, the City will continue the investigation of possible litigation against SIMCON for costs associated with the present system. r t f a 3ANUARY 5, 1984 TO : CITY MANAGER FROM: Finance Director COMPUTER SYSTEM HISTORY SUMMARY The present account and payroll systems used by the City were supplied by Responsive Design, Inc., a computer software house located in Orange County. These systems are in serious trouble due to the failure of the Contractor to complete the agreed upon systems. In a memo dated December 12, 1983, the Finance Director recommended a course of action to solve these problems; first fixing the accounting system, then the payroll system. is attached..) The following summary of the computer system history will help put the present situation in perspective. It is important that the Manager and Council understand the current problems and the recommended solutions. HISTORY In 1975, the City purchased a Singer system 10 computer system designed to run the accounting, payroll and utility billing functions. This system had a design life of five years and was scheduled for replacement in 1980. In November of 1979, the City selected Price Water house as its consultant to help in the selection of a new computer system. The selection process consisted of preparation of specifications for hardware and software and distribution of a Request for Proposal to over twenty computer vendors. The analysis of these proposals was conducted and a recommendation was made to the Council in December of 1980. Public Agencies Data System The City selected the Public Agencies Data System (PADS) proposal as the one best suited to meet the City's needs. The system was comprised of existing accounting, payroll, utility software and was running on excellent hardware, the Hewlette Packard 3000 computer system. A contract was signed with PADS in 3anuary of 1981 and required delivery of all products by 3une, 1981. By October, 1981, PADS had failed to deliver any product other than hardware. The City terminated its agreement with PADS due to this delay which, in the City's opinion, was a material breach of contract. In the final settlement, the City agreed to pay for the hardware and was forced to seek software from another source. (A copy of this memo I I I 0 m Responsive Design The City went to bid for software systems capable of running on the HP 3000 during October and November, 1981. The resulting bids showed that there was a lack of proven software available at a price the City could reasonably afford . In January, 1982, the City awarded the software contract to Responsive Design, Inc., a one man software house located in Orange County. was to come from Tulare County School District and would be modified for our use. The contract called for performance by the end of March, 1982. All systems (accounting, accounts payable, utility billing, inventory) were to be up and running. By March, 1982, the contractor requested an extension of time to April, 1982, which was granted. This new deadline was not met and a series of extensions and failures to meet deadlines followed until October, 1982. In October, 1982, the Finance Director terminated the agreement with Responsive Design due to tlhe inability to complete the project as promised. The Contractor appealed the decision to the City Manager noting extenuating circumstances and promising clompletion by December, 1982. By the end of December, 1982, the systems remained unfinished. The Contractor claimed that hardware problems within the control of the City caused the delay of completion. The City corrected the problems and granted a further extension to January, 1983. By the end of January, 1983, the systems still remained unfinished. An attempt to contact Responsive Design revealed that the Contractor had suffered severe health problems and would be unavailable until March, 1983. In March, 1983, the Finance Director contacted the Contractor and stated the City's final position project completion. the end of April, 1983, or the contract would be terminated. On May 19, 1983, the Finance Directed terminated the contract with Responsive Des ign . Simcon Simcon, a nation wide software house, acquired the software rights to all Responsive Design software. This acquisition began taking shape in June, 1983 and did not culminate until October, 1983. The Simcon representatives talked to the City occassionally during the acquisition and met with the Finance Director on January 3, 1984. Simcon has indicated an interest in solving the existing software problems but cannot guarantee any results until May or June, 1984. The proposal system All systems should be completed by * t , 1 a The staff is reviewing the City's options at this point including a) allowing Simcon to attempt to correct the existing problems and b) taking legal action to recover the cost of the accounting and payroll systems from Sinlcon. Data Stream In 3uly the City contracted with Data Stream to install a utility billing system to take the place of the one which was not delivered by Res,ponsive Design. This system was installed within a few days of the agreedl upon completion date and has been in use for about two months. CURRENT POSITION The Finance Department is presently using the partially completed accounting and payroll systems provided by Responsive Design. inadequate and will eventually create major problems for the City if not replaced in the very near future. table for implementation of a new accounting system. The payroll system should be replaced shortly after the accounting system. These are seriously The attached memo includes a proposed time 3AMES ELLIOTT 3E/ds Attachments I c 1 c 1 2 3 4 5 ' 7 8 9 lo I' 12 l3 14 l5 16 17 l8 19 20 21 22 23 24 25 26 27 28 m e RESOLUTION NO. 7483 A RESOLUTION OF THE CITY COUNCIL OF THE CITY 10F CARLSBAD AUTHORIZING THE MAYOR TO ENTER INTO AN AGREEMENT FOR CONSULT SERVICES WITH ARTHUR YOUNG AND COMPANY TO ASSIST THE CITY IN SELECTING AND IMPLEMENTING AN ACCOUNTING SOFTWARE SYSTEM, AND TRANSFERING FUNDS. WHEREAS, the City has determined that a need exists replace or substantially improve the accounting software syst presently running on the City's Hewlett Packard -3000 compute system; and WHEREAS, the City wishes to use consulting services assist in the evaluation of the present system, review of replacement systems and implementation of any selected accoun software; and WHEREAS, the City has requested proposals from quali consulting firms capable of providing the above services; and WHEREAS, after review of said proposals, the City fi that the proposal of Arthur Young and Company most closely me the City's needs; and WHEREAS, the City Council has elected to fund the co associated with this study from the Contingency alccount. NOW, THEREFORE, BE IT RESOLVED by the City Council c the City of Carlsbad as follows: 1. That the proposal of Arthur Young and Company attached hereto is hereby accepted and the Mayor is authorize execute the attached agreement with Arthur Young and Company consulting services. 2. That the amount of $22,680 is hereby transferrec from the Contingency account to the Finance Department budget fund these services. Ill I I * 1 2 3 4 5 6 7 8 9 10 11 12 13 l4 15 16 17 18 19 20 21 22 23 24 25 26 27 28 T m w PASSED, APPROVED AND ADOPTED at a regular meeting of City Council of the City of Carlsbad held the24th -- day of -7 1984, by the following vote, to wit: AYES: NOES: None ABSENT: Wne Council mrs Casler, Lewis, Kulchin, Chick and Prescott 9- d &&/ MARY H. CPLER, Mayor ATTEST: aAhL 2. 0- ALETHA L. RAUTENKRANZ, City C$rk (SEAL) 1 W , m . AG RE EM EN T THIS AGREEMENT is made this day of --, 1984, between the CITY OF CARLSBAD, a municipal corporation of the State of California, hereinafter referred to as CITY, and ARTHUR YOUNG AND COMPANY hereinafter ref erred to as CONSULTANT. RECITALS WHEREAS, the City has determined that a need exists to replace or substantially improve the accounting software system presently running on the City's Hewlett-Packard computer system; and WHEREAS, the Consultant has the qualifications to assist the City in evaluating the present system and selecting new accounting software; and WHEREAS , the Consult ant shall be an independent contractor of the City. NOW, THEREFORE 9 in consideration of their mutual conve- nants and conditions, the parties hereto agree as follows: (1) DUTIES OF THE CONSULTANT The Consultant shall provide the services outlined in the proposal, Exhibit A attached hereto, dated 3anuary 12, 1984. These services shall include but not be limited to: (a) Review the current general ledger, accounts payable systems including purchase orders, encumbrances , and budgetary reporting as described in Task 1 of the attached proposal. f I w (bl) In the event that the Consultant recommends modifications to the existing software, the Consultant shall assist the City in selecting a qualified firm to perform such modifications and shall act as the City's project manager throughout the process up to and including implementation of such program modifications. (b2) Should the City and Consultant choose to replace the existing accounting software, the Consultant shall assist the City in the evaluation of three software packages as described in Task 2b in the attached proposal. This evaluation shall include interviews with users, onsite visits, benchmark testing and evaluations of system performance with regard to the system specifications developed in this task. The Consultant shall prepare a report to the City summarizing the results of the study, including a summary of any hardware modifications which would be necessary to accommodate the proposed software and present this report to City management. This report shall include a recommendation as to which software system best meets the City's needs. The Consultant shall provide implementation assistance to the City including development of an implementation plan and project coordination and monitoring services. -2- 7 e w (c) Provide a warranty that all staff provided by the Consultant shall have the qualifications necessary to perform the required analysis and that all products and reports provided by Consultant shall be accurate representations of the facts. (2) DUTIES OF THE CITY (a) The City will make payment to the Consultant as pro- vided for in this agreement. (b) The City will make available to the Consultant any do- cument, studies, or other information in its possession related to the proposed project. (c) The City Finance Director shall act as the City's representative for resolution of questions with respect to this project and as the City's representative with respect to performance of this agreement. (3) TERMINATION OF AGREEMENT The City may terminate this agreement at any time by giving written notice to the Consultant of such termination and specifying the effective date thereof, at least fifteen days prior to the effective date of the termination. In event of termination all finished or unfinished documents and other materials prepared pursuant to this agreement shall become the City's property. Upon termination for reasons other than breach of this agreement City shall pay Consultant the reasonable value of the services completed to the date of notice of termination. -3- ? * w J (4) RELEASE OF INFORMATION BY CONSULTANT Any reports, information or other data, prepared or assem- bled by the Consultant under this agreement shall. not be made available to any individual or organization by the Con- sultant without the prior written approval of the City. (5) OWNERSHIP, PUBLICATION, REPRODUCTION AND USE OF REPORTS AND OTHER MATERIALS All documents and materials prepared pursuant to this agree- ment are the property of the City. The City shall have the unrestricted authority to publish, disclose, distribute and otherwise use, in whole or in part, any reports, data, or other materials prepared under this agreement. (6) PAYMENT The Consultant will be paid a maximum of $22,680 dollars for all work necessary to carry out the requirements of this agreement as shown in Exhibit B attached hereto. Actual payment shall be based on the attainment of milestones as shown in Exhibit 8. (7) TIME OF COMPLETION Time is of the essence in carrying out the terms of this agreement. The Consultant shall complete the installation of an accounting system by May 15, 1984, and shall notify the City in writing of any cause for delay beyond this date, If a delay is caused as a result of the City's aictions or inaction, the Consultant's completion deadline shall be extended by the number of days of said delay. In the event the Consultant shall not complete the assigned duties befort -4- 7 m W June 30, 1984, due to no fault of the City, the City may immediately terminate this agreement and shall not be liable for further payments to the Consultant. (8) LIMITS OF THE OBLIGATION The limits of the obligation of the City under this agree- ment is in the sum of $22,680 which amount is estimated to be sufficient to compensate the Consultant for all services performed hereunder during the terms of this agreement. In the event at any time it appears to the Consultant that said sum may not be sufficient, he shall immediately so notify the Finance Director. He will not perform any work or incur any obligation beyond said sum of $22,680 without appropriate amendment to this agreement. (9) CHANGES IN WORK If, in the course of this contract, changes seem merited by the Consultant or the City and informal consultations indi- cate that a change in the conditions of the contract is war- ranted, the Consultant or the City may request a change in the contract. Such changes shall be processed by the City in the following manner. A letter outlining the required changes shall be forwarded to the City or Consultant to inform them of the proposed changes along with a statement of estimated changes in charges or time schedule. After reaching mutual agreement on the proposal, a supplemental agreement shall be prepared by the City and approved by the City Council. Such supplemental agreement shall. not render ineffective or invalid unaffected portions of the agreement -5- ? 0 Changes requiring immediate action by the Consultant or the City shall be ordered by the City Manager, who will inform a principal of the Consultant's firm of the necessity of such action and follow up with a supplemental agreement covering such work. The lump sum amounts detailed in this agreement shall be adjusted for changes, either additive or deductive, in the scope of work. (IO) HOLD HARMLESS The Consultant will indemnify the City against and hold it harmless from all and any cost, expense, or liability for damages on account of injury or death to persons or damage to property or for any copyright or patent infringement resulting from or arising out of or in any way connected with the performance by Consultant of this agree-ment, including the defense of any action arising therefrom. Consultant will reimburse the City for all costs, expenses and losses incurred by it in consequence of any claims, de- mands and causes of action which may be brought against it by any person arising out of the performance by Consultant of this agreement. (11) MAINTAIN INSURANCE Consultant shall, at all times that this agreement is in effect or the premises are occupied by Consultant, cause to be maintained in force and effect an insurance policy or policies which will insure and indemnify both City and Con- sultant against liability or financial loss resulting from -6- 1 m e injuries occurring to persons or property in or about the premises or occurring as a result of any acts or activity of Consultant. The liability under such insurance policy shall be not less than $100,000 for any one person injured or $300,000 for any one accident and $50,000 for property dam- age. The policy shall be written by a responsible company or companies to be approved by City, and shall be noncancel- able except on ten days written notice to City. (12) INDEPENDENT CONTRACTOR Consultant in accordance with his status as an independent contractor, covenants and agrees that he will conduct him- self consistent with such status, that he will neither hold himself out as nor claim to be an officer or employee of the City by reason hereof, and that he will not by reason hereof, make any claim, demand, or application to or for any right or privilege applicable to an officer or employee of the City including, but not limited to, workmen's compensa- tion coverage, unemployment insurance benefits, social se- curity coverage, or retirement membership credit. (13) ASSIGNMENT OF CONTRACT Consultant shall not assign this contract or any part there- of or any monies due or to become due thereunder without the prior written consent of the City. (14) SUBCONTRACTING If the Consultant shall subcontract any of the work to be performed under this contract by Consultant, the Consultant shall be fully responsible to the City for the acts and -7- I 0 omissions of its subcontractor and of the persons either directly or indirectly employed by its subcontractor, as it is for the acts and omissions of persons directly employed by it. Nothing contained in this contract shall create any contractual relationship between any subcontractor of Con- sultant and the City. The Consultant shall bind every sub- contractor and every subcontractor of a subcontractor by their terms of this contract applicable to its work unless specifically noted to the contrary in the subcontract in question approved in writing by the City. (15) PROHIBITED INTEREST No official of the City who is authorized in such capacity on behalf of the City to negotiate, make, accept or approve, or to take part in negotiating, making, accepting or approv- ing any architectural, engineering, inspection, construc- tion, or material supply contract or subcontract in connec- tion with the construction of the project, shall become dir- ectly or indirectly interested personally in this contract or in any part thereof. No officer, employee, architect, attorney, engineer or inspector of or for the City who is authorized in such capacity and on behalf of the City to exercise any executive, supervisory or other similar func- tions in connection with the performance of this contract shall become directly or indirectly interested personally in this contract or any part thereof. -8- * 0 * (16) VERBAL AGREEMENT OR CONVERSATION No verbal agreement or conversation with any officer, agent or employee of the City, either before, during or after the execution of this contract, shall affect or modiffy any of the terms or obligations herein contained, nor such verbal agreement or conversation entitle the Consultant to any additional payment whatsoever under the terms of this contract. IN WITNESS WHEREOF, the parties hereto have executed this agreement on the day and year first above written. CITY OF CARLSBAD, a Municipal Corporation of the State of C a1 if orni a BY FRANK ALESHIRE, City Manager BY CONSULTANT ATTEST: ALETHA RAUTENKRANZ, City Clerk APPROVED AS TO FORM: VINCENT F. BIONDO City Attorney -9- * 1c EXHI E311 "8" PAY KNT SCHEDULE The nature of this project is such that a payment schedule based on the attainment of measurable milestones is to the advantage of both parties. The following schedule of payments shall be followed unless modified in writin and accepted by authorized representatives of both parties Completion Amount DL Date Consul tan Milestone (1) Evaluation of present software and hardware 21 10/84 $ 3,60C - system and presentation of completed report Electing modification of existing software i. Selecting of qualified technicians to (2a) perform modifications to existing software 2/24/84 $ 2,16( ii. Preparation of implementat ion plan, schedules, standards, testing procedures, milestones, and quality control points 3/16/84 $ 2,16( iii. Initiation of testing of completed software modules 4/16/84 $ 2,16( iv. Installation and successful completion all of modifications as described in ii above 5/1/84 $ 2,16( v. Acceptance of completed system by City 6/4/84 $ 2,16( Electing selection of new accounting software i. Presentat ion of completed report covering results of the consultant's review of existing specifications, and present at ion of plans for evaluation software systems 2/17/84 $ 3,24( (2b) ii. Presentation of report on results of review accounting systems 3/16/84 $ 3,24( (3b) Installation of selected accounting systems on the City's HP-3000 computer i . Preparation of implement at ion plans, schedules, standards, testing procedures, milestones and quality control points 3/16/84 $ 2,701 software modules. 4/16/84 $ 2,70 ii. Initiation of testing of installed 7 -& * iii. Completion of installation and final tests 5/1/84 $ 2,700 iv. Acceptance of completed system by City 6/4/84 $ 2,700 The City and Consultant understand that the installation phase of this project is scheduled to be 120 hours of the Consultant's time. exceeded by 10% before the Consultant may request the City to renegotiate the Agreement. The Consultant will notify the City at the earliest sign of delay or excessive use of the Consultant's time on any part of the project. Consultant agrees to reserve at least 120 hours of service for the installatio phase of this project. Completed installation shall be measured by the City as constructive use of outputs such ds reports or checks generated by the new or modified system. Constructive use shall mean the ability of the City to use such outputs in the day- to-day administrat ion of the City's accounting process. This number may be The I tYhiblt q m m Citp of daris’bab Proposal to Provide Software Selection and lmplementa tion A ssis tanc e January 1984 7 . a m ARTHUR YOUNG & COMPANY 1 10 WEST A STREET, SUITE 1400 SAN DIEGO, CALIFORNIA 92101 ARUMUR VOUMG (6 19) 238-1 1 44 January 12, 1984 Mr. James F. Elliott Finance Director City of Carlsbad 1200 Elm Avenue Carlsbad, CA 92008 Dear Mr. Elliott: We are pleased to submit this proposal to the City of Carlsbad to assist in the selection and implementation of an accounting software package. Our proposal is in response to your request of .December 29, 1983, and is designed to meet the specific needs of the City of Carlsbad. Arthur Young & Company is dedicated to providing San Diego County clients with full-service, locally resident consulting support. As such, we have staffed this project with San Diego-based consultants. We look forward to assisting you on this important project. If you have any questions regarding this proposal, please contact Mr. Dan Littrell at (619) 238-1144. Very truly yours, bh*?iGupp-b- 1 a a e - 1 TABLE OF CONTENTS Page I. PROJECT BACKGROUND 1 11. TECHNICAL APPROACH 2 111. PROJECT SCHEDULE AND FEES 6 IV. PROJECT ORGANIZATION AND PERSONNEL A. Project Organization 8 B. Project Staffing 9 V. FIRM EXPERIENCE AND QUALIFICATIONS A. Our San Diego Office 10 B. Our Reputation 11 C. Quality of Service and Experience 11 D. Management Services 12 E. Summaries of Related Engagements 13 VI. RESUMES OF PROJECT TEAM 15 I rn - 7 I. PROJECT BACKGROUND The City currently owns a Hewlett Packard 3000-30 computer. City staff has been dissatisfied with the General ]Ledger and Accounts Payable applications software packages se:Lected and implemented to date. The City seeks to retain a qualified consulting firm to evaluate the current General Ledger and Accounts Payable software packages, and make recommendations regarding the advisability of modifying and enhancing the existing software versus selecting new software. Based on that decision the consultant will a) coordinate the modification and enhancement of the -existing software, or b) assist in the evaluation, testing and implementation of three alternative software packages. -1- e e 11. TECHNICAL APPROACH In this section we present our technical approach, consisting of three tasks. Our approach is based on our understanding of the present environment and our experience in conducting similar engagements. Task 1 - Evaluate Current Software Packages The major objective of this task is to access the current status of the existing General Ledger and Accounts Payable packages, During this task, we will work closely with City staff experienced in the operation of the current systems. Based upon information derived through interviews with City employees and review of system documentation and reports,we will outline the current systems' advantages and disadvantages. In addition to our review of the systems' general capabilities and limitations we will review the systems' technical per- formance including but not limited to: Database structure Database access methods Programming structure Based upon analysis of the review data, we will assist you in evaluating the suitableness of having your existing software modified and enhanced to meet your specifications, We under- stand that the software company (SIMCOM) that acquired the ownership of the software package Carlsbad is using has offered to make modifications and enhancements. We will work with you and the software company in assessing their proposed approach to the software modifications. As a result of this review we will make our recommendations advising the City as to whether we believe it would be a reasonable approach for the City to follow. -2- < 1) - Based upon your decision as to the software approach the City will follow, we will assist in the second task in one of two ways: a) Act as project coordinator for the modifications to b) Assist the City in the evaluation and testing of the existing software, or three alternative software packages Task 2A - Project Coordination of Current Software Modifica- tions - We will assist the City to monitor and benchmark the modifica- tions made by the software firm to the existing software. WE will help the City to prepare an implementation plan to direcl the modifications and enhancements. Included in this plan will be periodic milestones and quality control check points tc ensure that the project remains on schedule and that thc modifications perform the functions correctly. During the quality control check points we will assist the Cit: to develop test data and routines to adequately exercise tht various options of each function being modified and the soft- ware packages as a whole. We will determine if a.ny function2 or capabilities not being modified are not affected by othei modifications. Upon completion of all modifications and enhancements we wil work with the City and Simcom to design and develop a completc system test package. This package will provide the acceptanci testing for the new software by the City. -3- < * - .. Task 2B - Assist in the Evaluation and Selection of Software Packages The major objective of this task is to assist the City in the evaluation and selection of new Accounts Payable and General Ledger software packages. We will review the City's existing system specifications to use as a basis for the functional requirements of the new packages. Together with our information collected during Task 1, we will develop a complete set of specifications for each system sufficiently detailed to be useful in comparing the capabil- $/ ities of the software packages to the City's requirements. , I* We will assist the City in the evaluation of three alternative packages for each of the General Ledger and Accounts Payable systems. During this evaluation we will develop sufficient test data to adequately test the operations of the considered packages. .J : We will accompany the City on site visits to see the software in operation and to interview current users of the software tc determine their level of satisfaction with the software's performance and the level of support supplied by the vendor. If necessary, benchmark testing will be performed on the packages to match the performance of the software against the City's functional specifications. As a result of our site visits, benchmark testing and documen- tation review, we will summarize our findings regarding eack package evaluated. In this summary we will outline the advantages and disadvantages of each alternative resulting fron our analysis of the evaluation data. Based upon the analysi2 results the City will be able to make the final selection oj which software packages to acquire. - r A e * We will evaluate the impact on the City's current hardwart configuration of the selected software packages and makc recommendations as to any additional capabilities that the Cit: may have to acquire in order to properly support the operatioi of the new software packages. These recommendations wil include cost estimates where appropriate. Task 3B - Implementation Assistance Once Task 2B has been performed, we will assist the City in tht preparation and monitoring of the implementation of the ne\ software packages. This process will include the developmen. of an implementation plan including module testing points anc the monitoring of the implementation process against the plan We will act in a similar role as in Task 2A to provide the Cit with project coordination and monitoring of the implementatior of the basic modules in each of the two systems. We wil actively participate in solving any problems that may occu during the implementation process and will report the result: of the problems to the City on a timely basis. In addition tl reporting problem results, a periodic status report on thj progress of the implementation will be prepared and presente to City management. -5- 1) - 111. PROJECT SCHEDULE AND FEES We have estimated our time for this project on a task basis due to the decisions which will occur during this project. The following estimates our involvement, by task: Fees - Hours Task 1 Current System Evaluation 40 $ 3,600 Task 2A Project Management 120 $10,800 of Current Software Modifications Task 2B Evaluation of Three 72 $ 6,480 New Software Packages Management of New Packages Task 3b Implementation 120 $lO,SOO - Since Task 3B is based upon the results of the selection of nea software and, at this point in time, we do not know whici: packages will be -selected we have placed a condition on our Task 3B estimate. We will honor the not-to-exceed figure on Task 3B up to ai amount 10% greater than the proposed fee. If it is determine( that time will be required beyond the additional 10% we wil advise the City of the additional time estimate. We will the continue the project once the new estimate for additional wor has been approved. The fees for our professional services are based on the hour of consulting provided times the applicable hourly billing rat of the consultant performing the work. We estimate our fee for the work described under "Technical Approach" to be $14,4C plus $1,200 for out-of-pocket expenses for Tasks 1 and 2A c $20,880 plus $1,800 for out-of-pocket expenses for Tasks 1, Z and 3B. Expenses resulting from out-of-town travel for si. visits are not included in the above amounts. -6- * ., We are prepared to begin this project on February 1, 1984. We will provide the necessary consulting time to target March 15, 1984 as the package selection date and May 15, 1984 as the initial operational date for the new packages. -7- * - 1 IV. PROJECT ORGANIZATION AND PERSONNEL A. Project Organization In addition to technical competence, the consulting firm chos- en for a project of this importance and magnitude must be capable of successfully managing its own project team. Proven project management techniques enhance the consultaut's ability to meet time commitments and provide realistic recommendations, Having conducted numerous major public and private sector consulting engagements, our Firm has found that a project organization structure such as the one described below has a number of significant advantages: 7 It provides mechanisms for maintaining a meaningful, candid and open level of dialogue between the client and the consultants, maximizing the likelihood that the study's outcome will be both responsive to the organization's needs and acceptable to the personnel it affects. It provides sufficient structure and definition of task responsibilities to ensure efficient and effec- tive utilization of both the client's and consulting firm's staff. The critical roles in this project organization structure are: 1) Project Coordinator The role of the Project Coordinator is to assist in maintaining overall day-to-day direction of the engagement, and to assist in arranging key meetings and providing critical information sources. It is our understanding that Mr. James Elliott will serve as the Project Coordinator. -8- * 2) Partner-in-Charge Our Firm has an on-going responsibility and commit- ment to maintain our national reputation by providing the highest quality professional work possible. It will be the role of the Partner-in-Charge, Mr. Michael Kingsbury, to continually monitor the engagement for the purpose of assuring high quality results and on-time completion of all activities. Mr. Kingsbury has participated in similar assignments and has extensive experience with governmental systems anc operat ions. 3) Project Manager Arthur Young & Company assigns to each engagement e Project Manager who is thoroughly familiar with thc type of work desired by the client and is best suitec to coordinate the activities of the consultant5 assigned to the engagement. The Project Manage] serves as the main contact with the client throughoul the study and directs all of the day-to-day activi- ties. The Project Manager for this study will be Mr Dan Littrell, a Senior Manager in our San Diegc office. B. Project Staffing Arthur Young & Company has assembled a project team possessin1 exceptional technical skills and knowledge of local governmen. operations, These team members will provide the skills experience and time necessary to ensure that the City receive a high quality product. -9- t L * w V. FIRM EXPERIENCE AND QUALIFICATIONS Founded in Chicago in 1894, Arthur Young & Company, like the accounting profession itself, has grown dramatically over the years -- slowly at first but with increasing momentum in the past two decades to meet the growing challenges of a dynamic economy. Today, Arthur Young & Company is one of the largest professional firms in the world, with services available through 74 offices in the United States and over 130 offices abroad . We take pride in our history of growth and expect it to con- tinue, for it is our conviction that any organization serving the business community today must grow if it is to keep pace with the increasingly diverse, complex, and widespread activi- ties of its clients. A. Our San Diego Office Arthur Young & Company has been in San Diego since 1959. Although the Firm is international, the San Diego office retains a strong local identity; the nature of our skills and the style of our practice necessarily reflect the local en- vironment, Like the Firm, however, we are oriented toward the tailored solution of problems and assignments rather than toward the narrow implementation of preconceived ideas. As a matter of policy, we maintain as full a range of interdisci- plinary skills as possible because we believe we can be of maximum service to clients by doing so. When the capacity of our local resources is exceeded, we have available to us thc additional support of our Orange County, Los Angeles and Sal Francisco offices. Currently, our personnel complement in San Diego includes 8( people, of which 70 are professional staff, These professional people are involved in day-to-day activity in the areas ol management consulting, accounting and auditing, and tax con- sult ing. - 10 - 8, w 1 B. Our Reputation Certainly size alone is no sound measure of the quality of a professional firm, except perhaps to the extent that a large and enduring clientele indicates satisfaction with the services rendered. A far more important criterion is the firm's reputa- tion among other members of the profession, among the clients it serves and among the public at large. Throughout the history of Arthur Young & Company, the Firm and its partners individually have maintained a reputation for excellence seconc to none in the professional services field. Our professior prohibits solicitation; thus, the abilities of our staff anc the quality of our work must be one of the highest caliber ij we are to maintain and improve our position. C. Quality of Service and Experience As a Firm we are committed to the objective of providing the highest possible quality of service to all our clients. We accomplish this goal from the beginning through our concen- trated recruiting and selection efforts, through our Firm-wid( training programs and through the experience gained by servin! a widely diversified selection of clients. We believe that we can focus the talents and efforts of ou people and our other resources upon the needs and objectives o each client organization in a constructive and objective manner. Because of our experience, we believe that we ca effectively compliment the knowledge and capabilities of thl client's own staff and contribute new and fresh ideas to thl proposed project. Our basic philosophy can be described in one word - service Immediate availability to our clients of a broad range o - 11 - 2 w ' *- business and technical competence is our prime objective and we have organized our resources accordingly. Arthur Young & Company is not affiliated with any dealer or manufacturer, thus ensuring objectivity when designing and evaluating procedures and systems for our clients. D. Management Services Arthur Young 8z Company's Management Services Group has been ir existence for over twenty-five years. It employs over 60C management consultants and is one of the largest consulting organizations in the country. We are equipped to provide our clients with a variety of man- agement consulting services. These services include: Electronic Data Processing - Design and installation 01 computer systems; feasibility studies; assistance ir modifying and updating existing systems. Office Systems Consulting - Feasibility studies aimed a1 evaluating applications and equipment requirements: design and implementation of off ice systems; assistanct in integrating office technologies and systems. General Management and Organization Consulting - Poli- cies and procedures design; long-range planning; organ- ization planning; general counseling; management-by- objective programs. Operations Analysis - Staffing studies; methods improve- ment/work measurement programs; resource managemen. systems. Financial Planning and Control - General accountin! systems; budgeting systems; cost analysis; profit plan. ning. Personnel and Industrial Relations - Classificatio studies; management development programs; compensatio and incentive plans; employee training. Executive Recruitment - Recruitment of management-leve personnel. - 12 - '. t 'e Q w E. Summaries of Related Engagements Experience on prior projects demonstrates our capability tc ~ perform this project. The following are specific project: related to this proposal. 1 1 I City of Escondido We are currently conducting a requirements analysis 0: the City's data processing and office system needs anc developing an information systems master plan. Thc project also includes the evaluation and selection o computer hardware and software, and definition of dat< processing organizational considerations. County of San Diego Conducted a special review of EDP services. Stud resulted in findings and recommendations regardin turnover and compensation of EDP department personnel training needs, user needs for additional data processin support, project control and reporting system needs an project justification policies and procedures. University of San Diego Assisted the University to select a computer configura tion to perform accounting, registration, admissions class scheduling and student records functions. Infor mational and operational needs were analyzed, and curren and future requirements were developed. Based on thes requirements, computer equipment was selected an application software was designed. San Diego City Schools Developed a long-range data processing plan. Addition ally', evaluated ten data base management system softwar packages against the District's data processing needs As part of another project evaluated the District' payroll operations. Work involved an anal.ysis of bot the operational and data processing aspects of th District's payroll requirements. NU-EAR Electronics Inc., San Diego, California Reviewed accounting and production software package already running on the company's computer. Additionallj documented the major problems and user concerns and mac recommendations for improvement. - 13 - 3 Q w .' I, , Courseware, San Diego, California Assisted in the evaluation, selection and implementation of an accounting software package to run on a micro- computer. - 14 - J n 'L * - w MICHAEL F. KINGSBURY Partner-in-Charge Mr. Kingsbury is the Office Director of Management Services 1 in Arthur Young's San Diego office. He has directed numerous studies of financial systems, many of which have focused on the ability of the system to provide management information for planning and control of the operation. With our emerging business clients he focuses on their needs for adequate finan- cing using computer-based models to project cash requirements, return of investment, and ability to fund debt. His major areas of expertise include general accounting, cost accounting, variable budgeting, capital budgeting and planning and fore- casting systems. Relevant experience includes: Directed a series of engagements for the San Diegr County Grand Jury including management reviews of dat, processing, fleet operations, the contracting procesi and the budgeting process. -0 Directed the design and implementation of an accountini system for a new corporation which provides dat, processing services to the City of San Diego. Assisted in selecting computerized Finatnce System to perform all the fund accounting for the City of Sa Jose. The system was identified through a transfe study which included developing a system definition survey of existing packages, and recommendation of th package to implement. This system will provide accoun ting for all capital outlay and plan fund accounting Assisted in defining financial management syste requirements for the City of Los Angeles. Conducted a management review of the implementation a new computer hardware and software for the City o Seattle. The study led to the identification of number of areas for improvement within the system thi had been implemented. - 15 - > * I. y Q w Michael F. Kingsbury cont. Participated in an engagement for the San Francisco Municipal Railway to prepare a data processing master plan. His responsibilities included the design of systems to fulfill the Section 15 reporting require- ments. Managed an engagement for AC Transit District tc develop a long-range plan for systems and data proces- sing improvements, including a complete review anc analysis of existing accounting and statistical re- porting systems. System specifications were developec to meet both management's information requirements anc federal reporting requirements (FARE). Managed an operational audit of the purchasing func. tion of nine major departments and agencies for thl Territorial Auditor of Guam. Many of our recommenda tions were subsequently enacted into law, regulation and policies. Before joining the Firm Mr. Kingsbury was an instructor at th University of California, Berkeley. He holds an MBA and a B degree from the University of California, Berkeley, both with major in accounting. Mr. Kingsbury is a Certified Publi Accountant, a Certified Information Systems Auditor, and Certified Management Consultant. He has also served as th Chairman of the Library Commission for the City of San Diego - 16 - 1. y L w DAN LITTRELL Project Manager Mr. Littrell is a Senior Manager in our San Diego office, responsible for office systems and data processing consulting. As such, he has been involved in engagements concerned with the planning, design and organization of computer installa- tions for system application software as well as hardware. Mr. Littrell holds an MBA and a BS degree in computer science from California Polytechnic State University in San Luis Obispo. During his four years in industry prior. to joining Arthur Young & Company, he was involved with the establish- ment of a large computer installation in San Diego County. Since joining the Firm, Mr. Littrell had been responsible for systems design, hardware and software select ion and organi- zation of office systems and data processing installations in both the public and private sectors. Recent engagements include the following: -.. Currently managing a project to assist a local City witl: the development of an information systems master plan, and select hardware and software to support those plans. Assisted in the development of a long-range data proces- sing plan for a public sector organization with a dats processing budget in excess of one million dollars . Thc plan included software development, hardware procure- ment and personnel planning for three years. Directed the research and evaluation of a large payroll system for the San Diego City Schools. Evaluatior included analysis of existing payroll data collect ior methods and recommendations for improving them. Developed a detailed implementation/test plan for thc financial data base system for the San Diego Count! Board of Education. - 17 - * I I% * L w -7 Dan Littrell cont. . Performed a management audit of the County of San Diego's data processing department. Recommendations for improvement were made in the areas of turnover and compensation, training, user needs for additional data processing support, project control and reporting system needs and project justification policies and procedures. Analyzed building permit process system for the County of San Diego to determine its effect on home building starts. Managed the review and evaluation of the employee benefits system for a local school district and made recommendations for improvements to ensure system accuracy and reliability. Managed a project to assist the San Diego City Schools in the evaluation and selection of a data base manage- men t s ys tem. - 18 - t -4 'I" c - D 1 FLOYD G. WEBB 1 Project Consultant Mr. Webb is a senior consultant in our San Diego office. He received his Master of Accountancy from Bowling Green State University and a Bachelor's degree in Mathematics from Central Michigan University. He has over ten years experience in the accounting and finance area and is a Certified Public Accountant. Mr. Webb has a diverse business background and has been em- ployed with the largest corporations in San Diego. His most recent business experience includes: For a national inventory service company, performed an evaluation of the control strengths and weaknesses of their accounting and information reporting system. For a semi-custom microchip manufacturer, assisted in the development of data system requirements definition and subsequent vendor selection. For a local utility, coordinated, with the Information Center, the development of IBM Personal Computer Standards, procedures and control points for user deployment. Evaluated software packages compatible with the IBM blicro to determine relevance to the various user departments. For an international public accounting firm, implemented accounting and management information systems. Partici- pated in audits of private and public companies. For a large Defense Contractor, represented Senior Man- agement in the financial aspect of contract management. For a computer manufacturer, assisted division manage- ment in the development of quarterly and yearly finan- cial budgets and business plans. Financial represen- tative in the implementation of automated general ledger, billing and accounts payable system. Mr. Webb is a member of the American Institute of Certifiec Public Accountants and the California Society of Certifiec Public Accountants. - 19 -