form gen. 160 (rev. 6-80) city of los...

FORM GEN. 160 (REV. 6-80)

CITY OF LOS ANGELESINTER-DEPARTMENTAL CORRESPONDENCE

DATE: July 25,2011

Honorable Members of the los n eles ~

Antonio R Villaraigosa, Mayo '-P-Wendy J. Greuel, City Controller .J) hRandi Levin, General Manager/Chie echnology Officer ~~'Information Technology Agency ~ \' I

Miguel A. Santana. City Administrative ~r ',--a . C.~Gerry F. Miller, Chief Legislative AnalysvrSTATUS REPORT ON THE SUPPLY MANAGEMENT SYSTEMINTEGRATION AND IMPLEMENTATION OF THE FINANCIALMANAGEMENT SYSTEM PROJECT AND REQUEST TO TRANSFERFUNDS

TO:

FROM:

SUBJECT:

SUMMARY

On November 3,2010, the City Council took several actions to support the developmentof the interface between the new Financial Management System (FMS) and the SupplyManagement System (SMS) (C.F. 09-2729). The actions included the appropriation of$1.7 million, the authorization of a position in the General Services Department, and theauthority to execute several contracts. The Council also requested that the ProjectOversight Committee (POC) report back on the status of the FMS project and on thedevelopment of the interface between FMS and SMS, and to suggest a plan for thelong-term management of SMS.

In addition to providing the information requested by the City Council, the POC is alsorequesting the authority to execute Amendment No. 5 to the contract with CGITechnologies and Solutions, Inc., (CGI) to augment the planned post-implementationsupport provided by CGI for FMS and to transfer funds approved in the 2011-12 Budgetfor the FMS Project to the departments that will conduct the required work.

FMS Project Status Update

The City Council requested the POC to report back with a life-of-project status of FMS,including current and projected expenditures, funding, and timeline. On June 2, 2011,the POC assessed the project's readiness and officially approved moving forward withthe go-live. At this time, the POC is pleased to report that the FMS project met its targetgo-live date of July 5, 2011 and made the new FMS system available to more than1,200 users Citywide, as planned.

Los Angeles City CouncilJuly 25,2011

Over the past two and a half years, the project team completed many tasks to replacethe aging FMIS system with the new FMS system as the City's financial system ofrecord. These tasks included:

e Designing and developing more than 20 software customizations and setting upthe baseline software to provide functionalities, including but not limited to thefollowing areas:

o Budget controls and online, downloadable data to facilitate theenforcement of spending limits by appropriation and service contract;

o Electronic Funds Transfer (EFT) capabilities to extend payment optionsand efficiencies to external vendors;

o Online electronic approvals to reduce paper and expedite authority foraction;

o Automated entry and linkages across Work Orders and Projects tofacilitate Citywide reporting; and

o Enhanced capabilities for departments using FMS as their AccountsReceivable system, such as tax intercept, lockbox processing, progressivefinance charges, and the generation of delinquent notices on City Attorneyletterhead.

• Upgrading technology to software versions and technology platforms supportedby CGI and other third party vendors

G Developing and testing 84 interface files with 24 City departmentsG Converting 1.4 million records to transfer chart of accounts and open balances

from FMIS to FMS (including $723 million of open FMIS encumbrances)• Developing and testing more than 90 standard reports and formsIII Conducting extensive department outreach via multiple communication channels,

such as: monthly ePostcards, liaison meetings, and Department Readinesschecklists

If/J Setting up hundreds of security roles and workflow rules to provide theappropriate access to end users and facilitate electronic approvals

*' Training more than 1,200 end users, which entailed delivery of more than 250courses for a total of 5,551 training seats.

The City will inevitably face challenges as we transition to the new system, especiallygiven the new data entry requirements intended to provide the City with moreinformation (e.g., Cost Accounting). In preparation, the team has established a post-implementation FMS Support Desk. This function will be supported by FMS staffdedicated to providing hands-on assistance and issue resolution services to thedepartments, in areas including, but not limited to: data entry, data clean-up, reportscreation, and transaction approval.

FMS Expenditures (Attachment 2 - FMS Four-Year Project Cost Summary).

As of March 31, 2011, the actual expenditures for the FMS project totaled $38.1 million.It is projected that additional expenditures totaling $14.0 million will be required from

Los Angeles City CouncilJuly 25, 2011

March 31, 2011 until June 30, 2012 for a cumulative expenditure total of $52.1 millionas illustrated in Attachment 2. This matches the total four-year approved appropriationlevel and $9,753,203 is available in the 2011-12 Budget to pay for all remaininganticipated expenditures. The approved appropriation level of $52.1 million exceeds theoriginal 2008-09 cost estimate for this project of $51.5 million by $0.6 million. Thisvariance is primarily attributed to the support services, software license, and softwaremaintenance costs that are needed as a result of the approved one-year delay of theimplementation date from July 2010 to July 2011 (C.F. 09-2729)

FMS FY 2011-12 Adopted Budget - GCP Fund Transfer

The 2011-12 Adopted Budget includes $9,753,203 in the General City Purposes (GCP)Fund (Line No. 25). Those funds will be needed to manage FMS during 2011-12, and itis recommended that the City Council transfer the funds to the various departments asindicated in the chart below.

Account ITA Controller CAO GSD TOTAL

1010 - Salaries $1,079,241 $2,013,394 $114,176 $0 $3,206,811General1090- Overtime $43,152 $15,000 $0 $0 $58,1522120 - Printing and $20,000 $0 $0 $0 $20,000Binding3040 - Contractual $5,600,840 $0 $0 $0 $5,600,840Services3040 - Contractual $400,000 $0 $0 $0 $400,000Services, Contingency3040 - Contractual $99,200 $99,200Services, CARR601°- Office & Adm $20,000 $0 $0 $0 $20,0007300 - Equipment $150,000 $0 $0 $0 $150,000Lease - GSD #6030 .$.Q iQ ~ ~198,202 ~198,202TOTAL $7,412A33 $2,028,394 $114,176 $198,202 $9,753,205

The Salaries General funding of $3,206,811 will be used for the 35 City positions thatwill be dedicated to maintaining and administering FMS during 2011-12. The positionsand funding are divided as follows: The Office of the Controller requires $2,013,394 for19 positions; ITA requires $1,079,241 for 11 positions; and, the Office of the CityAdministrative Officer requires $114,176 for one position. Staff will providemaintenance, support, and training, and address unanticipated problems that arisefollowing implementation. While the activity level is expected to remain high during thisfirst year of implementation, the number of positions funded is lower than it had beenduring implementation. Most recently, the 2010-11 Budget funded 40 positionauthorities for FMS development.

Los Angeles City CouncirJuly 25, 2011

The total proposed funding for Contractual Services is $6,100,040. This includes$4,095,692 for CGI to both complete the deliverables included in the original contractand to provide additional staff support, as proposed in this report In addition,$1,148,436 is required for hardware and software maintenance and equipment leases.Funding totaling $281,599 will be used for contract programmers to provide additionaltechnical support. Funding totaling $75,113 is included for the completion of qualityassurance work on FMS. Funding totaling $99,200 is for support of the development ofthe Citywide Accounts Receivable Reporting (CARR) System, which is scheduled forcompletion at the end of 2011. Finally, $400,000 is currently undesignated and will beavailable as a contingency for unanticipated fixes and enhancements.

A total of $58,152 is proposed for overtime, comprised of $43,152 for ITA and $15,000for the Controller. A total of $20,000 in the Office and Administrative Expense Accountwill cover office expenses for both the ITA and Controller staff working on the FMSProject. Printing and Binding funding of $20,000 will be used for training materials.Funding totaling $198,202 is included in the Leasing Account for the final three monthsof the lease at the Garland building. All FMS Project staff will be relocated to City HallEast by September 30, 2011. Finally, $150,000 is proposed for hardware backup anddata recovery to ensure necessary system and data availability.

CGI Contract Amendment No.5

There is a need to execute Amendment NO.5 (Attachment 3) to Contract No. 114340between the City and CGI for the development of FMS. The City Council's approval ofthe resources for the development of the interface between FMS and SMS includedwide discretion as to the specific contractors used for this work. Initially, ITA amendedthe contract with CGI for a portion of this work, but shortly thereafter identified a morecost-effective approach. Since CGI did not finish the work included in the initialamendment, Amendment No. 5 will revise the contract deliverables related to theinterface and to reduce the amount by $196,522 for work not performed.

In addition, it is necessary to increase the amount of CGI support of FMS in the first sixmonths of 2011-12 from six to seven employees. The additional resource will providelead support for fixes and enhancements that are likely to be required afterimplementation at a cost of $134,400.

Consequently, the amendment would both reduce the level of support provided for thedevelopment of the interface between FMS and 8MS, and increase the quantity of post-implementation support. Between these two changes, the contract limit will be reducedby a net of $71,925 from $19,690,820 to $19,618,895. It is recommended that the CityCouncil authorize the execution of this amendment.

Los Angeles City CouncilJuly 25,2011

SMS Update

The Council requested an update of 3M3, including the personnel and contractingactions taken to date, the status of the actions taken to correct deficits in 8M3, thestatus of the system integration, and a plan for cost effective management of 8M8 intothe future.

As stated above, in November 2010 the Mayor and City Council appropriated$1,721,760 for the development of the interface between 3MS and FMS. Those fundshave been used for the following purposes:

@ Contract Amendments ($1,513,260)

o ITA executed Contract Amendment NO.7 to Contract No. C-111284 withMetaformers, lnc., in the amount of $615,000, for additional analysis, codingand testing of changes to 8M3, as required by FM3 (CF 09-2729). Thisamendment extended the work term of the contract Programmers I Analystswho were previously providing conversion support for at least one month afterFM3 implementation.

o ITA executed Contract Amendment NO.4 to Contract No. C-114340 with CGI,in the amount of $262,440, for additional 8M8 application and testing support(CF 09-2729-81). As noted above, after a short time, this work wasreassigned to a different contractor. Accordingly, total payment to CGI for thisdeliverable was reduced to $55,675.

o ITA used the City's existing IT Programming contracts to recruit and hire fouradditional People'Soft programmers and functional analysts by January 31,2011 to complete necessary software coding, integration testing, systemreconciliation and user acceptance testing. It is projected that thesetemporary resources will be required for at least one month after the FM8implementation for post-implementation 8MS support, with a total cost of$770,000. Additionally, $72,585 is identified and reserved as projectcontingency funds to pay for any additional SM8 work necessary after FMSgo-live.

• City Staffing ($208,500)

o The General 8ervices Department (GSO) hired one retired Fiscal SystemsSpecialist (FS8) II on a gO-day authority, at a cost of $42,000, who has beenassisting with the testing of the interface and troubleshooting data conversionissues as well as assisting in the daily reconciliation of accounts andtransactions between the two systems.

Los Anqeles City CouncilJuly 25,2011

o The Controller's Office loaned one FSS position to GSD through April 25,2011 to support the development of the interface between FMS and SMS.GSD subsequently hired the incumbent.

o The Controller's Office hired three retired employees for consecutive 90 dayperiods, at cost of $112,500, to perform the function that would normally beperformed by the Fiscal Systems Specialist on loan to GSD.

o On April 25, 2011, GSD filled a FSS position previously approved by the CityCouncil to test the interface between FMS and SMS, assist with theconversion of data, and be trained to take over the day-to-day oversightfunction on a go-forward basis. GSD used $54,000 to fund this position. Thisposition was also approved as part of the GSD 2011-12 Adopted Budget.

Due to the addition of these resources, the expanded interface team was able to resolvemany issues and deficiencies that would otherwise result in serious discrepanciesbetween FMS and SMS, including:

G With assistance from the non-proprietary City departments that use SMS, purchaseorders which were created by end users prior to June 30, 2008 were reviewed andappropriate action was taken to finalize the majority of these orders and release theremaining encumbrances. GSD has worked closely with departments to close morethan 5,300 prior year purchase orders, which released more than $8.3 million inencumbrances. Working with the Controller's Office, the SMS staff developed asystematic approach for closing the approximately 2,500 prior year purchase ordersremaining in SMS.

!It GSD was able to reconcile transactions between SMS and FMS by comparing thedocuments created by or on the behalf of all City departments in SMS (such aspayment vouchers, purchase orders and inventory issues) against the balancesheets in FMS to ensure that the integrity of the data exchanged between bothsystems is in sync.

e The SMS team prepared for the implementation of FMS by cleaning and convertingdata. Despite these efforts, it is anticipated a small portion of the 8MS records willnot be in a state that can be included in the conversion programs. GSD and ITAhave developed a process for excluding these documents and converting themshortly after the FMS implementation.

!It System-wide modifications were performed on all modules of 8MS (such asPurchasing, Inventory, Accounts Payables and General Ledger) to introduce theCity's new Chart of Account requirements. Four existing inbound interfaces betweenFMS and SMS were modified and three existing outbound interfaces were fullyrevamped to include the new FMS requirements. Additionally, new interfaces werecreated for vendor business tax registration verification.


@ The 3M3 team developed a conversion program based on rules designed andprovided by the FMS team that converted the Chart of Account string for openencumbrances as required by FMS. Similar to the FM3 conversion effort, the SMSconversion effort was a complex and iterative effort. The team is aiming tosuccessfully convert all SMS documents.

A portion of the $1,721,760 funding will continue to be used in FY2011-12 to resolveSMS problems and deficiencies which are related to software defects associated withthe City's current version of the PeopleSoft application. Resolutions or fixes for mostsoftware defects are usually developed by Oracle and are grouped into "bundles" ofcode available to be implemented by the SM3 staff. Implementing PeopleSoft bundleswill require significant development and testing and is considered a major project whichcould take up to several months. In order to avoid further delays to the FMS project'stirneline, implementation of the current PeopleSoft bundles has been postponed to afterthe July 5, 2011 FM8 Go-Live date. Although some PeopleSoft software defects andbugs continue to exist, in-house fixes were developed and implemented for thosePeopte'Soft defects identified to have negative impact to the FMS project. These issuesare not new and the resolutions are being postponed to post-go-live. It is expected that8M8 would reach a stable state in Fall 2011. At that point, the 3M8 team will assessany additional changes/upgrades, including the implementation of the PeopleSottbundles.

Future of SMS

The City Council requested a plan for cost effective management of SM8 into the future.With resources focused on the implementation of FM8 and the development of theinterface between 8MS and FM8, that plan is not yet available. Given the difficulty andcost involved in integrating these two systems, it is now appropriate to evaluate whethera separate SM8 is the most cost effective procurement system, or whether a differentsystem or an integrated system should be considered. This evaluation will beundertaken by the City's Information Technology Oversight Committee (ITOC),consisting of the Mayor's Office, the City Administrative Officer (GAO), the ChiefLegislative Analyst (CLA), in collaboration with the POC and the impacted Citydepartments.

The development of a plan is required because the difficulty of supporting andmanaging the 8MS People-Soft system increases annually due to several factors:

'ill The 8MS City staffing and annual funding levels continue to decline.III The City is not able to hire and retain qualified support staff in ITA and GSD... For the past decade, the City has depended on consultants and contractors to "keep

the lights on" and implement mandated work, including the FMS upgrade andconversion.


• The team is unable to take on projects to add new functionality, (such as bar codingand further use of spend management tools such as eProcurement and strategicsourcing) or to respond to audit recommendations.

G The effort to keep the PeopleSoft application at the latest and most current softwareversion is equivalent to a major implementation project and requires funding forconsultants, resulting in the City being behind with the PeopleSoft fixes I bundleswhich may be the cause of many of our current issues.

RECOMMENDATIONS

That the Council, subject to the approval of the Mayor:

1. Authorize the General Manager, Information Technology Agency, or designee, toexecute Contract Amendment NO.5 with CGI Technologies and Solutions, lnc.,to Contract No. 114340 to reduce the amount by $71,925 and delete SupplyManagement System (SMS) Deliverables 59.3 through 59.8, change the value ofSMS Deliverables 59.1 and 59.2, and change the value of post-implementationsupport Deliverables 110.0 through 114.0, subject to the contractor's compliancewith all applicable contracting requirements, and subject to the approval of theCity Attorney;

2. Transfer $9,753,205 from the General City Purposes, Fund No.1 00/56, from theaccount for the Fiscal Year 2011-12 Financial Management System projectBudget (Line No. 25) to the following departments and accounts:

Fund/Dept/Acct

100/32/1010100/26/1010100/10/1010100/32/1090100/26/1090100/32/2120100/32/3040100/32/3040100/32/3040100/32/601 0100/32/7300100/40/6030

TOTAL

Amount

$1,079,241$2,013,394$ 114,176$ 43,152$ 15,000$ 20,000$5,600,840$ 400,000$ 99,200$ 20,000$ 150,000$ 198,202

$9,753,205

Purpose

ITA SalariesController SalariesCAO SalariesITA OvertimeController OvertimePrinting & BindingContractual ServicesContractual Services, ContingencyContractual Services, CARROfc & AdmEquipmentLeasing


FISCAL IMPACT STATEMENT

There is no additional impact to the General Fund with the approval of the aboveactions. Approval of the recommendations in this report will enable the use of$9,753,205 that was included in the 2011-12 Budget for the Financial ManagementSystem Project for this purpose. As such, they comply with the City's Financial Policiesin that funding is identified to support the proposed appropriations and contractcommitments.

Attachments1 - FMS Roadmap (Progress Chart as of 7/5/11 )2 - FMS Four-Year Project Cost Summary3 - CGI Contract Amendment NO.5

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Data Conversion Software IDefinition & Cleansing

Business Process Mapping

Data Warehouse & Reports

Adobe Forms

Security & Workflow IDepartment RolI·OutDocumentum Repository

Integrated System Test

User Acceptance TestPerformance Test

I Policies & Procedures -• Fun ctlonal• Enterprise·LevelDocumentation

Training

Change Management

Production Cutover

Historical OW, MERLIN &City Reports

Nightly Cycle Setup

Change Notice #2

Change Notice #3

Contract Amendment #4

Change Notice #4

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Department Resource Analysis & SMS Support 0, 'I: I Priority 1 Enhancements I: 0

:' : I PriDrity 2,Enhancemenls I I CJ1:1 ' Monit~ringC;OSeIY; ~ched~le 'l~ii-I;:I'i;'I'i-i'i'i· 'ii]:~~N~o~t~R~a~te~d~o~r~F~u~tu~re~T~aS~k:::I~=~'~=~~:.jAd'ustments I Issue Resolution Relluired ~

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lteratlons I, II, III, and IV

Ifrs. ining, I

Learning, 1ST - r ProduClion l:,

I Development., Test, IConversion

I Iterations I, II, IU, and IV I Dept InlerraceDilVelollnient I

: II Iterations I, II, III, and IV

I Data Definition a d Cleansinq:

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Process Mapping

Data Warehouse Bnd Report Iterations I, II, IIi, and IV : III Design, Development, and Testing

I Department IUsers Test

I I Dep~rtment Set-Up andRoll,Out

I Design Developmertt, Tesling, & Implamantalion Support

1t'fan & 1serlote 1ST Execution

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IFinal Test IRe-Testing I

: PI~n & I : .': SeiMs Execution: j.i~~~--~~~--~~~~~~~±=~~;--~~~~--~~~~~~II,l Functional Polle ~s & Plocedures ::, I Enterprise P&P

I Plan &Scripts

Project II CentralTeam Tesl II Users Test

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Go-Live lI, I Assessments

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Implementation Plan and Development

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FMS Budget and Expenditures Summary":~,~.~,"~"",~-

FMS FOUR-YEAR PROJECT CQST SUMMARY~ of 03/31/2011

I Original ProjectI Actual Appr{lprialion Approved By COllncil (8) Comparison

BetweenEstimate (A) Actual

1.1Projected Adjusted Budget Estimate and

(Expenditures To Oate) (Anticipated Expenditures) (Actual + Projected) Actual

~I Total I General Funds MICLA Total IIGeneral Funds MICLA Total IGeneral Funds MICLA Tolal (A· B)

System Development $ 31,075,690 1$ 5,623,054 $ 32,535,696 $38,158,750 $ 248,552 $ 3,126,284 $ 3,374,836 $ 5,871,606 $ 35,661,980 $ 41,533,586 $ (10,457,896)

FY08-09 $ 13.7.28,679

1

$ 1,540,92.2 $ 9,643,544 $ 11,184,466 $ 1,540,9.22 $ 9,643,544 $ 11,184,466

FY09-10 $ 17,347,011 $ .2,657,487 $ 14,867,535 $ 17,525,022 $ 2,657,487 $ 14,867,535 $ 17,525,0.22

FY10-11 N/A $ 1,4.24,645 $ 8,024,617 $ 9,449,262 $ 248,552 $ 3,126,284 $ 3,374,836 $ 1,673,197 $ 11,150,901 $ 12,824,098

System SupportlM aintenance $ 13,718,758 $ - $ $ $ 9,254,005 $ $ 9,254,005 $ 9,254,005 $ . $ 9,254,005 $ 4,464,753

FY10-11 $ 10,763,952 $ - $ $ - $ - $ $ - $ - $ $ -FY1t·12 $ 2,954,806 $ - $ $ - $ 9,.254,005 $ $ 9,254,005 $ 9,254,005 $ , - $ 9,2.54,005

Contingency $ 6,719,.168 $ . $ - $ $ 1,014,694 $ 374,560 $ 1,389,254 $ 1,014,694 $ 374,560 $ 1,389,254 $ 5,329,914

FY08-09 $ 2,059,302 $ - $ $ - $ - $ -

FY09·10 $ 2,602,052 $ - * $ $ - $ - $ -FY10-11 $ 1,614,593 s - . $ $ 614,694 $ 374,560 $ 989,254 $ 614,694 $ 374,560 $ 989,.254

FY11-12 $ 443,221 $ - $ . $ $ 400,000 $ $ 400,000 $ 400,000 $ . $ 400,000

Total 1$ 51,513,61511 $ 38,158,750 $ 14,018,095 I $ 52,176,845 $ (663,230)

* Contingency amounts $1,867,910 (Fy09-1o $6.25,440 and FYlO-11 $1,242,470) spent on system development and reflected in the actual expenditures for those years.$1.7 Mi IIion for SMS Inleg ration Support is not included in this report.CGI cost for CARR implementation ($560K) is included in this report; but other costs are not

Ir-- -~-I>Ot Transmittal - Attachment 2

- - = --------- - ~

FIFTH AMENDMENT to AGREEMENT C-114340BETWEEN THE CITY Of LOS ANGELES

ANDCGI TECHNOLOGIES AND SOLUTIONS INC.

PROFESSIONAL SERVICES AGREEMENT

This Fifth Amendment of Contract C-114340 is entered into between the City ofLos Angeles, California, a municipal corporation (hereinafter referred to as the"CITY") and CGI Technologies and Solutions Inc., a Delaware corporation(hereinafter referred to as "Contractor" or "CGI") with reference to the followingfacts:

WHEREAS, the CITY and CGI entered into a Professional Services Agreement("Agreement" or "Services Agreement") of City Contract No. C-114340 onAugust 25,2008 in the amount of Fourteen Million, Six Hundred Sixty-SevenThousand, Four Hundred Eighty Dollars ($14,667,480) for the implementation ofthe Financial Management System whereby Contractor agreed to provide AMSAdvantage@ software that is the basis for the services described in theAgreement; and

WHEREAS, the CITY (CFs 07-2186-S1 and S2) authorized the Controller toexecute the contract on behalf of the City; and

WHEREAS, the CITY (CFs 07-2186-S1 and S2) transferred the City ProjectManagement Office and the project management function from the Controllerto the Information Technology Agency; and

WHEREAS, the CITY (CFs 07-2186-S1 and S2) and CGI entered into a FirstAmendment as of September 10,2008 at no cost which transferred the oversightand administration of the Financial Management System Project from the Officeof the Controller to the Information Technology Agency and recognized theproject structure approved in the above Council files; and

WHEREAS, the CITY and CGI entered into a Change Notice Number One to theAgreement as of December 1, 2009, in the amount of Six Hundred ThirtyThousand, Nine Hundred Twenty Dollars ($630,920) which amended theAgreement to: (i) revise the Due Dates of select Deliverables to align with theapproved Implementation Analysis Document (Deliverable 18); (ii) add or modifyperformance of Services through the addition of new Deliverables and deletion ofcertain Deliverables and corresponding payment Milestones, and (iii) modify thescope of the Core Financial Software Modifications; and

WHEREAS, the CITY (CFs 07-2186-S1 and 82) and CGI entered into a SecondAmendment pursuant to Paragraph 30 (Change Notices and Amendments) of theAgreement as of April 29, 2010, in the amount of Two Million, Nine Hundred Nine

Fifth Amendment to Contract No. C-114340Professional Services Agreement

Page 1 of 5

Thousand, Nine Hundred Eighty Dollars ($2,909,980) in order to: (i) change theFMS go-live date to July 1,2011, (ii) add or modify performance of servicesthrough the addition of new Deliverables and updates to certain Deliverables andcorresponding payment Milestones, and (iii) make certain other changes to theterms of the Agreement based on these changes in services and requirements;and

WHEREAS, the CITY and CGI entered into a Change Notice Number Twopursuant to Paragraph 30 (Change Notices and Amendments) of the Agreementas of July 15, 2010, in the amount of One Hundred Seven Thousand, SixHundred Eighty Dollars ($107,680) in order to: (i) add or modify performance ofServices through the addition of new Deliverables and corresponding paymentMilestones and (ii) modify the scope of the Core Financial Software Modificationsfor lockbox and tax intercept; and

WHEREAS, the CITY and CGI entered into a Third Amendment pursuant toParagraph 30 (Change Notices and Amendments) of the Agreement in theamount of Five Hundred Sixty Thousand Dollars ($560,000), in order to: (i) addor modify performance of Services through the addition of new Deliverables tosupport the City's Centralized Accounts Receivable (AR) Reporting requirementsand (ii) make certain other changes to the terms of the Agreement based onthese changes in services and requirements; and

WHEREAS, the CITY and CGI entered into Change Notice Number Threepursuant to Paragraph 30 (Change Notices and Amendments) of the Agreementas of October 18,2010, in the amount of One Hundred Forty Thousand, EightHundred Dollars ($140,800) in order to: (i) add or modify performance ofServices through the addition of new Deliverables 129.0 through 130.9 andcorresponding payment milestones to provide assistance with Department-levelFMS Planning and Deployment Support and (ii) modify the Core Financial List ofKey Contractor Personnel; and

WHEREAS, the CITY and CGl entered into a Fourth Amendment pursuant toParagraph 30 (Change Notices and Amendments) of the Agreement in theamount of Three Hundred Eighty Three Thousand, Four Hundred Dollars($383,400), in order to: (i) add or modify performance of Services through theaddition of new Deliverable 131.0 and corresponding payment milestone todevelop a Citywide Resources Impact/Skills Gap Analysis and Deliverables 59.1through 59.15 and corresponding payment milestones to support SMS testingefforts and (ii) comply with applicable provisions of the City's First Source HiringOrdinance (Los Angeles Administrative Code Section 10.44 et seq); and

WHEREAS, the CITY and CGI entered into Change Notice Number Fourpursuant to Paragraph 30 (Change Notices and Amendments) of the Agreementas of January 14, 2011, in the amount of Two Hundred Eleven Thousand, FiveHundred Twenty Dollars ($211,520) in order to: (i) add or modify performance of


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Services through the addition of new Deliverables 36.1,41.2,45.2 and 77.1 andcorresponding payment Milestones and (ii) modify the scope of the CoreFinancial Software Modifications for a revised conversion approach and to modifythe service contract budget program to allow for special date processing; and

WHEREAS, the CITY and CGI entered into Change Notice Number Fivepursuant to Paragraph 30 (Change Notices and Amendments) of the Agreementas of February 14, 2011, in the amount of Seventy-Nine Thousand, Forty Dollars($79,040) in order to: (i) add or modify performance of Services through theaddition of new Deliverables 36.2, 41.3, and 45.3 and corresponding paymentMilestones, and (ii) modify the scope of the Core Financial SoftwareModifications to add an Authority field to the Appropriation Budget document andassociated inquiry page; and

WHEREAS, the CITY and CGI desire to enter into a Fifth Amendment pursuantto Paragraph 30 (Change Notices and Amendments) of the Agreement to reducethe amount by Seventy-One Thousand, Nine Hundred Twenty-Five Dollars($71,925), in order to: (i) delete SMS application support Deliverables 59.3through 59.8, (ii) change the value of SMS application support Deliverables 59.1and 59.2, and (iii) change the value of post-implementation support Deliverables110.0 through 114.0.

NOW THEREfORE, in consideration of the premises and of the covenants,representations and agreement set forth herein, the parties hereby covenant,represent and agree to amend the Agreement as follows:

1. Definitions. Capitalized terms used but not defined in this FifthAmendment will have the meanings indicated for them in the Agreement.

2. Decrease in Project Price. The Project Price identified inSubparagraph 19.5.1. (General) of Subparagraph 19.5 (PROJECT PRICE;CONTRACT SUM) of Paragraph 19 (PAYMENT TERMS) of the Agreement ishereby decreased by Seventy-One Thousand, Nine Hundred Twenty-FiveDollars ($71,925) from Nineteen Million, Six Hundred Ninety Thousand, EightHundred Twenty Dollars ($19,690,820) to Nineteen Million, Six HundredEighteen Thousand, Eight Hundred Ninety-Five Dollars ($19,618,895). Thecontingency amount, against which the City will write Change Notices, will beOne Million, One Hundred Two Thousand, Eighty-Seven Dollars ($1,102,087).Contract Sum shall remain unchanged at Twenty Million, Seven Hundred TwentyThousand, Nine Hundred Eighty-Two Dollars ($20,720,982).

3. Changes to Core Financial Deliverables Definition. Exhibit B (CoreFinancial Deliverables Definition) of the Agreement is hereby replaced in itsentirety by a new Exhibit B (Core Financial Deliverables Definition) dated June 6,2011 that deletes Deliverable Numbers 59.3 through 59.8, and is attached heretoand incorporated herein by this reference.


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4. Changes to Core Financial Project Schedule and Plan. Exhibit C(Core Financial Project Schedule and Plan) of the Agreement is hereby replacedin its entirety by a new updated Exhibit C (Core Financial Project Schedule andPlan) dated June 6, 2011, which is attached hereto and incorporated herein bythis reference.

5. Changes to Core Financial Pricing Schedule. Exhibit L (CoreFinancial Pricing Schedule) of the Agreement is hereby deleted in its entirety andis replaced by a new Exhibit L (Core Financial Pricing Schedule) dated June 6,2011, which is attached hereto and incorporated herein by this reference.

6. Amendments. No amendment, modification, or supplement to thisFifth Amendment shall be binding on either party unless it is in writing and dulyexecuted by the parties in interest at the time of the modification.

7. Entire Agreement. Except as expressly and specifically amendedhereby, the Agreement shall remain in full force and effect. There are no otheragreements, representations, or warranties between or among the parties,written or oral, concerning the subject matter hereof.

8. Headings and Labels. Article, section, and subsection titles andcaptions contained in this Fifth Amendment are inserted as a matter ofconvenience and for reference and in no way define, limit, extend, or describethe scope of this Fifth Amendment or the intent of any of its provisions,

9. Ratification Clause. Due to the need for the CONTRACTOR'sservices to be provided continuously on an ongoing basis, the CONTRACTORmay have provided services prior to the execution of this Agreement. To theextent that said services were performed in accordance with the terms andconditions of this Agreement, those services are hereby ratified. Except asamended herein, all other terms and conditions provided in the Contract shallremain in full force and effect.

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IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendmentto be executed by their duly authorized representatives.

THE CITY OF LOS ANGELESA Municipal Corporation

CGI Technologies and Solutions Inc.

By: By:TIM POPOL!Vice President

RANDI LEVINGeneral ManagerInformation Technology Agency

Date: ------------------------ Date: ------------------------

APPROVED AS TO FORM:Carmen A. Trutanich, City Attorney

By:Laurel L. LightnerAssistant City Attorney

Date: __

ATTEST: June LagmayCity Clerk

By:

Date:


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form gen. 160 (rev. 6-80) city of los...

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