DATE: December 17, 2024
TO: Board of Supervisors
SUBMITTED BY: Edward Hill, Chief Operating Officer/Interim Director of Internal Services/Chief Information Officer
SUBJECT: Agreement with Support Revolution, Inc. for Third-Party Support of Oracle Product Licenses
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 requirements under AP 34 is satisfied and a suspension of competition is warranted due to unusual or extraordinary circumstances, and that the best interests of the County would be served by entering into an agreement with Support Revolution, Inc., as the vendor is the only cost-effective vendor able to provide the maintenance and support of Oracle PeopleSoft, Database, and technology licenses; and
2. Approve and authorize the Chairman to execute an Agreement with Support Revolution, Inc. to provide maintenance and support of Oracle PeopleSoft, Database, and technology licenses, for a five-year term, including an initial three-year term and two optional one-year extensions, effective upon execution, total not to exceed $2,103,974.
REPORT
There is no additional Net County Cost associated with the recommended actions, which will allow the Internal Services department, Information Technology Division (ISD-IT) to suspend the competitive bidding process to contract with Support Revolution, Inc. (Support Revolution) for third-party maintenance and technical support for Oracle, Inc. (Oracle) PeopleSoft, Database, and Technology licenses (Oracle licenses), including support for tax updates and custom County’s code. Oracle licenses are utilized by County departments and funded through chargebacks to user departments. This item is countywide.
ALTERNATIVE ACTION(S):
Should your Board not approve the recommended actions, ISD-IT would not be able to continue using Oracle products to complete various financial and human resource tasks that are essential to County department operations. Your Board may direct staff to issue a competitive bid for a new vendor to provide maintenance and support for Oracle licenses, but this would result in downtime of Oracle PeopleSoft and the inability to perform federally mandated process such as Wage and Tax Statement (W-2) form preparation.
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 suspension of competition is warranted due to unusual or extraordinary circumstances, as Support Revolution is the only cost-effective vendor able to provide Oracle license maintenance and support services.
On August 4, 2020, your Board approved Agreement No. A-20-286 with Rimini Street, Inc. (Rimini Street) to initiate third party maintenance and support services for the County’s Oracle licenses. Rimini Street decreased the cost for maintenance and support of Oracle licensing by more than half, in comparison to Oracle. On December 12, 2023, your Board approved a one-year agreement with Rimini Street (Agreement No. 23-682), extending third-party support through December 31, 2024. On July 31, 2024, Rimini Street notified their customers that they are moving away from supporting Oracle PeopleSoft products.
The only other vendor available to provide the maintenance and support for the County’s Oracle licenses is Oracle. On October 9, 2024, Oracle indicated that they would be able to reinstate services without incurring back-support fees, but when providing a quote, Oracle indicated that waiving of back-support fees was on a case-by-case basis. Regardless of back-support fees, Oracle proposed support that was over than three times more expensive than Support Revolution without the ability to negotiate a change in licensing. Support Revolution is the only cost-effective option for the County to receive longstanding maintenance and support for the County’s Oracle licenses.
FISCAL IMPACT:
There is no increase in Net County Cost associated with the recommended actions. The maximum compensation for the recommended agreement is $2,103,974 and will be funded by chargebacks to user departments. Sufficient appropriations and estimated revenues are included in ISD-IT’s Org 8933 FY 2024-25 Adopted Budget and will be included in subsequent budget requests.
DISCUSSION:
Since 1994, the County has owned and operated on-premise Oracle products for the County’s day-to-day operations including, but not limited to, the Human Resources Management System, Financial Information System, and Database systems. These products support necessary County operations like personnel tracking, payroll functions, financials, 1099’s and all accounting functions for the County. During the time that the County has owned and operated Oracle products, the County has added customized code, as needed, for operations. As support for these customizations directly through Oracle became increasingly more expensive, the County decided to transition to a third-party for maintenance and support. As noted, the County previously received services from Rimini Street at a decreased cost but needs to transition to a new support vendor as Rimini Street is terminating their support for Oracle PeopleSoft products.
The recommended Agreement has a possible five-year term, which includes an initial three-year term and two optional one-year extensions. The total maximum compensation for the initial three-year term of the agreement is $1,225,468. If the agreement is extended into optional years 4 and 5, the maximum compensation will increase to $1,673,451 and $2,103,974, respectively. At no time shall the maximum compensation exceed $2,103,974.
The recommended Agreement deviates from the County’s standard language as follows:
• The recommended Agreement is on Support Revolution’s standard agreement format. While not on the County’s standard template, many standard County terms were accepted and incorporated into the Agreement.
• The recommended Agreement incorporates limitation of liability language which limits the County to payment of the past twelve months’ fees.
• The recommended Agreement incorporates non-standard indemnification language, requiring the County to defend and hold harmless Support Revolution for using services in breach of the agreement, as well as claims that allege Support Revolution used County data to infringe on other’s intellectual property, and claims by Oracle against Support Revolution in connection with providing the County services. Finally, there is language that Support Revolution will indemnify the County for intellectual property infringement.
• While the Agreement includes non-standard insurance language, it includes greater amounts than the County typically requires for Commercial General Liability and Professional Liability.
The Human Resources Department, Risk Management Division has reviewed the provisions and recommends the Agreement not include limitation of liability or indemnification language. However, ISD-IT believes that the above deviations from the County’s standard language are acceptable business risks and has accepted similar terms in previous agreements for similar services.
Approval of the first recommended action will suspend the competitive bidding process consistent with AP 34, for Support Revolution’s third-party Oracle license maintenance and support services. Approval of the second recommended action will approve the Agreement with Support Revolution for their third-party Oracle license maintenance and support services, for a five-year term, total not to exceed $2,103,974.
REFERENCE MATERIAL:
BAI #9, December 12, 2023
BAI #40, August 4, 2020
ATTACHMENTS INCLUDED AND/OR ON FILE:
Suspension of Competition
On file with Clerk - Agreement with Support Revolution, Inc.
CAO ANALYST:
Amina Flores-Becker