Item - 2019.GL10.9

The General Government and Licensing Committee recommends that:

1.  City Council authorize the Chief Technology Officer to negotiate and enter into an amending agreement with Microsoft Canada Inc. on the following terms:
 

a.  extend the term of the agreement for a two-year period from January 1, 2020 to December 31, 2021;

 
b.  increase the scope of work to purchase an Extended Security Update for the City's Windows 2008 servers; and

 
c.  increase the total amount of the agreement by $920,488 net of Harmonized Sales Tax ($936,689 net of Harmonized Sales Tax recoveries), revising the existing contract value from $338,291 net of Harmonized Sales Tax to $1,258,779 net of Harmonized Sales Tax ($1,280,934 net of Harmonized Sales Tax recoveries).

The City of Toronto technology strategy enables continuous evolution of secure digital technology tools. A key aspect entails ensuring staff are provided with modernized Microsoft Office tools for email, word processing, spreadsheet, and PowerPoint functionality to improve business operations, collaboration, and productivity.

As the City of Toronto conducts necessary due diligence as part of the technology roadmap to cloud technologies. The City of Toronto leverages the Province of Ontario's contractual agreement with Microsoft thereby achieving the best available pricing from Microsoft. There is a need to extend the Microsoft Purchase Order and a corresponding increase in the dollar amount to maintain the City of Toronto investment and continue receiving the best available pricing from Microsoft.

In December 2016, City Council granted staff the authority to utilize the Province of Ontario Agreement for three years ending in December 2019. The agreement supports the implementation of two projects (Microsoft Office 365 Pilot Assessment and Segregation of the Accountability Officers using Microsoft cloud technology).

The purpose of this report is to seek authority to amend Purchase Order Number 6047456 with Microsoft Canada to extend the term for a period of two years from January 1, 2020 to December 31, 2021. Authority is also sought for an additional $920,488 net of Harmonized Sales Tax. This increases the total contract value from $338,291 to $1,258,779 net of Harmonized Sales Tax. These funds are needed for the supply of Microsoft cloud technology tools for the City's cloud digital pilot projects. It is also needed to acquire Microsoft Windows on premise security technology under the Province's Microsoft Enterprise Agreement.

Leveraging the Province of Ontario's Microsoft Master Business Agreement (#U8364444) provides the City with the best possible pricing for Microsoft Licenses. Pricing and the terms and conditions of the Province of Ontario's Enterprise Agreement are more favourable than the standard agreements.

City Council approval is required in accordance with Municipal Code Chapter 195, Purchasing, where the current request exceeds the Chief Purchasing Officer's authority of the cumulative five-year commitment limit for each vendor under Article 7, Section 195-7.3(D) of the Purchasing By-law or exceeds the threshold of $500,000 net of Harmonized Sales Tax allowed under staff authority as per the Toronto Municipal Code Chapter 71, Financial Control, Section 71-11A.