S37- Q24564: Approve an Ordinance Authorizing a First Amendment to Contract (4600012286) Between The City of Houston and MGT of America, Inc. to Increase the Maximum Contract Amount and Extend the Contract Term for Cost Allocation Plan Services for the Finance Department.
Specific Explanation:
The Director of the Finance Department and the Chief Procurement Officer recommend that City Council approve an ordinance authorizing a first amendment to the contract between the City of Houston and MGT of America, Inc. to increase the maximum contract amount from $179,220.00 to $238,960.00 and to extend the contract term from November 13, 2016 to November 13, 2017 for cost allocation plan services for the Finance Department.
The contract was awarded on October 23, 2013 by Ordinance No. 2013-972 for a one-year term, with two one-year options in the amount not to exceed $179,220.00. The additional funds requested should sustain the City’s operational needs through FY2017. Expenditures as of April 19, 2016 totaled $169,697.50.
The increase in spending authority is necessary to maintain current services to allow adequate time to complete a SAP upgrade, which will help to determine if these services can be performed in-house rather than being outsourced.
This contract provides services to develop annual cost allocation plans in compliance with the provisions of the Office of Management and Budget 2 CFR 200 guidelines and Generally Accepted Accounting Principles (GAAP) for the Finance Department. These services are necessary to maintain compliance with Federal grant guidelines.
M/WBE Subcontracting:
This contract was awarded with a 24% M/WBE participation goal and MGT America, Inc. is currently achieving a participation rate of 5.05%. The Office of Business Opportunity conducted a contractor's review to determine the reason for MGT's goal shortfall, which resulted in the contractor providing the following explanations: 1) limited opportunity in the first and second contract year, 2) inaccessibility of subcontractor to MGT’s proprietary cost allocation software, 3) reduction in the number of staff the subcontractor assigned to the project, and 4) outstanding subcontractor payments to be reported.
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John J. Gillespie, Chief Procurement Officer Department Approval Authority Signature
Finance/Strategic Procurement Division