Report to: General Committee Report
Date:
SUBJECT: Award of Tender 189-T-08, Microsoft Licencing Agreement
PREPARED BY: Sugun Rao, Technology Manager
Tony Casale, Senior Buyer
RECOMMENDATION:
THAT the report entitled “Award of Contract # 189-T-08, Microsoft Licencing Agreement” be received;
AND THAT tender 189-T-08 for “Microsoft Licensing Agreement” be awarded to
the overall lowest priced bidder, Dell Canada Inc., in the total amount of $610,687.71
inclusive of PST, for “Microsoft Licensing
Agreement” for a term of three years to expire on June 30, 2011;
AND THAT the
following annual payments,
inclusive of PST towards
Enterprise Agreement and Select Agreement be funded from ITS Department’s
Operating Account 400-404-5397;
·
$202,568.84
(Year 2008)
·
$202,568.84
(Year 2009)
·
$205,550.03
(Year 2010)
AND
THAT the Fixed Discount
Rate of Estimated Retail Pricing less 33%, as submitted, be accepted from the overall lowest
priced bidder, Dell Canada Inc. and applied to the
acquisition of future new Microsoft application and Server products for a term
of 3 years to expire on
AND THAT staff
be authorized to enter into a 3-year Enterprise Agreement and Select Agreement
with Microsoft Canada and Dell Canada Inc. in a form satisfactory to the Town Solicitor
for the provision of
the licensing of Microsoft desktop and server products at discounted rates;
AND THAT the Mayor and the Town Clerk be
authorized to execute the agreement;
AND THAT Staff be authorized and directed to do all things necessary to give effect to this resolution.
EXECUTIVE SUMMARY:
Not Applicable
FINANCIAL CONSIDERATIONS:
|
The following table is a summary of the financial considerations for this report: |
||||
|
|
|
|
|
|
|
Original Budget and Account # |
|
$ 328,000.00 |
|
400-404-5397 |
|
|
|
|
|
|
|
Current Budget Available (unspent) |
|
$ 328,000.00 |
|
|
|
Less Cost of award inclusive PST |
|
($202,568.84) |
|
Awarded
to Dell |
|
Budget Remaining |
|
$ 125,431.16 |
|
|
1. Purpose 2. Background 3. Discussion 4. Financial
5. Others (Environmental, Accessibility, Engage 21st, Affected Units) 6.
Attachment(s)
PURPOSE:
The purpose of this report is to obtain approval to award the tender
for “Microsoft Licensing Agreement” to the lowest priced bidder, Dell Canada
Inc., for a term of three (3) years to expire on
In July
2005, Council approved staff to enter into an agreement with Microsoft
The Town
issued a tender for an authorized reseller of Microsoft products with price as
the main evaluation criteria. In the tender pricing was requested for maintenance
and support of all products under Enterprise Agreement (EA) and Select
Agreement (SA) and also Discount rates for acquisition of new products.
The
products included in the EA are Windows Operating Systems upgrade, Microsoft
Office Suite, Client Access License for file, print, Exchange Enterprise (for
email), System Management Server (for asset management and software deployment)
and SQL Server (for database), Development Network (for research and
development), TechNet (for server maintenance) and Essential Support (for applications
and technical support) and training.
The
products included in the SA are the Window Server Operating Systems upgrade,
Exchange Server, Content Management Server (Web content management), Microsoft
SQL Server, Microsoft Visio, Microsoft project.
The
benefits of EA and SA with Software Assurance Program includes the ability to
upgrade and downgrade to any version of a product included in the EA and
elimination of large one-time budget impacts by splitting the cost over
multiple years, the ease of licensing administration and legal compliancy, and
the significant discount level over individual licensing purchase models (full
retail price). It allows the Town to update to the latest versions of software
and run a consistent set of versions of Microsoft software and eliminates
problems of having different versions spread randomly across departments, and resultant
incompatibilities. This also allows us to standardise and facilitate deployment
of standard operating and office products. Additional benefits includes, Unlimited
web based technical support, 30 days of Microsoft certified training for
technical staff, Microsoft Home use Advantage which allows staff with Town email
ID, right to install the current version of Microsoft office products at home
for the cost of shipping the media.
OPTIONS/ DISCUSSION:
The Town will obtain significant savings by entering into a licensing
agreement with a Microsoft Large Account Reseller (LAR). If Town does not sign the Enrolment with a
LAR, Microsoft software cannot be purchased at government discounts. Full retail pricing is about 70% higher than
government pricing and is not recommended.
It has been determined that the EA is the most cost-effective option for purchase
of the Town’s desktop computing products based on the current software
replacement strategy. All other Microsoft products that are not covered by the
EA will be covered by the Microsoft Select Agreement.
The 2008 Operating Budget of $328,000 was comprised of $273,500 for the Town Microsoft products and $54,500 for the Markham Public Library (MPL) Microsoft products. Regarding the Town products, the cost estimate for budget consideration was obtained from the vendor and was based on the past negotiated pricing. For the MPL products, the pricing estimate for budget consideration was obtained from Microsoft Listed Academic Pricing.
The tender response created a scenario whereby the actual cost for the Town MS Products was $202,568.84, a favourable variance of $70,931.16 per year, for next three years when compared to the estimated amount.
The EA would cover all Town PCs, except Markham Public Library which qualifies for the Microsoft Academic discounted rates when buying licenses. Covering Library PC’s under an Enterprise Agreement worked out to be considerably more expensive and a decision was made to exclude the MPL’s requirements at this point. Instead, for Library we are proposing to purchase the software as opposed to the EA at the time of desktop refresh in 2011. Due to the exclusion of the MPL products, the Town will realize an additional cost avoidance of $54,500.00 for total savings of $125,431.16.
2009
operating budget includes the reduce amount of $202,568.84.
To reduce the risk of price fluctuation, Discount rate was requested. The Discount rates are guaranteed for the duration of the 3 year contract and are applied to products acquired under the Microsoft Select Master Agreement.
BID INFORMATION
|
Advertised, place and
date |
ETN, |
|
Bids closed on |
|
|
Number of contractors
picking up bid documents |
7 |
|
Number of contractors
responding to bid |
4 |
DETAILED PRICING
INFORMATION
|
Companies |
Price inclusive of PST |
|
Dell Canada Inc |
$610,687.71 |
|
Compugen Inc. |
$619,054.20 |
|
SHI |
$641,618.64 |
|
Softchoice Corp. |
$643,678.87 |
ENVIRONMENTAL CONSIDERATIONS:
Not Applicable
ACCESSIBILITY CONSIDERATIONS:
ENGAGE 21ST CONSIDERATIONS:
BUSINESS UNITS CONSULTED AND AFFECTED:
Not Applicable
RECOMMENDED BY:
________________________ ________________________
Nasir Kenea, Andy Taylor,
Chief Information Officer Commissioner, Corporate Services
ATTACHMENTS:
Not Applicable