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GOVERNMENT FINANCE OFFICERS ASSOCIATION (GFOA) 1B-2008
INSURANCE O~N FILE WORK MAY PROCEED UNTIL INSURANCE EXPIRES CLERK OF COUNCIL A-2008-038 baTE: APR 2 20Q$ SECOND AMENDMENT TO ~ ~ ~~~~ ~~ ~ ,~~ CONSULTING SERVICES AGREEMENT l~`\`''r' f ~ 1: THfS SECOND AMENDMENT TO AGREEMENT is entered into on March 3, 2008, by and between Government Finance Officers Association of the United States and Canada, an Illinois not-for-profit corporation ("GFOA") and the City of Santa Ana, a charter city and municipal corporation of the State of California ("City"). RECITALS: A. The parties entered into Agreement #A-2006-174, dated July 5, 2006, (hereinafter "said Agreement") by which GFOA has provided consulting and negotiation services in relation to City's procurement of a new enterprise system supporting the City's finance, human resources, payroll and utility billing functionalities. B. The City has approved the purchase of an enterprise system and desires GFOA's project management services for the installation and integration of the system Citywide. WHEREFORE, in consideration of the covenants contained in said Agreement, and subject to all the terms and conditions of said Agreement, except those amended in this Second Amendment to Agreement, the parties agree as follows: 1. Section III. A., SERVICES, shall be deleted in its entirety and replaced with the following: "A. General Scope: GFOA has provided System Selection and Contract Negotiating services as described in Exhibit A to said Agreement. GFOA shall provide Project Management services as requested by the City Project Manager, in relation to the implementation of the Lawson financial management system, as set forth in Exhibit A-1, attached hereto and incorporated by reference." 2. Section VII, COMPENSATION OF CONSULTANT, shall be deleted in its entirety and replaced with the following: "For those services associated with System Selection and Contract Negotiating, GFOA shall be paid as set forth in Exhibit A to said Agreement. The total amount to be provided for such services shall not exceed $94,500. For services associated with Project Management, including advisory and quality assurance services in the Lawson implementation, GFOA shall be paid on an hourly basis as set forth in Exhibit A-1. The total amount to be provided for such project management services shall not exceed $195,000. The total amount to be paid for all services provided by GFOA in relation to the selection and implementation of the financial services system, shall not exceed $289,500." 3. Anew paragraph, C, shall be added to Section IX, INDEMNIFICATION, LIMITATION ON LIABILITY, shall be added to read in full as follows: "The City recognizes that GFOA's role is to provide information, analysis and advisory services. As such, GFOA bears no responsibility for the performance of the software, hardware, or implementation service suppliers." 4. Except as hereinabove amended, all terms and conditions of said Agreement shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment to Agreement on the date and year first written above. ATTE PATRICIA E. HEALY Clerk of the Council CITY OF SANTA ANA ~ _ DAVID N. R City Manager APPROVED AS TO FORM: JOSEPH W.FLETCHER City Attorney sy: ~ " '~ : ~ ~_t Laura Shee y Assistant City Attorney GOVERNMENT FINANCE OFFIICERS ASSOCIATION I ` r ~ a~ e) (Title) EXHIBIT A-1 THE RESEARCH AND CONSULTING CENTER GOVERNMENT FINANCE OFFICERS ASSOCIATION February 2008 Note: This is a proposal developed by the GFOA Research and Consulting Center to the City of Santa Ana, CA. All information herein is confidential and proprietary to GFOA. Upon request by GFOA, all materials submitted as part of this proposal must be returned or destroyed. G~ THE RESEARCH AND CONSULTING CENTER GOVERNMENT FINANCE OFFICERS ASSOCIATION February 13, 2008 Ms. Pamela Arends-King Assistant Director of Finance and Management Services City of Santa Ana 20 Civic Center Plaza, 8`h Floor Santa Ana, CA 92701 Dear Ms. Arends-King: The Government Finance Officers Association (GFOA) is pleased to present our proposal to the City of Santa Ana for ERP Advisory Services as you implement the new Lawson software. GFOA has extensive experience in this area and believe we can bring real value and success to your project. Our consulting approach is tailored to fit the unique needs of the City. GFOA staff brings the expertise gained from our work with over 200 jurisdictions, including State, County, local governments, and special districts and combines this with a facilitative methodology that keeps the project on-track. We have prepared some financial estimates based on our initial discussions, but the total scope of the project will be modified to fit your requirements during each phase of the implementation. We very much look forward to the opportunity to work with you on this project. If there are any questions, please contact: Barry McMeekin, Consulting Practice Manager, at (312) 339-1510 or Nadeen Biddinger at (312) 498-3027 Sincerely, (/ Anne Spray Kinney Director, Research and Consulting Center Table of Contents Scope of Services ......................................................Section I Basic Qualifications & Experience ..................................Section II Pricing .................................. . .................................Section III I. Scope of Services Background GFOA has recently completed a project assisting the City of Santa Ana with the release of a Request For Proposal for an integrated ERP system. GFOA also provided the City with selection and contract negotiation services. The City has now requested that GFOA submit a proposal to provide advisory or quality assurance services during the implementation of the ERP Project. Selection of the implementation software and vendor is complete and the project is scheduled to kick off in March 2008 GFOA's expertise in the areas of municipal finance and government enterprise technology and our objectivity and familiarity with the City of Santa Ana make us uniquely qualified and capable of providing the requested oversight, which could include project management advisory services, issue resolution and review of project deliverables. GFOA will assure compliance with contractual requirements in a manner that meets the needs of the City and maximizes the potential for project success. Definition of Phase. This phase begins with the activities that surround implementation of the Lawson ERP software and ends with the completion of a post- implementation review. GFOA will provide quality review and assist the City's Project Manager with administering the implementation of the ERP solution. GFOA will provide independent oversight and quality assurance services for the duration of the project. Capabilities. A project oversight role with GFOA will enable the City to leverage the presence that GFOA has in the public sector technology industry and will provide the City access to our nationwide membership network. These factors enable our clients to extract a greater degree of cooperation and performance from software and implementation firms. The City has engaged Lawson to implement the ERP system, and they are also pursuing business across GFOA's client base and membership network. Consequently, no other organization can provide the type of service we are proposing and, at the same time, exercise the leverage that GFOA can bring. Few other firms, moreover, would be truly independent in project oversight because many of them are allies of or engage in business activities with ERP software and implementation firms, albeit in other areas. By contrast, GFOA has no ties to ERP software and services firms. Also GFOA has provided comparable services as those in this proposal at several projects with similar functional solutions utilizing similar implementation methodologies. In addition, since GFOA assisted the City in development of a detailed Statement of Work, we are uniquely qualified to ensure that the requirements and assumptions of the SOW remain on target and are subsequently delivered. Description of Tasks. Following are descriptions of the types of project advisory and quality review activities that we propose to perform as part of the engagement to ensure effective project execution: 1 • Work Plan Development, Analysis and Tracking. Development, analysis and tracking of the project work plan are key components of developing an effective project structure and project management. GFOA will review the proposed project plan that makes the most effective use of your organization's resources. Our prior experience will help you assess the logic and comprehensiveness of the plan as it is created, finalized, and maintained. Too often we have found project plans that have been developed without the customer in mind. For example, dependencies have not been outlined; insufficient review time has been allocated for deliverables; or not enough detail is provided in the plan. GFOA will work with your Project Manager and Technical Manager as well as the Lawson Project Manager to ensure an acceptable project plan. Once the base project plan is complete, GFOA will work with the Project Managers to identify key milestones where GFOA consultants will review activities completed to-date and review any potential project risks. We usually recommend reviewing activities at the beginning and end of the project preparation phase; the beginning, middle, and ending of the design phase; the beginning of the training phase; the beginning and ending of the test phase; the beginning of the deployment phase; and the beginning of the support phase. The GFOA's review process should then be added to the base project plan. Essentially, GFOA's role is to provide an "early warning mechanism," to your Project Manager at various points in the implementation process by carefully tracking the progress of activities within the project plan. 2. Implementation Plan Management. Development of a thorough implementation plan is an important component to the development of an effective project structure. Furthermore, throughout a complex enterprise system installation, implementation plans must be revised and appropriate controls must be present as part of effective project management to minimize deviations from the timeline and/or budget. GFOA can work with the Lawson and City project managers to monitor project status, resolve project scope and approach issues, and provide input on improving the logic of the overall plan. We would also keep the vendor on-track with the overall objectives of the organization as established in the contract agreements. 3. Review of Implementation Deliverables. Implementation vendors often require clients to "signoff 'before proceeding to the next step as part of project management. Our review of all project deliverables, if needed, will ensure contract compliance, verify that the deliverable is complete and consistent with the scope of work and functionality documented in the contract, includes acceptable content, and meets your organization's standards of quality. GFOA is able to provide you with analysis of information to increase your confidence in approving deliverables. 4. Business Process Design. Vendors typically prepare a "to-be" design document that outlines how the software will be configured to meet your organization's needs. The new designs often require changes in business processes that need to be documented sufficiently. This responsibility typically falls within project management. GFOA recommends that the design processes incorporate business process maps and descriptions of the new changes. This ensures that the logic of the design has been reviewed appropriately. To augment the implementation process, GFOA also recommends that test scripts and functional/technical requirements be mapped to each step on the business process map. That way, the appropriate test scripts can be applied to any future process changes. GFOA consultants would be working with the Project Managers to achieve this process. 5. Interface/Customization Identification Assistance. Although GFOA strives to ensure most interfaces be identified before the contract signing, it is almost inevitable that a few customizations or interfaces will be required during implementation. As part of the contract negotiations process, GFOA documented a process for identifying, assessing, and implementing unidentified interfaces and customizations that may be required. This process was included in the implementation services contract or the statement of work. As part of our project advisory services, GFOA consultants will rely on this process to assess any customizations and new interfaces. Our task in this process would assist your Project Managers with determining whether or not an interface or customization is warranted; assist your Project Managers in ensuring that the proper procedures are being followed (e.g., update business designs; develop/review functional and technical specifications, update test scripts, and user acceptance). 6. Testing and Training Support. Lawson should provide a testing and training strategy as part of their overall implementation methodology. GFOA consultants, if needed, will assist the implementer and City project managers in assessing the testing plans (e.g., unit, integration, user acceptance, etc.), test scripts and required resources to complete testing within the required timeframes. GFOA consultants will also assist the project managers in assessing the "Super User" training and end-user training strategies. As part of this assessment, GFOA consultants will assist in the review of training documents and will work with project managers to identify which personnel should attend the different types of training classes. 7. Issue Resolution. As a major source of recommended practices in governmental accounting and budgeting, GFOA will serve as a mechanism for issue resolution. Too often implementation vendors and government staff have difficulty sorting out the wisdom of process changes which adds unnecessary delays to the implementation timeline and raises project costs. If the functionality of the software is to be maximized, issues must be resolved on a timely basis. Our network of finance officers is a unique resource for validating leading-edge business practices. GFOA would be available to provide an independent source of advice to facilitate prompt issue resolution. 8. Post Project Review. Certain tasks will be repeated when upgrades/patches are applied or when a major system upgrade is required. To prepare for these events, GFOA Consultants will work with the Project Managers to conduct a "Lessons Learned" meeting upon completion of the project. Our consultants will document the results of the meeting and submit them to your Project Managers. (Please note: GFOA recommends that some "Lessons Learned" meetings take place during implementation. For example, a "lessons learned" meeting conducted immediately after the completion of the earliest test scripts may facilitate the completion of the overall testing process.) GFOA will also conduct a post go live review of the system that compares production business processes to the system configuration documents and analyzes whether the system requirements have been addressed in full. 9. Other Implementation Services. Periodically, GFOA is asked to provide other types of services to clients during implementation. Some of these services have included augmenting client resources for budget design and chart of account design, project management assistance, and participating in Steering Committee meetings to provide independent analysis of issues. These services are typically provided on a time and materials basis or through a bucket of hours. Deliverables: Project Management Advisory Services Points of Staff Input and Review. GFOA staff will maintain regular and frequent communication with City staff throughout the management of the implementation project. GFOA staff will conduct reviews of the following documents, if needed, or bring staff on-site if requested. 1. Work Plan Development 2. Finalization of ERP Design 3. Finalization of Testing Plan 4. Post Project Review City staff will be provided with an opportunity to raise issues or ask questions during regularly scheduled project update conference calls and GFOA staff will respond quickly to any questions or issues that arise outside of the regular meeting schedule. As we have discussed previously, under the proposed arrangement, utilization of GFOA services will be at the sole discretion of the City and its project manager. We believe that we can add value to the City project in any of the above tasks regardless of the final mixture. We would however expect to work with the City to develop scheduled tasks that allow the GFOA to maintain continuity and consistency throughout the project. Timeframe. This phase will begin once the Lawson ERP project begins and is tentatively scheduled to last fourteen months and end after the implementation of the Financials, Procurement and enQuesta about March 31, 2009. II. Basic Qualifications & Experience GFOA's years of research and consulting experience (helping over 100 clients implement ERP systems) and close contact with our membership network has enabled us to develop an approach and methodology that streamlines the technology planning and procurement process and improves cost effectiveness. Through our work with city and county governments, school districts, and other public sector entities, we are familiar with nearly every software system available. GFOA conducts reference checks and research on public sector software and implementation firms and utilizes this knowledge to benefit member clients. Further, GFOA staff attends the public sector user conferences of all of the major software vendors to stay abreast on product enhancements. Unlike many for profit technology advisory firms, GFOA focuses exclusively on public sector clients. We have developed a library of best practices, RFP's, and software contracts from jurisdictions that enhance our advisory capability. And, based on our extensive experience assisting public sector entities procure, implement and utilize new systems, GFOA knows what constitutes a fair price for software and implementation services as well as understands the trade- offs between forcing lower prices and the quality of the implementation. The team proposed has extensive experience in managing municipal ERP implementation projects. Team members have conducted research related to enterprise resource planning systems, written extensively on the subject for national journals and periodicals, and provided consulting to over 50 cities and counties across the nation and Canada. The combination of research and hands-on consulting translates into savings for our clients because we have developed a knowledge base to improve the effectiveness of system procurement decisions. Our team has significant experience in conducting needs assessments, developing business requirements, facilitating procurement of enterprise systems for some of the largest (Chicago IL; Cook City IL; Los Angeles City CA) and smallest (Redlands CA; Columbia SC; Summit City CO) public sector organizations in the United States and completing a variety of management consulting initiatives. Barry McMeekin, Consulting Practice Manager, would serve as Engagement Manager, Nadeen Biddinger, Senior Manager, would be the Project Manager and John Ruggini, Senior Consultant, would provide Quality Assurance. We believe that GFOA's resources and highly qualified professionals represent the most comprehensive knowledge and experience for this type of work in the public sector. A summary of the experience for each of the proposed project team members follows. III. Pricing A. Project Budget The time and cost related to project management advisory services vary considerably based upon a variety of factors that cannot be accurately predicted in advance. As a result, GFOA is proposing to bill the City on an hourly basis for work actually performed. Because of strong project management strengths in the City, it is difficult for GFOA to prepare an estimate of the costs involved. At the City's request GFOA estimated a maximum of two full days on-site each week during the fourteen-month engagement. Often times this much on-site may not be required, and the City would only be invoiced for actual costs. When work is done off-site the costs would be less as described below. The maximum cost of on-site work each week (a Monday and Tuesday, or a Tuesday and Wednesday) would be $195,000. Payment and Contractual Terms. GFOA will invoice the City on a monthly basis. The City will be billed an hourly rate of $185 per hour plus a $40 per hour travel loading rate for all work effort incurred on-site. ASSUMPTIONS AND TIMELINE Engagement Assumptions General Assumptions The proposal assumes that the contract will be completed within the timeframe of the implementation schedule accepted as part of the implementation services vendor agreement. Your organization's staff will be reasonably available for interviews and will participate in the project as agreed upon and appropriate. Your organization agrees not to cancel meetings once established (which would raise our travel costs). GFOA's liability and indemnification under any agreement reached with your organization will be limited to the extent of fees paid by insurance coverage currently in force. This limitation applies to all exposures under this engagement. The contract with your organization must also include the following language in the same section as the limitation on liability: "The City recognizes that GFOA's role is to provide information, analysis and advisory services. As such, GFOA bears no responsibility for the performance of the software, hardware, or implementation service suppliers." ~ GFOA assumes that workdays will incur at 8 hours of billable time per day when on-site. However, we will work to fit your work schedule, and will only bill for the hours worked, both on and off site, during this engagement. GFOA will be provided access to the ERP implementation effort in a remote fashion, including the project team network. This access will be the same as that afforded to the implementation team on-site. It will also include access to the proprietary tools used by the project team members for implementation of the ERP application. GFOA will participate in Steering Committee meetings if site work is coincident with meeting times. When performing work on-site, GFOA staff will be provided appropriate office workspace and access to copiers, printers, fax machines, and miscellaneous office supplies. A R~ CERTIFICATE OF LIABILITY INSURANCE o8io4iio s' PRODUCER g15-459-3300 FAX 815-459-3360 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION LTD MARKET FINANCIAL GROUP ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE , HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR 240 COMMERCE DRIVE ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. CRYSTAL LAKE, IL 60014 INSURERS AFFORDING COVERAGE NAIC # INSURED INSURER A: The Hartford Insurance Co. Government Finance Officers Association INSURER 6: Landmark American Insurance Co. 203 N . La5a11 e, Suite 2700 INSURER C: Chicago, IL 60601 INSURER D: ~q/ A ~OCOV 7 "~QO . `~~ ~ l rf ~UG~ 'U-3.j INSURER E. nwcn w ncc• vv v u~r+v a.v THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR ANY REQUIREMENT , MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR DD' TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE POLICY EXPIRATION LIMITS GENERAL LIABILITY 83UUNRY2296 O8/O1/2008 O8/O1/2009 EACH OCCURRENCE $ 1, OOO, QOO X COMMERCIAL GENERAL LIABILITY DAMAGE TO RENTED $ 3OO , OOO CLAIMS MADE ~ OCCUR MED EXP (Any one person) $ lO , OOO A PERSONAL & ADV INJURY $ 1 , OOO, OOO X Contractual Liab. GENERALAGGREGA~E $ 2,000,000 GEN'L AGGREGATE LIMIT APPLIES PER: PRODUCTS -COMP/OP AGG $ 2 ~ QOO ~ OQO POLICY PRO- LOC JECT AUT OMOBILE LIABILITY 83UUNRY2296 O8/O1/2008 O8/O 1/2009 COMBINED SINGLE LIMIT $ X ANY AUTO (Ea accident) 1 , OOO , OOO ALL OWNED AUTOS BODILY INJURY $ SCHEDULED AUTOS (Per person) A X HIRED AUTOS BODILY INJURY $ X NON-OWNED AUTOS (Per accident) PROPERTY DAMAGE $ (Per accident) GARAGE LIABILITY AUTO ONLY - EA ACCIDENT $ ANY AUTO OTHER THAN EA ACC $ AUTO ONLY: AGG $ EXCESS/UMBRELLA LIABILITY EACH OCCURRENCE $ 5 , OOO , OOO X OCCUR ^CLAIMSMADE 83XHURY2231 O8/O1/2008 O8/O1/2009 AGGREGATE $ S,000,OOO A $ DEDUCTIBLE $ X RETENTION $ lO,OO $ WORKERS COMPENSATION AND 83WECKD4442 O8/O4/2008 08/04/2009 X WC STATU- OTH- EMPLOYERS' LIABILITY E.L. EACH ACCIDENT $ 1 , OOO , OOO A ANY PROPRIETOR/PARTNER/EXECUTIVE OFFICER/MEh7°EP, EXCLUDED^ E.L. DISEASE - EA EMPLOYE ~ $ 1 , OOO, OOO If yes describe under SPECIAL PROVISIONS below E.L. DISEASE -POLICY LIMIT $ 1 , OOO, OOO orH bili l i ~ LHR710886 09/19/2008 09/19/2009 $3,000,000 Limit of Liability ty essiona L a ro B $10,000 Deductible -Project Consulting 8A DESCRIPTION OF OPERATIONS !LOCATIONS / VEHICLES I EXCLUSIONS Ap OBY`, DORSEMENT I SPECIAL PROVISIONS dditional Insured: City of Santa Ana,. Ca~ifor~ ia, its officers, employees, agents, volunteers and epresentatives. L-- '.rnr~c~nwTC un~ noo CAAIRFI I ATI(1N v~~~ ~ ~ -___ - _ SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE ~~ ^(An(L!E EXPIRATION DATE THEREOF, THE ISSUING INSURER WILL CX MAIL Cl ty of Santa Ana, California 3O DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, Attn : Teresa Ramirez ~ G ~~~~~ D1JfdQ~K1 must be endorsed. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). DISCLAIMER The Certificate of Insurance on the reverse side of this form does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend, extend or alter the coverage afforded by the policies listed thereon. ~~ ; >~-~ v -~. ^.r ~o ACORD 25 (2001/08) page 2 of 2 INS025 ~oios~.oaa