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TO: Mayor Thomas J. Weisner
FROM: James J. Dahl, MIS Director
DATE: January 26, 2016
SUBJECT:
Requesting authority to purchase a five-year Cisco Systems SMARTnet support and maintenance agreement through Sentinel Technologies to be financed through Key Government Finance, Inc. in the amount of $452,271.80 annually.
PURPOSE:
Cisco Systems has provided services for the City of Aurora since 2007. The company offers maintenance and support on all Cisco equipment. Cisco also provides Network Engineers at no cost for network design and planning. This request will consolidate several Cisco support agreements into one, and offer significant savings to the City of Aurora.
BACKGROUND:
In 2007 the City of Aurora standardized on Cisco network switch and routing equipment. In subsequent years, the City grew the network in phases and standardized on Cisco for its VOIP solution. Each phase of development involved purchases of equipment with associated SMARTnet agreements. As a result, the IT Department ended up with several individual support agreements. In 2015 IT staff met with Cisco to combine all renewable contracts into one agreement.
DISCUSSION:
Step one in combining agreements was to pro rate and co-term the various SMARTnet contracts. This was completed in 2015 and all current SMARTnet agreements will expire on February 25, 2016.
By combining all agreements into one contract Cisco is saving on administrative costs, and is able to offer further volume discounts. As a result, 2016 SMARTnet costs will decrease by approximately $220,000.00 and five year savings to the City will be about $660,000.00. Cisco has named Sentinel Technologies, Inc. as the City of Aurora's sales channel partner, and is offering these discounts through Sentinel.
The SMARTnet coverage also includes equipment used by OnLight, and they will reimburse the City for their share of $21,939.40 annually.
As older Cisco equipment is replaced it will be removed from the agreement, and its replacement will be purchased with a one-year SMARTnet agreement. After the first year new hardware will be moved to this master agreement. This can lead to further savings to the City as the cost for support on older equipment is often far more than the cost of support on newer equipment.
In addition to the savings realized from the contract consolidation, Cisco is offering the following items and services as part of the five-year contract package. There will be no charge to the City of Aurora for these additional items.
- Cisco Funded Five Year Finance Cost - Value = $189,183. Cisco is picking up the Cisco Capital Interest costs for this payment plan.
- Cisco Funded Smart Assist for Smart Net Total Care - Value = $31,000. This is an Inventory and Contract Management tool, and support services.
- Cisco Funded Energy Manager Assessment/Audit - Value = $24,000. This audit will quantify how to reduce energy consumption, energy costs, and carbon emissions with an ROI.
- Cisco Funded Security Incident Triage Service - Value = $70,000. Security services many cities are now using to help secure their networks.
The SMARTnet support contract is a budgeted expense, and there are funds available in MIS account 101-1232-419.38-26.
This Finance Department has been contacted to ensure neither Cisco Systems, nor Key Government Financial have outstanding debt with the City.
The Law Department is reviewing the attached contract. A sole source affidavit is also attached.
IMPACT STATEMENT:
The major impacts are positive. They include enhanced stability and support of City networks, and significant savings to the City.
RECOMMENDATIONS:
I request the proposed resolution be adopted.
cc: Alderman O’Connor, Chairman
Alderman Mervine
Alderman Bohman
Alderman Mesiacos, Alternate
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution authorizing the purchase of a five-year Cisco Systems SMARTnet support and maintenance agreement from Sentinel Technologies to be financed through Key Government Finance, Inc. in the amount of $452,271.80 annually.
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, the City of Aurora operates and maintains a city-wide network that utilizes Cisco Systems as its standard network hardware provider, and
WHEREAS, Cisco Systems, Inc. has offered the City of Aurora significant savings and added value benefits on a five-year SMARTnet maintenance contract to be funded through their financing group, Key Government Finance, Inc. at a cost of $452,271.80 annually, and
WHEREAS, funds available in MIS account 101-1232-419.38-26, and
WHEREAS, pursuant to Aurora Code Section 2-335(a)(3) this is a sole source purchase, and failure to act promptly may likely result in a substantial increase in cost thereof to be borne by the city.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: authorization to purchase a five-year Cisco Systems SMARTnet support and maintenance agreement from Sentinel Technologies to be financed through Key Government Finance, Inc. in the amount of $452,271.80 annually, and the Director of Purchasing is hereby authorized to execute all associated purchasing documents.