Prop. D calls for bidding city I.T. services

Why put computer services up for bid?

A year ago Sanders said he wanted to give Data Processing Corp. some competition to ensure taxpayers were getting the best service for the lowest possible price. The agency had faced little scrutiny over its costs and salaries during the previous three decades. The first portion of work — help desk and computer support — was outsourced in April when the City Council selected Gardena-based En Pointe Technologies for a $1.2 million price tag, roughly $1.1 million less than what the city had been paying Data Processing Corp. Despite losing the bid, Reed Vickerman, chair of Data Processing, said his company would continue to bid on future contracts.

Who can bid on the services?

Companies of all different sizes will compete for the remaining work. The initial plan was to break computer services into four or five chunks and let companies bid on them individually. But after the first round of bidding, the Mayor’s Office realized some companies may be able to save the city more money by bidding on most, if not all, of the services at once. The city is still open to breaking the computer services into different pieces, but it would also consider letting one company take a consolidated approach, said Jay Goldstone, the city’s chief operating officer. The remaining work includes phone and network services, servers and mainframes and program support. The city has hired Avasant Strategic Sourcing for $246,000 to assess DPC’s operations and develop options. A $377,000 expansion of that contract is expected to solicit bids, evaluate proposals and devise a transition plan.

How much could the city save through competitive bidding?

It’s uncertain how much the city can reduce the roughly $40 million it pays Data Processing. Goldstone has estimated zero to $5 million in annual savings, but he said he’s being conservative and it could be possible to save more depending on the bids received. He said he thinks 10 percent savings over current costs would be reasonable.

What is the next step?

The Mayor’s Office will present the findings from the Avasant study to the council’s rules committee on Nov. 17 then present it to the full council in December. The city could then request bids as early as late February. At that point, the city can mark it as a completed Proposition D condition. The goal is to have the new contracts, and the sales tax increase, go into effect when the next fiscal year begins July 1.


