TRANSMITTAL LETTER FOR BOARD MEETING JANUARY 5, 2012
COMMITTEE ON PROCUREMENT
Mr. David St. Pierre, Executive Director
Title
Authorization to amend Board Order of September 1, 2011, regarding Furnish and Deliver Cisco Maintenance to the Main Office Complex, in an amount not to exceed $434,059.86, Account 101-27000-612840, Requisition 1327381, Agenda Item No. 78, File No. 11-1097
Body
Dear Sir:
At the board meeting of September 1, 2011, the Board of Commissioners duly authorized the above stated action, Agenda Item No. 78, File No. 11-1097.
The dollar value of the award should have been $392,392.85 due to the service contract as explained below. System Solutions Inc. (“SSI”) is the authorized sole source reseller and provider of Cisco Maintenance services and products. SSI is a registered Premier Certified Cisco Partner that also has Cisco Capital financing authorizations. SSI is the entity that serves as the conduit for contract performance. Normally, the District would be required to pay the entire value of the contract amount to SSI in advance, in spite of the fact that the services will be rendered over a period of three years because Cisco does not carry tax exempt public financing on its balance sheet. Cisco has advised that it intends to assign the contract to Key Government Finance, Inc. (KGF”). Due to the nature of the relationship between these three companies, the District has the option to take advantage of real economic benefits and finance this transaction over the three years, at no additional cost to the District. KGF and Cisco have worked together for nearly 10 years to offer Public Sector Financing across the country to all Cisco customers. Last year, KGF financed over $450 million with Cisco’s customers. Under this arrangement, KGF will advance the funds on behalf of the District, make the appropriate upfront payments to SSI and Cisco, while the District will make multi-year installment payments over the life of the contract at no interest to KGF, in accordance with the terms and conditions of a mandatory Payment Plan Agreement.
All other information provided in the transmittal is correct.
Therefore, it is requested that the aforesaid Board order of September 1, 2011 be amended to effect the changes set forth above, otherwise to remain in force and effect as heretofore enacted.
Requested, Keith D. Smith, Director of Information Technology, KS:klv
Recommended, Darlene A. LoCascio, Director of Procurement and Materials Management
Respectfully Submitted, Barbara J. McGowan, Chairman Committee on Procurement
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for January 5, 2012