HomeMy WebLinkAboutAgenda 01-17-23; 8-i - Microsoft Office 365 Contract and Approval of Budget Amendment #5-B 1
ORD-2023-005
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: January 17, 2023
Action Agenda
Item No. 8-i
SUBJECT: Microsoft Office 365 Contract and Approval of Budget Amendment #5-B
DEPARTMENT: Information Technologies (IT)
ATTACHMENT(S): INFORMATION CONTACT:
Jim Northrup, Chief Information Officer,
1. Year-to-Date Budget Summary 919.245.2276
Kirk Vaughn, Budget Director,
919.245.2153
PURPOSE: To:
• Approve the purchase of Microsoft Office 365 subscription licenses from Software House
International Corp., for $403,195.97 paid annually (NC State Contract #208C) using the
County Attorney's contract template;
• Approve the associated Microsoft Volume Licensing Enrollment Agreement which was
originated by the vendor and is in line with industry standards while meeting policy
requirements and legal sufficiency; and
• approve Budget Amendment #5-B.
BACKGROUND: Orange County computer users utilize Microsoft Office products to aid them
with productivity. The current version of Office installed on the majority of computers is over seven
years old and will necessitate an upgrade in FY 2023-24.
Since spring 2022, Orange County IT has been conferring with Microsoft and its partners to
undertake a license audit to ensure that the County was meeting compliance standards, i.e., the
County was not utilizing any software not appropriately purchased. Upon completion of the audit,
it was determined the current license compliance model falls outside of Microsoft standards for
Exchange Email and Office. Through an oversight, new Office versions were installed on
replacement computers rather than transferring the existing older licenses to the new computers.
A similar process took place when upgrading Exchange to a different version. The server license
was paid for, but the licenses that allow employees to connect were overlooked.
After meeting with Microsoft regularly, all parties informally agreed to try to coincide bringing
County software into compliance with the FY 2023-24 Budget cycle as a satisfactory remedy.
Recently, however, Microsoft determined that the County needed to meet compliance standards
immediately, resulting in the need for the current Board consideration.
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The current version of Office installed on the majority of computers is over seven years old and
will necessitate an upgrade in FY 2023-24 regardless of compliance status. The County
traditionally has purchased individual perpetual Office licenses, i.e., employees can use the
version purchased in perpetuity and where the support model degrades over time.
The proposed Microsoft Office 365 model keeps all licensing and software versions in use up to
date and in compliance with an annual subscription. Microsoft Office 365 is an evergreen cloud-
based productivity suite. This subscription model includes version upgrades as they become
available, as well as a host of other features not offered in the perpetual model. The proposed
cost for the proposed model is $403,195.97.
The past three years have seen a dramatic change in the way employees try to leverage use of
the older software model. Remote meetings and cloud-based document sharing have moved into
the necessary category once occupied solely by webmail. This represents a dramatic shift in the
way Orange County employees collaborate and interact with data. The use model in place today
seems to be growing in an upward trajectory and current licensing model cannot keep up.
Microsoft tools for business intelligence have been bolted on to the existing system in order create
a robust collaborative space for leaders and staff to look at complex datasets to model and
illustrate business outcomes. The Microsoft Office 365 proposal natively integrates many of these
somewhat disparate systems. Employees continue to ask for new ways to do business and
Microsoft Office 365 meets many of those needs and scales well into the future, more so than the
perpetual model that has been in place since 2006.
The associated Microsoft Volume Licensing Enrollment Agreement was originated by the vendor
in line with industry standards while also meeting policy requirements and legal sufficiency.
The implementation costs for Office 365 are recommended to be funded with approval of Budget
Amendment #5-B, which will utilize $403,195.97 of the County Capital Reserve Fund authorized
in Budget Amendment #5-A (a separate item on this January 17, 2023 meeting agenda), and
would transfer those funds to the County Capital Fund. This will amend the following Capital
Ordinance:
iT Capital Fund($403,196) - Project# 30007
Revenues for this project:
Current FY 2022-23 FY 2022-23
FY 2022-23 Amendment Revised
Grant Funding $37,343 $37,343
Financing Proceeds $14,195,923 $14,195,923
Appropriated Fund Balance $200,000 $200,000
Transfer from General Fund $2,822,135 $403,196 $3,225,331
Total Project Funding $17,255,401 $403,196 $17,658,597
Appropriated for this project:
Current FY 2022-23 FY 2022-23
FY 2022-23 Amendment Revised
IT Capital Project Expenditures $17,255,401 $403,196 $17,658,597
Total Costs $17,255,401 $403,196 $17,658,597
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FINANCIAL IMPACT: The subscription amount is $403,195.97, paid annually each year for three
years.
As an annual subscription, this agreement may have incremental increases and will be funded in
the General Fund in future fiscal years. The approval of Budget Amendment #5-B increases the
County Capital Fund by $403,196.
SOCIAL JUSTICE IMPACT: There are no Orange County Social Justice Goals specifically
applicable to this item: However, while a simple software purchase agreement may not seem to
impact Social Justice, this software is essential to the smooth running of government and like
many infrastructure items is a foundational element to ensure all Board Goals and Priorities are
pursued.
ENVIRONMENTAL IMPACT: There are no Orange County Environmental Responsibility Goal
impacts associated with this item. The new software does create a more efficient workplace.
RECOMMENDATION(S): The Manager recommends that the Board approve this purchase,
authorize the Manager to execute all necessary contracts/agreements as well as any future
amendments, and approve Budget Amendment #5-B.
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Year-To-Date Budget Summary
Fiscal Year 2022-23
Fund Budget Summary County
Capital
Original Budget Revenue $10,612,009
Interfund Transfer Revenue
Fund Balance Appropiation
Total Original Budget $10,612,009
Additional Revenue Received Through
Budget Amendment#5-B (January 17, 2023)
Grant Funds $336,177
Non Grant Funds $296,098
Additional Interfund Transfer Revenue $518,676
Additional Fund Balance Appropriation
Total Amended Budget $11,762,960
Dollar Change in 2022-23 Approved Budget $1,150,951
% Change in 2022-23 Approved Budget 10.85%
Authorized Full Time Equivalent Positions
Original Approved Full Time Equivalent Positions
(includes Permanent and Time Limited) 0.000
Changes to Full Time Equivalent Positions
Amended Approved General Fund Full Time
Equivalent Positions 0.000
Total Approved Full-Time-Equivalent Positions
for Fiscal Year 2022-23 0.000