Memphis looks to continue outsourcing contract for city IT services

According to a request for proposal (RFP) issued earlier this month, the City of Memphis, Tennessee is looking to extend an outsourcing contract for its IT infrastructure and Application Maintenance and Support (AM&S) services. The deal could be worth more than $35 million over five years, with two one-year options.

The five-year base contract could be worth as much as $7 million per year for vendors who are able to satisfy a base set of services including data center operations, help desk support, application development, telecommunications, information security and monitoring tools. Memphis’ budget appropriations for FY 2011 have dictated the ceiling award for base services, but a ten-year history of IT outsourcing in the city and contractual room for “additional services” suggest the price tag could be higher.

In 2000, Memphis awarded a $42.1 million, seven-year contract to Systems and Computer Technology Corporation (SCT), over competing vendors Electronic Data Systems and Affiliated Computer Services (ACS). SCT was then acquired by ACS about six months later, leading industry observers to hail ACS’ entrance into the state/local outsourcing big leagues in 2001. By 2006, the city was paying more than double the current asking price on its outsourcing contract, sending $69.4 million for the job, an inter-office memo revealed.

The City of Memphis Information Services department (IS) provides service to over 4,500 city employees across fourteen divisions, the RFP explained. And with the exception of Radio Maintenance, GIS and six Information Technology Officers, all IS departments are currently outsourced.

In addition to the base services outlined by the RFP, additional city projects that would need support include VOIP and Wireless network expansion, Gigabit LAN upgrades, a Business Continuity/ Disaster Recovery plan for its data center and a library infrastructure upgrade. The City of Memphis is also seeking to improve Help Desk services and provide a single “Service Desk” for incident, problem and change management processes.

The contract winner would have to manage a host of legacy technologies ranging from IBM, Dell, HP, Sun, VMware, and Microsoft at its data centers and remote locations, while EMC and Hitachi encompass the city’s storage solutions. Application support is also required for an Oracle e-Business Suite, including an enterprise-wide human resource, finance, payroll, benefits and customer relationship management system, according to the RFP.

All proposals must be submitted no later than August 13. And a final award is expected between mid-September and December of this year.

For a full copy of the city’s RFP, click here.