REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF THE COUNTY OF SAN BERNARDINO
AND RECORD OF ACTION
June 22, 2021
FROM
LARRY AINSWORTH, Chief Information Officer, Innovation and Technology Department
SUBJECT
Title
Agreements with ServiceNow, Inc. and Logicalis, Inc.
End
RECOMMENDATION(S)
Recommendation
1. Approve Public Sector Terms of Service Agreement with ServiceNow, Inc., including non-standard terms, to purchase future subscription software licenses, training, and professional installation/configuration services.
2. Approve Terms and Conditions of Sale Agreement with Logicalis, Inc., including non-standard terms, to purchase the ServiceNow software licenses, and provide training, and professional installation/configuration services in the not-to-exceed amount of $2,400,000 from June 23, 2021 through June 22, 2026.
3. Authorize the Chief Information Officer to execute non-substantive amendments to the Statement of Work with Logicalis, Inc. as they pertain to changes to the software licenses, training, and professional installation/configuration services, subject to review by County Counsel, so long as such documents do not increase the total not-to-exceed amount of $2,400,000, or change the duration of the contract.
4. Direct the Chief Information Officer to transmit copies of all documents, when applicable, in relation to these amendments to the Clerk of the Board of Supervisors within 30 days of acceptance.
(Presenter: Larry Ainsworth, Chief Information Officer, 388-5501)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Operate in a Fiscally-Responsible and Business-Like Manner.
FINANCIAL IMPACT
Approval of the Public Sector Terms of Service Agreement with ServiceNow Inc. and the Terms and Conditions of Sale Agreement, with Logicalis, will not result in the use of Discretionary General Funding (Net County Cost). The cost for ServiceNow, Inc. (ServiceNow) Information Technology Service Management (ITSM) software licensing, training, and professional installation/configuration services, to be purchased through the authorized reseller Logicalis, Inc. (Logicalis) in the not-to-exceed amount of $2.4 million, (includes $1,905,903 for the existing quote and $494,097 for future additional licenses or services during the term, if necessary), is included in the Innovation and Technology Department (ITD) Computer Operations 2020-21 Adopted Budget and will be included in future Recommended Budgets. ITD’s operating costs are recovered via service rates approved annually by the Board of Supervisors.
BACKGROUND INFORMATION
ITD uses multiple applications to provide helpdesk services, manage online service requests and provide necessary change management updates. A software subscription with ServiceNow for ITSM will allow ITD to leverage a single application for helpdesk ticketing, online service requests, and to provide change management updates to improve efficiency and streamline processes.
The ServiceNow Public Sector Terms of Service Agreement is ServiceNow’s standard government contract, which includes terms that differ from the standard County contract and omits certain County standard contract terms. The non-standard and missing terms include the following:
1. The contract does not include certain standard County insurance requirements, including the waiver of subrogation.
• The County standard contract requires contractors to carry appropriate insurance at limits and under conditions determined by the County’s Risk Management Department.
• Potential Impact: No waiver of subrogation may allow ServiceNow’s insurer to bring suit against the County, which could result in expenses that exceed the total contract amount.
2. ServiceNow’s total, cumulative liability to the County arising under the contract is limited to the amounts received for the services giving rise to the claim during the 12-month period preceding the event giving rise to the liability, but excludes obligations to pay for products, services, or taxes, obligations to pay third parties under indemnification obligations, intellectual property infringement and ServiceNow’s gross negligence or willful misconduct.
• The County standard contract does not include a limitation of liability.
• Potential Impact: Claims could exceed the liability cap and the contract amount leaving the County financially liable for the excess. In addition, the County’s liability under the contract is not similarly limited.
The Logicalis Terms and Conditions of Sale Agreement is Logicalis’ standard commercial contract, as negotiated between the parties, which includes terms that differ from the standard County contract and omits certain County standard contract terms. The non-standard and missing terms include the following:
1. Logicalis’ liability to the County is limited to the purchase price paid for the product or service that is the basis of the claim and for service desk services, two times the twelve month base charge for the service.
• The County standard contract does not include a limitation of liability.
• Potential Impact: Claims could exceed the liability cap and the contract amount leaving the County financially liable for the excess. In addition, the County’s liability under the contract is not similarly limited.
2. Both parties’ right to bring legal claims is limited to the later of one year after the cause of action first arises or the third anniversary of the contract.
• The County standard contract does not include a limit on the time to bring action.
• Potential Impact: Limiting the County’s ability to bring suit to one year amounts to a waiver of the Statute of Limitations for claims and shortens the period of time in which the County may file a lawsuit under the contract.
3. Payment terms are Net 30.
• County standard payment terms are Net 60 days with no interest or late payment penalties.
• Potential Impact: County standard processing time is 60 days or more. Failing to pay within 30 days will result in a material breach of the contract, which would allow Logicalis to terminate the contract and seek other legal remedies, which could exceed the contract amount.
4. There is no termination for convenience without penalty. The County may cancel the purchase of products only upon written approval of Logicalis and upon terms that indemnify Logicalis against all losses related to such cancelation. The County may only terminate services for Logicalis’ uncured breach of the contract.
• The County standard contract gives the County the right to terminate the Contract, for any reason, with a thirty (30) day written notice of termination without any obligation other than to pay amounts for services rendered and expenses reasonably incurred prior to the effective date of termination.
• Potential Impact: Upon any cancellation or termination by the County, the County is required to pay the full contract amount, which could result in payment liability where no funds are available due to lack of allocation or loss of funding.
ITD recommends approval of the Public Sector Terms of Service Agreement with ServiceNow and the Terms and Conditions of Sale Agreement with Logicalis, including the non-standard terms, to allow ITD to purchase licenses, implement and use an integrated help desk solution for reporting and tracking service requests from County departments.
PROCUREMENT
On January 18, 2021, ITD released Request for Proposals (RFP) No. ISD121-ADM-4083 via the County’s Electronic Procurement Network (ePro) for ServiceNow ITSM software licenses, training, and professional installation/configuration services from ServiceNow authorized resellers. The proposals were evaluated based on the following criteria: qualifications and experience, technical review, interview, presentation or demonstration, cost, and references. Proposals were received from the following vendors:
|
Vendor |
Location |
|
Logicalis |
Corona, CA |
|
CAI |
Irvine, CA |
|
Red River |
Claremont, NH |
|
Cask |
San Diego, CA |
|
Ahead |
San Clemente, CA |
An evaluation team determined that Logicalis was the vendor that best met the County’s needs in providing these licenses and services. No protests were received.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Bonnie Uphold, Deputy County Counsel, 387-5455) on May 27, 2021; Purchasing (Bruce Cole, Supervising Buyer, 387-2148) on June 2, 2021; and County Finance and Administration (Kelly Welty, Deputy Executive Officer, 387-5423) on June 3, 2021.