REPORT TO COUNCIL
SUBJECT
Title
Approve the First Amendment to the Oracle Enterprise Resource Planning (ERP) Support and Testing Services Agreement with Novamodus, Inc. and Authorize the City Manager to Approve up to Three Additional One-Year Extensions, Subject to Budget Availability (F26-310)
Report
REPORT IN BRIEF
Staff requests approval of a First Amendment to the Oracle Enterprise Resource Planning (ERP) Support and Testing Services agreement with Novamodus, Inc. of Flower Mound, Texas to extend the agreement through March 31, 2027, and increase the not-to-exceed amount from $230,403 to $478,800.
EXISTING POLICY
Pursuant to Chapter 2.08 of the Sunnyvale Municipal Code, contracts for this type of service are awarded pursuant to a Request for Proposals (RFP) best value process, unless otherwise exempt from the competitive bidding process. Additionally, City Council approval is required for the procurement of goods and/or services exceeding $250,000 in any one transaction.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378(a) as it has no potential for resulting in either a direct physical change in the environment, or a reasonable foreseeable indirect physical change in the environment.
BACKGROUND AND DISCUSSION
On June 12, 2024, the City issued Request for Proposal (RFP) No. F24-170 for Oracle Enterprise Resource Planning (ERP) Support and Testing Services. The RFP requested vendors to provide annual pricing for a five-year period.
On July 16, 2024, the City received sixteen proposals. Following evaluation of the submitted proposals, the evaluation team determined that Novamodus, Inc. provided the best value to the City. On March 15, 2025, the city entered into an agreement with Novamodus, Inc. in the amount of $230,403 for the first year of Oracle ERP support and testing services.
The agreement included the option to extend the contract for up to four additional one-year terms. To maintain continuity of ERP support services beyond March 2026, staff recommends exercising the first of these annual extensions and increasing the not-to-exceed amount to $478,800.
The proposed amendment reflects the pricing structure established through the RFP process and incorporated into the original agreement. Because the amendment increases the contract amount above the City Council approval threshold, Council authorization is required.
Staff also recommends authorizing the City Manager to approve the remaining annual extensions, subject to budget availability and satisfactory vendor performance, as the pricing and scope for those extensions were established through the competitive procurement process.
FISCAL IMPACT
Budget for Oracle ERP support and testing services is currently available in Fund 7027 - Technology and Communications Service Fund, under Project 836730 - ERP Stabilization and Support. As the stabilization period for the ERP system comes to an end, this project will be discontinued and these services will be included in the operating budget under Program 15200 - Information Technology Services and Support in figure budget cycles. Information Technology services are funded through transfers from other funds via internal service charges.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the City Hall reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
RECOMMENDATION
Recommendation
Take the following actions:
- Approve the First Amendment to the Oracle ERP Support and Testing Services Agreement with Novamodus, Inc., in substantially the same form as Attachment 1 to the report, increasing the not-to-exceed contract amount from $230,403 to $478,800 and exercising the first of four optional one-year extensions through March 31, 2027;
- Authorize the City Manager to execute the amendment when all necessary conditions have been met; and
- Authorize the City Manager to approve up to three additional one-year extensions subject to budget availability and satisfactory performance.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $500 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
An “X” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
_X_ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract*
___ Labor or personal employment contract
___ Contract under $50,000 or non-fiscal
___ Contract between public agencies
___ General policy and legislative actions
* "Competitively bid" means a contract that must be awarded to the lowest responsive and responsible bidder.
Staff
Prepared by: David Battaglia, Purchasing Officer
Reviewed by: Kathleen Boutté Foster, Chief Information Officer
Reviewed by: Matthew Paulin, Director, Finance
Reviewed by: Connie Verceles, Deputy City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. First Amendment to Oracle ERP Support and Testing Services Agreement
2. Project 836730 ERP Stabilization and Support Budget Summary