It appears the city won’t be putting out a tender nor request for proposals to renew its software licences.

At Monday evening’s council meeting – the first in almost a month – Michael Reyes, the city’s manager of business and technology systems, brought forward a report highlighting the reasons to renew the contract with Microsoft Canada.

Late last year, council raised a number of questions about sole-sourcing the $360,000 three-year contract to Microsoft Canada after a local IT company came forward with concerns that it was not going through a request for proposals process.

Council then asked city staff for more information on the matter, with Reyes bringing forward his report last night.

As he explained, the city is able to obtain a cheaper rate than is typical by being part of the Yukon government’s agreement with Microsoft, which extends to municipalities in the territory.

“There is urgency regarding renewal of our Microsoft licences,” Reyes told council.

“The city’s licences have expired as of Dec. 31, 2018, and Microsoft has granted the city a 30-day grace period (until end of January 2019).

“If the city allows the existing agreement to expire or lapse without renewing, the city will have to repurchase the Microsoft licences as if they were new, and this will result in increased pricing.”

Microsoft also confirmed with staff that the city would not qualify for the pricing available through the Yukon government on its own, as it is only available to customers with 15,000 or more users. Questioned about others the territory is partnering with to get up to 15,000 licences needed for the Enterprise Level pricing, Reyes said city officials are not privy to others that may be taking advantage of the pricing. He again noted it does extend to other municipalities throughout the territory.

“In addition to constant software updates and maintenance, the current Enterprise Level D agreement (for the pricing) with Microsoft provides the city access to other benefits without additional charge. These include planning services (consulting) and training vouchers for staff, for example,” Reyes said.

On it’s own, the city has about 300 licences it needs and would only qualify for an open or open value licensing tier with that costing $762,900 over three years.

Microsoft also confirmed with city staff that it doesn’t typically participate in tenders and RFPs for low-volume accounts.

Rather, the city would end up going through a reseller which gets its pricing from a Microsoft Licensing Service Provider or distributer.

“Each additional layer adds mark-up to the licence price, thereby increasing the cost to the purchaser,” Reyes noted.

Under enterprise level deal, he added, customers are provided with a service provider for service delivery as they are the only party permitted to service the agreements.

“Microsoft does this to ensure customers on Enterprise agreements get the service needed by partners with the highest competencies and certification from Microsoft,” he said.

“Microsoft has confirmed that outside of YG’s umbrella Enterprise agreement, it does not have any certified (licensed service provider) in the Yukon that can service customers. Any local business wanting to compete for the city’s business would be a value-added reseller.”

As Coun. Jocelyn Curteanu said, any local company would be required to charge a larger amount for the licences; thus, there would be no point in putting it out for proposals.

Meanwhile Coun. Samson Hartland, who had proposed sending it back to administration last month, said he appreciated the efforts by staff to get additional information.

While in this case it makes sense to sole-source the contract, he added, it’s important to look for opportunities for local businesses to compete on contracts.