DATE: October 20, 2026
TO: Board of Supervisors
SUBMITTED BY: Mike Kerr, Director of Information Technology/Chief Information Officer
SUBJECT: Retroactive Agreement with Microsoft Corporation
RECOMMENDED ACTION(S):
TITLE
1. Under Administrative Policy No. 34 for competitive bids or requests for proposals (AP 34) determine that an exception to the competitive bidding requirement under AP 34 is satisfied and a Sole Source-Suspension of Competition is warranted, and that the best interests of the County would be served by entering into an agreement with Microsoft Corporation as Microsoft Corporation is the sole provider of Unified Support services for their proprietary software and products; and
2. Approve and authorize the Chairman to execute a retroactive sole source Agreement with Microsoft Corporation for Unified Support services, effective October 12, 2026, through October 11, 2027, total not to exceed $276,000.
REPORT
There is no additional Net County Cost associated with the recommended actions, which will allow the County to suspend the competitive bidding process under AP 34 and to enter into a retroactive sole source Agreement with Microsoft Corporation (Microsoft) for Unified Support services, which provides ongoing maintenance and technical support services for Microsoft products used by the County. This item is countywide.
ALTERNATIVE ACTION(S):
There is no viable alternative action. Should your Board not approve the recommended actions, the County will not have maintenance and technical support for Microsoft proprietary products and software, such that there is no other entity able to provide support.
SUSPENSION OF COMPETITION/SOLE SOURCE CONTRACT:
It is requested that the County find under AP 34 that an exception to the competitive bidding requirement is satisfied, and a Sole Source-Suspension of Competition is warranted as Microsoft is the sole provider of Unified Support services for their proprietary software and products. Based on this, a letter of interest was not necessary. The General Services Department - Purchasing Division concurs that this satisfies the exception to the competitive bidding process required by AP 34.
RETROACTIVE AGREEMENT:
The recommended Agreement is retroactive due to extended internal reviews.
FISCAL IMPACT:
There is no increase in Net County Cost associated with the recommended actions. The maximum compensation for the one-year recommended Agreement is $276,000. Costs for these services are recovered through charges to user departments. Sufficient appropriations and estimated revenues are included in the Information Technology Services Department (ITSD) Org 8905 FY 2026-27 Adopted Budget and will be included in the FY 2027-28 Recommended Budget request.
DISCUSSION:
On October 7, 2025, your Board approved Agreement No. A-25-513 with Microsoft for Unified Support services, effective October 12, 2025, through October 11, 2026, with a maximum compensation not to exceed $276,710.
Microsoft’s Unified Support services provide ongoing technical services via phone and on-site support to reinforce and maintain Microsoft software products currently used by the County. Diagnostics and problem resolution, software updates, critical fixes, and configuration assistance/reviews are all part of the Microsoft Unified Support service.
The recommended Agreement allows ITSD to contact Microsoft Unified Support for expert technical assistance and services 24 hours a day, seven days a week. Proactive support hours are pre-paid annually, with a $56,100 allocation in the recommended Agreement, and are used for training and planned configuration implementation. The pre-determined hours must be used within the term year and cannot be carried forward. Microsoft is not required to refund any amounts that have been pre-paid if the recommended Agreement is terminated.
The Human Resources Department - Risk Management Division reviewed the recommended Agreement and advised against including the following provisions:
• The recommended Agreement also allows Microsoft to notify the County about new ways to use modern technologies, especially platform technologies. In such cases, the County must assess whether its use is safe. It also states that Microsoft’s online services (i.e., a Microsoft-hosted service to which the County subscribes under a Microsoft volume licensing agreement) are not meant for situations where a failure could cause death, serious injury, or damage; collectively, “High-Risk Use”. Therefore, the County must ensure its applications are designed so that any service failure does not compromise safety. If the County uses the services for “High-Risk Use,” it does so at its own risk.
• The recommended Agreement further provides that the County agrees to defend, indemnify and hold Microsoft harmless from and against all damages, costs and attorneys' fees in connection with any claims arising from a “High-Risk Use” associated with the online services, including any claims based in strict liability or for Microsoft’s negligence in the design or provision of the online service(s) to the County.
• There is a cap on limitation of liability equal to fees paid in the previous 12 months.
• Microsoft will only indemnify the County for Intellectual Property Claims.
• The recommended Agreement does not include insurance provisions.
ITSD believes that the risks associated with the above language are acceptable business risks, in light of the services offered by Microsoft.
Approval of the recommended Agreement will allow ITSD to continue receiving Unified Support services, which includes a one-year term, and total maximum compensation of $276,000. This term deviates from the County’s standard term as Microsoft will not approve the County’s non-allocation-of-funds language, which allows the County to terminate the agreement if funding is not approved by your Board through the annual budget process. Additionally, the recommended Agreement requires that the County pay Microsoft within 30 days of receiving an invoice, which deviates from the 45-day standard County payment term.
REFERENCE MATERIAL:
BAI #39, October 7, 2025
ATTACHMENTS INCLUDED AND/OR ON FILE:
Sole Source Acquisition Request
On file with Clerk - Agreement with Microsoft
CAO ANALYST:
Amy Ryals