Methuen council prepares for vote on IT outsourcing

February 20th, 2012 by Manmohan Leave a reply »

City councilors are scrutinizing the mayor’s plan to privatize the municipal Information Technology department before a potential vote tomorrow night.

Stephen Zanni wants to scrap the four-employee IT department in favor of Retrofit Technologies, Inc., of Milford. The mayor will ask councilors to approve contracts with the private IT vendor covering the remainder of the fiscal year and year beginning July 1.

Council Chairwoman Jennifer Kannan said Zanni has reached out to councilors in recent days to explain his plan, which he says will save the city $63,340 this year and $174,000 next year.

“There’s still some questions that need to be answered,” Kannan said.

Kannan said municipal computers and equipment need to be upgraded, but the cost of doing so was not clear when Retrofit executives made their sales pitch to councilors Jan. 30.

“Where is the price for that?” said Kannan. “In my opinion that should have been in the presentation and it wasn’t. If this is a maintenance contract, what are we trying to manage? Old equipment?”

Retrofit performed an assessment of the Methuen IT department late last year. The company’s resulting report recommended privatization and identified a number of problems or shortcomings with the city’s current IT services, including the absence of a ticket system to track IT service requests and an inadequate disaster recovery plan, among other issues.

Zanni has already agreed to have Retrofit establish a new recovery plan.

Several councilors have questioned why the city should retain IT services from the same company that performed the assessment and went on to recommend privatization.

Councilor Joyce Campagnone said it makes sense to shop around before signing a contract.

“Do you buy the first car you see?” she said. “I’m not saying anything against the company. But you don’t just hire the first person for the job.”

Zanni said the city is not required to go out to bid for IT vendors because RetroFit is on a pre-approved state list. He said the company is reputable and was the lowest of three bidders for last year’s IT assessment. Zanni also cautioned that going out to bid will eliminate any savings this year and greatly reduce the amount the city saves on IT next year.

Zanni said the city is slated to spend $794,448 on IT this year but will reduce that cost to $731,107 if councilors agree to outsource with Retrofit. Next year, Zanni said the city would pay Retrofit $627,166. IT is projected to cost $801,606 next year without outsourcing.

If the city is satisfied with Retrofit after next year, Zanni said he will consider a three-year contract extension. Zanni said Retrofit has agreed to charge $600,970 each year. Projected savings under the three-year deal total $650,000.

All four municipal IT employees will lose their jobs under Zanni’s plan. The mayor said unions cannot block privatization because he is moving to eliminate an entire department.

Zanni said Retrofit will increase IT performance while reducing costs.

“I’m looking to make government more cost-effective,” said Zanni. “This is saving money for the taxpayer.”



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