REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
June 27, 2023
FROM
SHANNON D. DICUS, Sheriff/Coroner/Public Administrator
SUBJECT
Title
Agreement with Oxford Instruments America, Inc. for Software Maintenance
End
RECOMMENDATION(S)
Recommendation
1. Authorize the Purchasing Agent to issue a Purchase Order for Oxford Instruments America, Inc., in the amount of $41,764, for the provision of software maintenance services, for the retroactive period starting on June 16, 2023 through June 15, 2026.
2. Authorize the Purchasing Agent to sign the Agreement, including non-standard terms, with Oxford Instruments America, Inc., for the provision of software maintenance, or other purchases, as authorized by County Policy, for the period set forth in each invoice or purchase document.
3. Direct the Purchasing Agent to transmit the executed Agreement to the Clerk of the Board of Supervisors within 30 days of execution.
(Presenter: Ernie Perez, Deputy Chief, 387-3760)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Operate in a Fiscally-Responsible and Business-Like Manner.
Provide for the Safety, Health and Social Service Needs of County Residents.
FINANCIAL IMPACT
Approval of this item will not result in the use of additional Discretionary General Funding (Net County Cost). The cost for the first year of Oxford Instruments America, Inc. (OIA) maintenance services in the amount of $13,512, for its AZtec MicsF+/x-sream2/x-Act (AZtec) software, will be funded within the Sheriff/Coroner/Public Administrator’s (Department) existing 2022-23 budget allocation (4430001000). Sufficient appropriation will be included in future recommended budgets.
|
Year |
Equipment & Software Maintenance Fees |
|
2022-23 (Year 1) |
$13,512 |
|
2023-24 (Year 2) |
$13,917 |
|
2024-25 (Year 3) |
$14,335 |
|
Total Cost |
$41,764 |
BACKGROUND INFORMATION
The Department’s Scientific Investigation Division (SID) currently utilizes Scanning Electron Microscopes (SEM) that requires the use of the AZtec software to conduct gunshot residue (GSR) analysis for investigative purposes. The software, as any all other types of software in the market, for any application, needs of fixes or upgrades from time to time. This agreement will provide upgrades or fixes to the software without additional charges during the three-year period being requested on this Item. It is common practice in the industry that highly sophisticated software requires maintenance agreements at an additional cost to address those issues. The data that is collected using the SEM and AZtec software combination is reviewed, and reports are generated by a Criminalist for required submission of results to investigating agencies.
Approval of this item will provide SID with a three-year agreement with OIA, for AZtec software maintenance services, including non-standard terms, starting retroactively on June 16, 2023 through June 15, 2026. The agreement includes terms that differ from the standard County contract and omits certain County standard contract terms as follows:
1. The agreement requires the County to indemnify OIA: (1) against all liability in relation to any Intellectual Property supplied by the County to OIA, so that it does not infringe on an third party rights; (2) any liability in relation to loss, damage, cost or expense arising from any mistake, defect, virus, poor quality or inaccuracy of any program, electronic communication or other materials supplied by, or on behalf of, the County to OIA; (3) against any legal fees and other costs of collections related to the collection of service fees and payments; (4) against all liability in relation to Regulatory Compliance for any import and export or the delay, or failure to obtain any required licenses, permits, or approvals by the County for Services to be supplied by OIA that require such compliance being in place; (5) against any liability in relation to claims made by any employee, former employee, or contractor of the County made against OIA, or their agents or subcontractors, regarding their employment rights; and (6) against any liability in relation to the County’s failure to comply with any obligations of the agreement, or any action of OIA required to be taken due to request, direction, or materials provided by the County, or by the negligence or willful misconduct of the County.
• The County standard contract does not include any indemnification or defense by the County of a contractor.
• Potential Impact: By agreeing to indemnify OIA, the County could be contractually bound to provide indemnity to a private company. Claims that may otherwise be barred against the County, or are time or expense limited, could be brought against OIA without such limitations and the County would be responsible to defend and reimburse OIA for costs, expenses, and damages, which could exceed the total agreement amount.
2. OIA is not required to meet the County’s insurance standards as required pursuant to County Policy 11-07.
• The County’s policy requires contractors to carry appropriate insurance at limits and under conditions determined by the County’s Risk Management Department and set forth in the County standard contract.
• Potential Impact: The County has no assurance that OIA will be financially responsible for claims that may arise from the County’s use of the software, which could result in expenses to the County that exceed the total agreement amount.
3. OIA limits its liability to refunding any monies paid in respect of defective services if proper performance of the software is not possible; to no obligation for the equipment if OIA has properly re-performed the services; and no liability to the County for any loss that could have easily been prevented or reduced, or for any claim against the County by any other party.
• The County standard contract does not permit the contractor to limit its liability in the performance of a contract.
• Potential Impact: The Department could potentially not recover all damages incurred during the agreement period.
4. Payment terms are Net 30 and overdue payments accrue interest at the rate provided by applicable law.
• The County’s standard payment terms are Net 60 with no interest or late payment penalties.
• Potential Impact: Failure to pay within 30 days of the invoice date may result in a material breach of the agreement if the Department does not cure the breach within seven days of receiving notice from OIA. This would allow OIA to terminate the agreement at their discretion.
5. Governing Law/Venue is the State of Massachusetts.
• The County’s standard contract requires California governing law.
• Potential Impact: The agreement will be interpreted under Massachusetts law. Any questions, issues, or claims arising under the agreement will require the County to hire outside counsel competent to advise on and practice Massachusetts law, which may result in fees that exceed the total amount paid for the agreement.
6. There is no termination for convenience.
• The County’s standard contract gives the County the right to terminate a contract for any reason with a 30-day advanced written notice.
• Potential Impact: The County may be liable for payments to OIA, including possible interest, until agreement expiration.
7. The County may not assign the agreement, or any rights thereunder in whole or in part. The agreement is silent on assignment by OIA.
• County policy requires that the County approve any assignment of a contract.
• Potential Impact: OIA may assign the agreement to another entity the County is unfamiliar with without the County’s approval.
8. The agreement does not contain the standard provision regarding Government Code Section 84308 (Senate Bill 1439) and the disclosure of campaign contributions to a member of the Board of Supervisors (Board) or other County elected officer.
• Under the County standard contract, the contractor states it has disclosed campaign contributions of more than $250 to any member of the Board or other County elected officer and completed a form providing additional information.
• Potential Impact: The County may have difficulty gathering information about campaign contributions made by OIA.
While these are notable exceptions to the County’s standard contract language, the Department recommends approval of the agreement with OIA, including non-standard terms, to ensure investigations are completed without delay. This item is being submitted to the Board for approval at the first available meeting upon completion of the required financial and legal review process, which was delayed due to the network connectivity disruption experienced by the Department in April 2023. County Counsel and Risk Management have provided input on the proposed agreement with OIA.
PROCUREMENT
OIA, as the developer of the AZtec software, holds proprietary rights for software maintenance and support services in the United States. The terms in the agreement, including non-standard terms, may be used to accompany future purchase orders issued to OIA, as necessary. The SEM, in combination with the AZtech software, are calibrated and validated to produce analysis reports that are admissible in a court of law as evidence. Using a different developer’s software for GSR analysis will require taking the SEM out of service to match it with the new software and go through a new calibration and validation process that would certify accuracy of results. Aside from the increase in operational costs and delay of the analysis of evidence for pending cases, the cost of redoing validations far exceeds the cost savings of switching vendors. Purchasing concurs that a non-competitive justification of single source exists as the only United States service provider for Aztec software.
County Policy 11-05 requires departments to obtain Board approval for the procurement of goods and services with non-standard terms and conditions.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Richard D. Luczak, Deputy County Counsel, 387-5455) on June 2, 2023; Purchasing (Michael Candelaria, Lead Buyer, 387-0321) on June 2, 2023; Risk Management (Victor Tordesillas, Director, 396-8621) on June 1, 2023; Finance (Erika Rodarte, Administrative Analyst, 387-4919) on June 8, 2023; and County Finance and Administration (Robert Saldana, Deputy Executive Officer, 387-5423) on June 11, 2023.