DATE: October 8, 2024
TO: Board of Supervisors
SUBMITTED BY: Edward Hill, Chief Operating Officer/Interim Director of Internal Services/Chief Information Officer
Paul Dictos, Assessor-Recorder
Oscar Garcia, Auditor-Controller/Treasurer-Tax Collector
SUBJECT: Termination of Agreement with Fujitsu North America
RECOMMENDED ACTION(S):
TITLE
1. Approve and authorize the Director of Internal Services/Chief Information Officer, or their designee, to give 45 days’ written notice to Fujitsu North America to terminate Agreement No. A-21-363 effective November 22, 2024, pursuant to the Without Cause provision of the Agreement; and
2. Approve and authorize the Director of Internal Services/Chief Information Officer, or their designee, subject to approval by County Counsel as to legal form, to execute any documents or certifications necessary to affect the termination of Agreement No. 21-363.
REPORT
There is no additional Net County Cost associated with the recommended actions, which will allow the without cause termination of agreement No. 21-363 (Agreement) with Fujitsu North America (Fujitsu), pursuant to Section 5(C) of the Agreement. Fujitsu has been working to finalize ongoing modernization of the County’s Property Management Information System (PMIS), converting it from the current outdated COBOL infrastructure to a .NET format. The Internal Services Department, Information Technology Division (ISD-IT), Assessor-Recorder (Assessor), and Auditor-Controller/Treasurer-Tax Collector (ACTTC) internal sponsors for the project have decided that this project is no longer viable, and the solution will not accomplish the expected outcomes. Together, the Departments request termination of the Agreement without cause. This item is countywide.
ALTERNATIVE ACTION(S):
Should your Board not approve the recommended actions, the Departments would be unable to terminate the Agreement and would be required to continue utilizing County funds to support a project that is no longer viable.
FISCAL IMPACT:
There is no increase in Net County Cost associated with the recommended actions. The Agreement includes $3,152,108 for the fixed costs for the conversion project, as well as an additional $1,200,000 for any additional or supplemental services, totaling $4,352,108 for all potential costs. Invoices submitted and approved total $4,074,557 and there are no outstanding invoices.
DISCUSSION:
On September 7, 2021, your Board approved the Agreement with Fujitsu America, for the conversion of the County’s PMIS from the COBOL language to a “.Net” hosting environment. The project began in late September 2021 and was projected to have a “go-live” date of April 2023. During the course of the project, there were five change requests, which extended the timeline from the initial April 2023 “go-live” date. From April 2023, it was extended to July 17, 2023, September 18, 2023, November 6, 2023, February 19, 2024, and finally to July 15, 2024. A final product was not delivered from the project.
On August 8, 2023, your Board approved an assignment of the Agreement from Fujitsu America to Fujitsu, due to an internal restructuring of the company. Fujitsu assumed the rights, interests, obligations, responsibilities, and liabilities for the Agreement.
On August 8, 2023, your Board approved Amendment No. 1 to the Agreement, which increased the maximum compensation by $500,000, to account for changes to the scope of work, inclusive of an increase in defect and bug fixes, as well as an increase in the number of screens and outputs required for complete conversion of the PMIS.
On May 21, 2024, your Board approved Amendment No. 2 to the Agreement, which increased the maximum compensation by $200,000, to account for increased support and testing time required for the conversion of the PMIS.
Section 5(C) of the Agreement provides that the agreement may be terminated, without cause, by either party upon giving 45 days’ advance written notice of an intention to terminate.
Approval of the recommended actions will allow for the termination, without cause, and allow the Director of Internal Services/Chief Information Officer, or their designee, to provide Fujitsu with 45 day’s prior written notice with termination effective November 22, 2024.
REFERENCE MATERIAL:
BAI #33, May 21, 2024
BAI #33, August 8, 2023
BAI #41, September 7, 2021
CAO ANALYST:
Ahla Yang