Title
RESOLUTION AUTHORIZING CITY OFFICIALS TO PURCHASE AND CONTRACT FOR SOFTWARE AND TECHNOLOGY PRODUCTS AND SERVICES, SUBJECT TO CITY ATTORNEY AND INFORMATION TECHNOLOGY REVIEW AND APPROVAL.
Body
CITY PROPOSAL:
WHEREAS, Chapter 41 of the Duluth City Code provides methods to purchase and contract for the following without prior council approval: (1) supplies and contractual services with estimated costs of $150,000 or less, and (2) contracts that are not subject to competitive bidding requirements involving expenditures of $50,000 or less;
WHEREAS, the city purchasing agent has the power to establish all rules and regulations for city procurement and has established a purchasing policy, and said purchasing policies establish thresholds for city department heads and city purchasing agent authority to purchase and contract for supplies and services without council approval when the estimated cost remains below the above thresholds;
WHEREAS, notwithstanding the above, the city generally requires council approval of all purchase orders and contracts-regardless of the estimated cost-containing terms and conditions that the city defend, indemnify, and hold city vendors, contractors, or other third parties harmless from potential future liabilities (“indemnification clauses”), recognizing that any such defense and indemnification constitutes an unencumbered and uncapped potential obligation that may exceed council approval thresholds;
WHEREAS, throughout the course of each year, the city enters into a large volume of purchase orders and agreements to use or acquire software and technology products and services-including but not limited to programs, licenses, websites, applications, subscriptions, physical hardware and components, and various software- and technology-related management, support, design, and communication services (“software and technology”)- which are often critical components of the city’s work and are necessary for city staff to carry out their day-to-day responsibilities;
WHEREAS, the terms and conditions associated with software and technology are often fixed and non-negotiable, and routinely contain indemnification clauses, and the city council finds many of these purchases involve low-dollar amounts and narrow ranges of products or services that do not pose significant risks to the city; and
WHEREAS, the city council finds that the city’s manager of the Information Technology division, the city attorney, the city purchasing agent, and city department heads are in the best position to weigh the benefits and risks associated with the above-described software and technology purchases containing indemnification clauses.
NOW, THEREFORE, BE IT RESOLVED, subject to advance review and approval of the city’s manager of the Information Technology division, the city attorney, and city purchasing agent, that the proper city officials are hereby authorized to enter into agreements and place orders for software and technology that include indemnification clauses without prior council approval, up to an estimated cost not to exceed the council approval thresholds in city purchasing policies and Chapter 41 of the Duluth City Code.
Statement of Purpose
STATEMENT OF PURPOSE: This resolution authorizes the city’s manager of the Information Technology division, the city attorney, and city purchasing agent to enter agreements and purchase orders for software and technology products and services that include indemnification clauses without prior council approval, subject to the council approval thresholds in City purchasing policies and Chapter 41 of the Duluth City Code. Defense and indemnification constitutes an unencumbered and uncapped potential obligation that may exceed council approval thresholds, so the city typically requires council approval of all purchases and agreements that include such terms, regardless of the estimated cost. Due to the high-volume of IT purchases, which are often low-dollar, low-risk, critical to the city’s work, and subject to fixed, non-negotiable terms, the council finds that an internal city approval process for such agreements furthers the best interests of the city and its residents.