Leveraging Provincial Agreement to Acquire Microsoft 365 Cloud Licenses, Implementation and Support Services

The ModernTO Program will accelerate the City's transition to a modernized employee experience and improve the overall efficiency of the office footprint. The City is currently leveraging the Province of Ontario's Enterprise Agreement with Microsoft for cloud-based software subscriptions in the form of an Enterprise Enrollment with Microsoft. In December 2016, City Council granted Staff the authority to utilize the Province of Ontario's Enterprise Agreement with Microsoft for three years, for the supply of cloud products and to conduct a Microsoft 365 Pilot Assessment. In December 2019, based on the pilot outcomes, the Technology Services Division (at the time known as Information & Technology Division) recommended to City Council a go-forward enterprise Microsoft licensing strategy for the City. The purpose of this report is to seek authority to complete the enterprise rollout, subject to yearly budget approvals, by: 1. amending the existing Enterprise Enrollment between the City and Microsoft, which is expiring this year, for a term of five years to provide for Microsoft 365 licensing subscriptions for City users. The pilot for 500 users was valued at $1.5 million net of Harmonized Sales Tax ($1.6 million net of Harmonized Sales Tax recoveries). It will now extend to up to 37,000 users, starting with an initial 10,000 users. Overall value of the contract will increase by up to $86.5 million net of Harmonized Sales Tax ($88.0 million net of Harmonized Sales Tax recoveries) bringing the maximum value of the contract to $88.0 million net of Harmonized Sales Tax ($89.6 million net of Harmonized Sales Tax recoveries); 2. executing a Professional Services agreement with Microsoft, to implement the Microsoft 365 platform, to a maximum contractual value of $4.6 million net of Harmonized Sales Tax ($4.7 million net of Harmonized Sales Tax recoveries); 3. executing an enrollment in a Microsoft Unified Support Services agreement which includes support and maintenance for existing and new licensed services. The City currently has authority under GL16.5 (Renewal of Proprietary Technology Maintenance Contracts Supporting the City Services from 2021-2025) for $11.4 million net of Harmonized Sales Tax ($11.6 million net of Harmonized Sales Tax recoveries). Through this report, City is requesting an additional $1.6 million net of Harmonized Sales Tax ($1.7 million net of Harmonized Sales Tax recoveries) bringing the maximum value of the contract to $13.0 million net of Harmonized Sales Tax ($13.3 million net of Harmonized Sales Tax recoveries) over five years. All of the above, will be pursuant to the terms of the agreements between the Province of Ontario and Microsoft. Other governments[1] in Canada that have implemented Microsoft 365 in their operations include Government of Canada (300,000 users), Province of Ontario (70,000 users), Government of Quebec (56,000 users), City of Ottawa (20,000 users) and City of Brampton (5600 users). City Council approval is required in accordance with Municipal Code Chapter 195, Purchasing, where the current request exceeds the Chief Procurement Officer's authority of the cumulative five year commitment limit for each vendor under Article 7, Section 195-7.3(D) of the Purchasing By-law or exceeds the threshold of $500,000 net of Harmonized Sales Tax allowed under staff authority as per the Toronto Municipal Code, Chapter 71, Financial Control, Section 71-11(A). [1] Source: Microsoft Canada Inc.

an agreement to secure professional services to implement the Microsoft 365 platform at an estimated sum of up to $4,536,924 net of Harmonized Sales Tax ($4,616,774 net of Harmonized Sales Tax Recoveries); c. an agreement to secure additional support services for the ongoing maintenance and operational support of the Microsoft 365 platform and foundational Microsoft technologies for a term effective May 1, 2021 to May 31, 2026 and increase the value of the Unified Support Contract by an estimated sum of up to $1,705,368 net of Harmonized Sales Tax ($1,735,382 net of Harmonized Sales Tax Recoveries) to $13,071,368 net of Harmonized Sales Tax ($13,301,424 net of Harmonized Sales Tax Recoveries).