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HomeMy WebLinkAbout2022-08-30; City Council; ; Renewal of Master Services Agreement for Hosting and Professional Services with Navisite Inc. for the Lawson Human Capital Management System Software and ManagementCA Review CKM Meeting Date: To: From: Staff Contact: Subject: District: Aug. 30, 2022 Mayor and City Council Scott Chadwick, City Manager Doug Kappel, IT Manager doug.kappel@carlsbadca.gov, 442-339-2791 Maria Callander, IT Director maria.callander@carlsbadca.gov, 442-339-2454 Renewal of Master Services Agreement for Hosting and Professional Services with Navisite Inc. for the Lawson Human Capital Management System Software and Management All Recommended Action Adopt a resolution ratifying and authorizing the City Manager to execute Amendment No. 2 to Service Description No. 004 to the master service agreement with Navisite Inc. for hosting and professional services for the Lawson Human Capital System software in an amount not to exceed $446,625 for a term ending June 30, 2023, with the option for one additional one-year extension, and approving carrying $446,625 forward from the fiscal year 2021-22 Information Technology Operating Fund budget into the current budget. Executive Summary The city uses the Lawson Human Capital Management System software for its human resources, benefits, employee self-service and payroll applications. Since 2010, the city has contracted with Velocity Technology Solutions Inc., which was recently acquired by Navisite Inc., to host and service the system. This proposed amendment to the city’s agreement with Navisite would extend the agreement until June 30, 2023, with the option for one additional one-year extension. The current agreement contains a provision for two one-year extensions. The City Council is also being asked to authorize the City Manager to execute the second of the one-year extensions if the city determines the extension to be appropriate. The City Council’s approval is required because Carlsbad Municipal Code Section 3.28.060 – Procurement of Professional Services and Services – designates the City Council as the awarding authority for procurement of professional services and services that will cost the city more than $100,000 per agreement year. Aug. 30, 2022 Item #7 Page 1 of 11 Staff had expected to present this item to the City Council in the last fiscal year, and the $446,625 cost of extending this agreement was included in the Information Technology Department’s fiscal year 2021-22 Operating Fund budget. However, the change in the company’s ownership delayed this request, as detailed below. Because of that delay, staff are also asking the City Council to ratify the amendment and approve carrying forward the unspent fiscal year 2021-22 Operating Fund budget to the budget for the current fiscal year. Discussion Background The City Council has approved numerous amendments to the agreement since its initial adoption in 2010 to extend and revise the various services provided by Navisite. The following amendments are specific to the current Recommended Action: • Jan. 24, 2017 - Revisions to the agreement’s Service Description No. 004 regarding the specified application management, hosting services, consulting services to be provided and extending the agreement to June 30, 2020, with an auto renewal clause. • June 23, 2020 - Amendment No. 1 to Service Description No. 004 to remove the auto renewal clause, include additional services and extend the agreement to June 30, 2022. The agreement with Navisite expired on June 30, 2022, and has the option to extend for two additional one-year periods. Navisite has continued to provide the necessary service since the end of June without the benefit of an agreement. This will be the first of the one-year extensions. It will end on June 30, 2023. Funding for the second extension is to be included in the annual budget request process for FY 2023-24. Services provided The extension to the agreement is required to provide the operation of all the modules of the Human Capital Management System. The agreement calls for Navisite to provide: • All required hardware, operating system and database licenses, as well as maintenance of the infrastructure necessary to support the Lawson Human Capital Management System application • Full functional and technical support for the city’s Human Capital Management System and processes • Extended support, to include existing interfaces with external systems such as the city’s timekeeping and learning management systems. • Customer support at all hours and days of the week • Infor Active Directory Federation Services, which allow staff to login into Lawson using the same username and password that is used to login to their network accounts • Process automation that provides for automating manual and process-intensive human resource workflows and workplace standards • Microsoft add-ins • Design Studio • Lawson Business Intelligence reporting system • Tax applications • Disaster recovery • Employee self service Aug. 30, 2022 Item #7 Page 2 of 11 Budget carryforward request As noted above, staff expected to resolve and present this amendment to the City Council before the agreement ended, at the end of the 2021-22 fiscal year. But Navisite’s recent purchase of Velocity Technology Solutions, the company that had been providing these services to the city, delayed the company’s response to the city’s requests for an amendment to the agreement and for the corresponding invoices required for payments. Navisite explains the reasons for the delay in the memo attached as Exhibit 2. Because of this delay, staff are requesting the City Council approve carrying the unspent $446,625 that had been budgeted for this agreement forward from the Information Technology Department’s fiscal year 2021-22 Operating Fund budget to the department’s operating fund budget for fy 2022-23. This request will be presented as part of the annual carryforward request item set to be brought to the City Council in late September but, if approved with this action, will be indicated as having already being approved by the City Council. The Information Technology Department expects to have sufficient available budget at 2021-22 fiscal year end to fund these services Options Staff recommend the City Council ratify and authorize the City Manager to execute Amendment No. 2 to Service Description No. 004 to the existing master service agreement with Navisite for a term ending June 30, 2023, with the option for one additional one-year extension and approve the request to carry $446,625 forward from the fiscal year 2021-22 Information Technology Operating Fund budget to the FY 2022-23 Operating Fund budget. Staff provide the following options for the City Council’s considerations: 1. Adopt a resolution authorizing the City Manager to execute an amendment to the Master Service Agreement and Purchase the Renewal of Hosting Services and Professional Services with Navisite, Inc. for the Lawson Human Capital Management System software for the term ending on June 30, 2023, with the option for an additional one-year extension Pros • Navisite will continue to maintain the hardware, operating system, and database, licenses and maintain the infrastructure necessary to support the Lawson Human Capital Management System application • Extending the agreement allows the city to continue using the Lawson system without interruption and without having to undergo a lengthy bidding and selection process. Cons • None identified 2. Do not adopt resolution and discontinue the Master Service Agreement and Purchase of Renewal of Hosting Services and Professional Services with Navisite Inc. for the Lawson Human Capital Management System software Pros • None identified Aug. 30, 2022 Item #7 Page 3 of 11 Cons • The city would have to acquire the necessary hardware and infrastructure to support an onsite installation of the Lawson Human Capital Management System • The city would need to negotiate a separate professional services agreement with Navisite to migrate the data and configurations the city has in its existing Lawson Human Capital Management System data from NaviSite’s hosted environment to an onsite installation • The Lawson Human Capital Management System is based on the Oracle relational database management system. The Information Technology Department does not currently have any staff with the training and certifications required to manage such a system. As a result, the city would need to hire additional staff or enter into an agreement with an outside consultant for the management of an Oracle database environment. 3. Direct staff to research other hosting providers with the ability to host and maintain the Lawson Human Capital Management System. Pros • There may be potential for cost savings with other hosting providers Cons • This option will result in Navisite decommissioning the City’s Lawson Human Capital Management System that it has been hosting. This would leave the city without such a system • This option would require a formal request for proposal process, which would take several months to complete. Fiscal Analysis The one-year extension with Navisite is for a value not to exceed $394,625. An additional $52,000 is required to cover the remaining balance on the pending invoice for the period ending June 30, 2022. Funding for the services will be provided by the FY 2021-22 Information Technology Department’s budget carryforward request that is part of this staff report. The total amount that would need to be carried forward from FY 2021-22 to FY 2022-23 to complete the pending payments that would have been made in FY 2021-22 had there not been the delays is $446,625. Aug. 30, 2022 Item #7 Page 4 of 11 Amendment Summary Description Extension total Extension FY 2022-23 Extension total Extension FY 2023-24 Total Application service fees $718,836 $386,594 $1,105,430 $405,923 $1,511,353 Infor Active Directory Federation Services 14,933 8,031 22,964 8,432 31396 Employee self-service automation 13,260 - 13,260 - 13,260 Total $747,029 $394,625 $1,141,654 $414,356 $1,556,009 Prior years services na 52,000 52,000 na 52,000 Total not to exceed amount na $446,625 $1,193,654 na $1,608,009 Total not to exceed amount for initial extension agreement and 1st extension to June 30, 2023: $1,193,654 Total not to exceed amount for initial extension with two one-year extensions through June 30, 2024: $1,608,009 Next Steps With the City Council’s approval, staff will execute the agreement documents with Navisite Inc. and Navisite will continue to host and service the city’s Lawson Human Capital Management System software. Environmental Evaluation This action does not require environmental review because it does not constitute a project within the meaning of the California Environmental Quality Act under California Public Resources Code Section 21065 in that it has no potential to cause either a direct physical change or a reasonably foreseeable indirect physical change in the environment. the California Environmental Quality Act. Public Notification This item was noticed in keeping with the state's Ralph M. Brown Act and available for public viewing and review at least 72 hours before the scheduled meeting date. Exhibit 1. City Council resolution 2. Navisite Inc. memo explaining delays to amendments and invoices Aug. 30, 2022 Item #7 Page 5 of 11 RESOLUTION NO. 2022-211 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, RATIFYING AND AUTHORIZING THE CITY MANAGER TO EXECUTE AMENDMENT NO. 2 TO SERVICE DESCRIPTION NO. 004 AND A POSSIBLE ADDITIONAL ONE-YEAR EXTENSION TO THE MASTER SERVICES AGREEMENT WITH NAVISITE, INC. FOR HOSTING AND PROFESSIONAL SERVICES FOR THE LAWSON HUMAN CAPITAL MANAGEMENT SYSTEM SOFTWARE IN AN AMOUNT NOT TO EXCEED $446,625 FOR A TERM ENDING JUNE 30, 2023, WITH THE OPTION FOR ONE ADDITIONAL ONE-YEAR EXTENSION, AND APPROVE THE CARRYFORWARD REQUEST FROM THE FISCAL YEAR 2021-22 INFORMATION TECHNOLOGY DEPARTMENT'S OPERATING FUND BUDGET IN THE AMOUNT OF $446,625 WHEREAS, the City Council of the City of Carlsbad, California has determined that the most effective way to operate and support the Lawson Human Capital Management System (HCMS) is through the use of a hosted solution; and WHEREAS, the City of Carlsbad currently contracts with Navisite, Inc. (Navisite) for HCMS hosting services; and WHEREAS, the current HCMS software (Version 10) is required to have annual support; and WHEREAS, the current agreement expired on June 30, 2022 and Navisite continued to provide the specific services without the benefit of an agreement; and WHEREAS, the expired agreement has an option for two one-year extension; and WHEREAS, the proposed one-year extension will, in addition to the hosting services, provide full functional application support for a one-year period ending June 30, 2023; and WHEREAS, the city manager will have the authority to execute the second one-year extension in the appropriate year if determined to be appropriate and desired to extend the agreement to June 30,2024;and WHEREAS, Navisite will provide hosting and professional services to support Version 10 and application management; and WHEREAS, Information Technology Department expects to have sufficient available budget at 2021-22 fiscal year end to fund these services. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1.That the above recitations are true and correct. Exhibit 1 Aug. 30, 2022 Item #7 Page 6 of 11 2.That Amendment 2 to Service Description No. 004 (Attachment A) is approved and ratified, and the city manager of the City of Carlsbad is authorized to execute all required documents on behalf of the City. 3.That the total Hosting Services for the Lawson Human Capital Management System from Navisite, Inc. shall not exceed $394,625 for term ending June 30, 2023 plus an additional $52,000 for prior year services for a total not to exceed amount of $446,625. 4.That the extension to hosting services is budgeted in the fiscal year 2021-22 Information Technology Department's Operating Budget and is being requested as carryforward from fiscal year 2021-22 the amount of $446,625, with future years' funding being requested during the appropriate fiscal year's budget process. 5.That a carryforward of $446,625 from the fiscal year 2021-22 Information Technology Department Operating Fund budget surplus to fund the Navisite agreement is approved. PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 30th day of August, 2022, by the following vote, to wit: AYES: NAYS: ABSENT: Blackburn, Bhat-Patel, Acosta, Norby. None. Hall. for MATT HALL, Mayor FAVIOLA M�rk Servib.nager (SEAL) Aug. 30, 2022 Item #7 Page 7 of 11 DocuSign Envelope ID: 775F977A-8740-4FB6-BAD5-6FF4EAF60CA6 Attachment A NAVISITE Ratification to Amendment No. 2 to Extend and Amend Service Description SFOP#0348575 This Ratification of Amendment No. 2 (the "Amendment"), the scope of which is described more fully below, is made and entered into between Navisite LLC ("Company" or "Service Provider"), and City of Carlsbad ("Customer"). This Amendment is entered into as of the ?,' ~-t of ~=r , 2022, but effective as of July 1, 2022, and amends and extends Service Desertion No. 004 (the "Service Description") dated January 25, 2017, the related Attachment 1 to the Service Description, and the Master Agreement, including (1) the Addendum to the Master Service Agreement for Application Management and Hosting Services, (2) the Addendum to the Master Service Agreement for Consulting Services and (3) Rider to the Master Agreement, all dated as of February 16, 2010 (collectively the "Agreement"). RECITALS WHEREAS, the Agreement, as amended from time to time, expired on June 30, 2022, and Company continued to provide the specified services without the benefit of agreement. WHEREAS, Customer has requested to extend the Term of the Service Description another 12 months to expire on or about June 30, 2023. WHEREAS, Company desires to extend the Term of the Service Description another 12 months to expire on or about June 30, 2023. WHEREAS, Company and Customer wish to amend the Service Description pursuant to the terms of this Amendment Now, THEREFORE the Parties intending to be legally bound agree as follows, all effective July 1, 2022 (the "Effective Date"): 1. The retroactive extension and amendment of the Agreement is ratified. 2. The parties renew the existing services and extend the term of the Service Description to June 30, 2023. 3. The last paragraph in the Section 2 -Service Charges of Attachment 001 to SD#4 is amended as per below: All Application Services Fee prices and charges shall increase annually beginning on July 1,· 2023 by a percentage of the greater of the Consumer Price Index -All Urban Consumer of the Bureau of Labor Statistics of the U.S. Department of Labor for U.S., for All Items with Base Years 1982-84= 100 (the "CPI-U Index") or five percent (5%) over the amount thereof in the immediately previous such annual period, provided, however, that the annual Service Fee in any year shall not exceed five percent (5%) over the Service Fee for the immediately preceding year. 4. The minimum Application Service Fee as currently in effect, is three hundred ninety-four thousand, six hundred twenty-four dollars and thirty-two cents ($394,624.32) per year. Aug.30,2022 Item #7 Page 8 of 11 DocuSign Envelope ID: 775F977 A-8740-4FB6-BAD5-6FF4EAF60CA6 NAVISITE 5. This Amendment shall commence on the Effective Date defined above and continue in accordance with the term of the Service Description to expire on or about June 30, 2023. For the avoidance of doubt, the Service Description may only be renewed by mutual written consent of the Parties. 6. Except as amended hereby, the Service Description shall remain unchanged and shall remain in full force and effect. Navisite LLC By: f21i.,J Mtt By: N Peter Castello ame: ______________ Name: Title: _ch_i_e_f_c_o_m_m_e_rc_i_a_l_o_f_f_i_c_e _r ____ Title: Date: APPROVED AS TO FORM: CINDIE K. McMAHON, City Attorney BY: {ji,Jit, k f,.yfa.k~ City Attorney Aug.30,2022 Item #7 Page 9 of 11 ANY PROPRIETOR/PARTNER/EXECUTIVEOFFICER/MEMBER EXCLUDED? INSR ADDL SUBRLTRINSD WVD PRODUCER CONTACTNAME:FAXPHONE(A/C, No):(A/C, No, Ext): E-MAILADDRESS: INSURER A : INSURED INSURER B : INSURER C : INSURER D : INSURER E : INSURER F : POLICY NUMBER POLICY EFF POLICY EXPTYPE OF INSURANCE LIMITS(MM/DD/YYYY) (MM/DD/YYYY) AUTOMOBILE LIABILITY UMBRELLA LIAB EXCESS LIAB WORKERS COMPENSATIONAND EMPLOYERS' LIABILITY DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) AUTHORIZED REPRESENTATIVE EACH OCCURRENCE $DAMAGE TO RENTEDCLAIMS-MADE OCCUR $PREMISES (Ea occurrence) MED EXP (Any one person)$ PERSONAL & ADV INJURY $ GEN'L AGGREGATE LIMIT APPLIES PER:GENERAL AGGREGATE $ PRO-POLICY LOC PRODUCTS - COMP/OP AGGJECT OTHER:$COMBINED SINGLE LIMIT $(Ea accident) ANY AUTO BODILY INJURY (Per person)$OWNED SCHEDULED BODILY INJURY (Per accident)$AUTOS ONLY AUTOS HIRED NON-OWNED PROPERTY DAMAGE $AUTOS ONLY AUTOS ONLY (Per accident) $ OCCUR EACH OCCURRENCE CLAIMS-MADE AGGREGATE $ DED RETENTION $ PER OTH-STATUTE ER E.L. EACH ACCIDENT E.L. DISEASE - EA EMPLOYEE $If yes, describe under E.L. DISEASE - POLICY LIMITDESCRIPTION OF OPERATIONS below INSURER(S) AFFORDING COVERAGE NAIC # COMMERCIAL GENERAL LIABILITY Y / N N / A(Mandatory in NH) SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED INACCORDANCE WITH THE POLICY PROVISIONS. THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THISCERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIESBELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZEDREPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement onthis certificate does not confer rights to the certificate holder in lieu of such endorsement(s). COVERAGES CERTIFICATE NUMBER:REVISION NUMBER: CERTIFICATE HOLDER CANCELLATION © 1988-2015 ACORD CORPORATION. All rights reserved.ACORD 25 (2016/03) CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DD/YYYY) $ $ $ $ $ The ACORD name and logo are registered marks of ACORD 6/9/2022 20303 Navisite, LLC Database Holdings, LP 400 Minuteman Rd Andover, MA 01810 20281 12777 22667 44520 A 1,000,000 35978262 4/13/2022 4/13/2023 1,000,000 15,000 1,000,000 2,000,000 2,000,000 1,000,000A 73602615 4/13/2022 4/13/2023 25,000,000B 78184890 4/13/2022 4/13/2023 25,000,000 C 71747320 4/13/2022 4/13/2023 1,000,000N1,000,000 1,000,000 D E&O/Prof. Liab/Cyber D9719807A 4/13/2022 5,000,000 E E&O/Prof. Liab/Cyber EOL-237920 4/13/2022 4/13/2023 5,000,000 City of Carlsbad 1200 Carlsbad Village Dr Carlsbad, CA 92008 REMODBA-01 MICHAELSEPANSKI NFP Property & Casualty Services, Inc.45 Executive DrivePlainview, NY 11803 Zachary Salamon zachary.salamon@nfp.com Great Northern Insurance Company Federal Insurance Company Chubb Indemnity Insurance Company ACE American Insurance Company Crum & Forster Specialty Insurance Company X 4/13/2023 X X X X X X X DocuSign Envelope ID: 775F977A-8740-4FB6-BAD5-6FF4EAF60CA6 Aug. 30, 2022 Item #7 Page 10 of 11 400 Minuteman Road, Andover, MA 01810 / www.navisite.com © 2022 Navisite. All rights reserved. July 13, 2022 City of Carlsbad 1200 Carlsbad Village Drive Carlsbad, CA 92008-1949 Dear City of Carlsbad: Navisite would like to assure the City of Carlsbad that we will continue to provide services, uninterrupted and without any variation of support, during the time that we are working jointly to execute an amendment for the renewal of your contract period commencing on June 30, 2022. We apologize for the delay and inconvenience this may have caused you. We have streamlined our internal and external communications as we focus to deliver promptly on future endeavors. We have modified the Annual Increase in Service Fees related language in the pending amendment in favor of the City of Carlsbad. The language related to the Annual Increase in Service Fees, along with unforeseen past resource constraints at Navisite, were the main source of the delay, outside of the control of the City of Carlsbad. Navisite has resolved resource and contractual constraints to prevent similar issues from recurring in the future. In addition, we have issued a corresponding credit against your most recent invoice reflecting a clear and more favorable interpretation of the Annual Increase of Service Fees related language in your previous contract. Thank you for your continued partnership. We value our relationship and our ability to work through any necessary contractual items for swift resolution. Should any further information be required, please contact me directly at smckeown@navisite.com. Sincerely, Sophia McKeown VP, Customer Success Exhibit 2 Aug. 30, 2022 Item #7 Page 11 of 11