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Board approves $51 million contract package to replace city's financial system; some supervisors voice process and cost concerns
Summary
The board authorized contracts with Oracle America and Accenture for a replacement of the city's financial accounting system after a competitive process and subsequent negotiations increased the total not-to-exceed price to about $50.9 million; two supervisors voted no citing duration, process and preference for open-source alternatives.
The Board of Supervisors on July 16 approved by roll call a resolution authorizing the Office of the Controller to enter into two contracts to replace the city's aging financial accounting and management information system.
The two contracts are: a software licensing and implementation agreement with Oracle America and a professional services agreement with Accenture. The competitive solicitation initially produced a top-ranked combined bid of approximately $26.99 million; subsequent negotiations with the selected vendors expanded the scope and increased the total contract package to a not-to-exceed amount reported to the board at roughly $50.9 million. The controller's office said the negotiations achieved substantial licensing discounts (the office cited up to an 85% reduction on some licensing items) and enabled the city to purchase additional functionality and extended maintenance at a bundled discounted price.
The board heard detailed questions about the procurement process from supervisors concerned about the increase in total cost, the long-term duration of the system and alternatives such as open-source software. Budget Analyst Harvey Rose reported that the selected Accenture/Oracle bid was about 61.6% higher than the second-place proposer in the competitive ranking; the controller's office said the increase reflects negotiated added functionality, longer maintenance and database licensing that would have been required under any proposal.
Deputy Controller Todd Richter told the board that the controller's office ran a multi-year assessment of needs and negotiated optional functionality and extended maintenance at discounted rates and that database licensing/support costs are necessary for any platform. Some supervisors questioned whether the expanded scope should have been recompeted; budget analysts noted the initial competitive process supported the award of the base proposal and that city staff judged the negotiated, expanded package to be in the city's best interest.
On final vote the resolution passed 9-2 with Supervisors Campos and Kim recorded in opposition. After the vote Supervisor Christensen disclosed a potential familial connection to Accenture (a family member works at Accenture but the city attorney advised the supervisor there was no financial conflict requiring recusal); that disclosure was entered into the record but did not change the vote.
Ending The controller's office will proceed with implementation and the city will transition workstreams to the new system; supervisors who opposed the measure urged further study of open-source alternatives and raised questions about long-term licensing costs and vendor lock-in.
