REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
April 9, 2024
FROM
MELANIE OROSCO, County Librarian, Library
SUBJECT
Title
Contract with OC Tech Innovations for Microsoft Licensing
End
RECOMMENDATION(S)
Recommendation
Approve contract and the incorporated Microsoft Online Subscription Agreement, including non-standard terms, with OC Tech Innovations to provide Microsoft licensing to all public County Library computers and devices in the not-to-exceed amount of $100,000 retroactively effective February 1, 2024, through January 31, 2026.
(Presenter: Melanie Orosco, County Librarian, 387-2220)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Improve County Government Operations.
Operate in a Fiscally-Responsible and Business-Like Manner.
FINANCIAL IMPACT
Approval of this item will not result in the use of Discretionary General Funding (Net County Cost). The cost to the San Bernardino County Library (Library) for the contract with OC Tech Innovations (OC Tech) is a not-to-exceed amount of $100,000, with an annual cost of $50,000. Adequate appropriation has been included in the Library’s 2023-24 budget and will be included in subsequent recommended budgets.
BACKGROUND INFORMATION
The Library has utilized OC Tech to maintain Microsoft licenses for over 1,200 public computers since 2020. The Microsoft licenses allow Library patrons to use Microsoft Word, Excel, PowerPoint, and other Microsoft applications free of charge at the Library’s 32 branch locations. As these Microsoft licenses are utilized for public computers within the Library’s branch locations, Library procures these separately from the Countywide licenses provided for County staff and departments through the Innovation and Technology Department.
The contract with OC Tech is OC Tech’s standard commercial contract, which includes terms that differ from the standard County contract and omits certain County standard contract terms. OC Tech is unwilling to negotiate these terms. The non-standard and missing terms include the following:
1. OC Tech’s maximum liability to the County is limited to the fees paid by the County in the 12 months preceding the event giving rise to liability.
• 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.
2. The contract does not require OC Tech to meet the County’s insurance standards as required pursuant to County Policies 11-05, 11-07 and 11-07 Standard Practice (SP).
• County policy requires contractors to carry appropriate insurance at limits and under conditions determined by the County’s Risk Management Department and as set forth in County policy and in the County standard contract.
• Potential Impact: The County has no assurance that OC Tech will be financially responsible for claims that may arise under the contract, which could result in expenses to the County that exceed the total contract amount.
3. The contract does not require OC Tech to indemnify the County, as required by County Policies 11-05 and 11-07, including for intellectual property infringement claims.
• The County standard contract indemnity provision requires the contractor to indemnify, defend, and hold County harmless from third party claims arising out of the acts, errors or omissions of any person. The standard contract provision for intellectual property indemnity is: Contractor will indemnify, defend, and hold harmless County and its officers, employees, agents and volunteers, from any and all third party claims, costs (including without limitation reasonable attorneys’ fees), and losses for infringement of any United States patent, copyright, trademark or trade secret (Intellectual Property Rights) by any goods or services.
• Potential Impact: OC Tech is not required to defend, indemnify or hold the County harmless from any claims, including indemnification for claims arising from OC Tech’s negligent or intentional acts and intellectual property infringement. If the County is sued for any claim, including intellectual property infringement based on its use of OC Tech’s services, the County may be solely liable for the costs of defense and damages, which could exceed the total contract amount.
The contract with OC Tech incorporates by reference Microsoft’s Online Subscription Agreement (Subscription Agreement). This is Microsoft’s standard commercial contract, which includes terms that differ from County standard contract and omits certain County standard contract terms. By entering into the contract with OC Tech for the Microsoft licenses, the County is also agreeing to the terms in the Microsoft Subscription Agreement. Microsoft is unwilling to negotiate these terms. The non-standard and missing terms include the following:
1. Venue for disputes arising under the Subscription Agreement is in the state of Washington.
• County Policy 11-05 requires venue for disputes in Superior Court of California, County of San Bernardino, San Bernardino District.
• Potential Impact: Having a venue in the state of Washington may result in additional expenses that exceed the amount of the contract.
2. Microsoft’s maximum liability to the County is limited to the amount paid under this contract for the online service during the 12 months before the cause of action arose.
• The County standard contract does not include a limitation of liability.
• Potential Impact: Claims could exceed the liability cap and the Subscription Agreement amount leaving the County financially liable for the excess.
3. The Subscription Agreement does not require Microsoft to meet the County’s insurance standards as required pursuant to County Policies 11-05, 11-07 and 11-07SP.
• County policy requires contractors to carry appropriate insurance at limits and under conditions determined by the County’s Risk Management Department and as set forth in County policy and in the County standard contract.
• Potential Impact: The County has no assurance that Microsoft will be financially responsible for claims that may arise under the contract, which could result in expenses to the County that exceed the total contract amount.
Library recommends approval of this retroactive contract, including non-standard terms, to avoid disruption of its fully automated customer services online at its Library Branch locations. As the prior contract for Microsoft licensing expired in January 2024, OC Tech agreed to continue providing services until the procurement was completed and a new contract was initiated, resulting in a retroactive effective date of the recommended contract.
PROCUREMENT
Library contacted three vendors, OC Tech, Softchoice, and ConvergeOne, for a 30-day period, requesting quotes for Microsoft licensing for Library devices and computers. Only one of the vendors, OC Tech, responded to the request. After reviewing the quote submitted by OC Tech, the Library is recommending award of the two-year contract with OC Tech based on its ability to provide Microsoft licensing services to libraries. The Purchasing Department supports this competitive procurement based on the informal quotes solicited for the services.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Kaleigh Ragon, Deputy County Counsel, 387-5455) on March 20, 2024; Innovation and Technology (Damian Parsons, Chief Finance Officer, 388-5932) on March 18, 2024; Risk Management (Victor Tordesillas, Director, 386-8621) on March 19, 2024; Purchasing (Ariel Gill, Supervising Buyer, 387-3372) on March 20, 2024; Finance (Elias Duenas, Administrative Analyst, 387-4052) on March 20, 2024; and County Finance and Administration (Valerie Clay, Deputy Executive Officer, 387-5423) on March 20, 2024.