San Diego expects to save millions of dollars on IT contracts

KUSI Newsroom,
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KUSI Newsroom

SAN DIEGO (CNS) – The city of San Diego has agreed to tentative
contracts with two companies to handle information technology services, which
should result in cost savings of $7.4 million over the next five years, Mayor
Jerry Sanders said Tuesday.

The deals with Atos IT Solutions and Services and CGI Technologies and
Solutions are part of the city's move to end its 30-year relationship with Data
Processing Corp., Sanders said.

“In an effort to reduce our costs and bring our IT system out of the
1970s, my administration last year launched a fair and open process that allows
private companies an opportunity to bid for the right to provide the city with
IT services,” Sanders said.

It's the first time the city has put its entire IT portfolio to bid
since it began its relationship with DPC, the mayor said.

The five-year proposed deals, which will go before the City Council's
Rules Committee on Wednesday, require approval from the full council to take
effect.

The two firms would perform software development and maintenance and
provide help desk support for city employees and other services, the mayor
said. He said if the companies perform well, and two years are added to the
contracts, the savings would grow to more than $21 million over the life of the
deals.

Another IT contract with an outside firm has also been reached and will
be announced in the near future, with similar savings totals, city officials
said.

Chief Operating Officer Jay Goldstone said the transition from DPC to
the other companies would cost the city more than $12 million next year,
including $6 million from the general fund. That money is already in the
mayor's budget proposal released last week, he said.

Goldstone said the savings from the contracts will catch up, though, and
the city should break even after about three years. The last couple of years
will result in the estimated $7.4 million in savings, he said.

According to Goldstone, about 95 percent of DPC's revenue comes from the
city of San Diego, and 144 of its employees work on municipal functions. Many
of them are expected to be hired by the new vendors, he said.

DPC will continue to provide IT services to the city for a transition
period of about one year, Goldstone said.

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