Tentative contracts with two companies that would handle the bulk of the city of San Diego's information technology services -- and which could result in cost savings of millions of dollars -- were approved unanimously today by the City Council's Rules Committee.
The proposed five-year deals with Atos IT Solutions and Services and CGI Technologies and Solutions will now go to the full City Council for final approval.
Mayor Jerry Sanders said the deals should result in a cost savings of $7.4 million over the life of the contracts, and are part of a move by the city to end its 30-year relationship with Data Processing Corp.
The two firms would perform software development and maintenance, provide help-desk support for city employees, and supply other services, the mayor said. He said that if they perform well, and two years are added to the contracts, the savings would grow to more than $21 million.
Chief Operating Officer Jay Goldstone said the transition from DPC to the other companies would 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 released last week, he said.
Goldstone said the savings from the contracts would catch up, though, and the city should break even after about three years. The last couple of years would result in the estimated $7.4 million in savings, he said.
Approving the contracts was "the first step in bringing the city's IT operations up to industry standards,'' Goldstone said.
Councilman Todd Gloria, as part of a motion to approve the deals, asked for the mayor's office to clarify differing numbers on costs and savings.
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 them 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.
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.
