Contracts with two companies that will handle the bulk of the city of San Diego's information technology systems were passed unanimously by the City Council today in hopes of saving money while improving services.
The deals with Atos IT Solutions and Services and CGI Technologies and Solutions -- part of a move by the city to end its 30-year relationship with the quasi-independent Data Processing Corp. -- are worth a combined $117.8 million.
The agreements should result in a minimum cost savings of a range of $7.4 million to $20 million, as estimated by the mayor's office, or as little as $2.1 million up to $14.8 million, as calculated by the city's Independent Budget Analyst's office.
Mayor Jerry Sanders said the firms will also upgrade the city's IT infrastructure, which is "stuck in the 1970s.''
"Until now, for some reason, the services have never been put out to bid,'' Sanders said.
The two firms will perform software development and maintenance and provide help-desk support for city employees, among other services, the mayor said. If they perform well, and two years are added to the contracts, the savings would range from $21.6 million to $39 million, he said.
"This is no small amount -- this money can be used to resurface more roads, hire more police officers and extend library and rec center hours even further,'' Sanders said.
Chief Operating Officer Jay Goldstone said the transition from DPC to the other companies will 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, 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 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 the workers 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.
He promised to update the City Council's Rules Committee on plans to dissolve the DPC in July. Language is in the contracts to prevent the companies from sending jobs from the contracts to other countries.
Another IT contract with an outside firm also has been reached and will be announced in the near future, with similar savings totals, city officials said.
