TEACHERS RETIREMENT BOARD REGULAR MEETING CONSENT: X ATTACHMENT(S): 0. ACTION: X DATE OF MEETING: April 6, 2017

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1 TEACHERS RETIREMENT BOARD REGULAR MEETING Item Number: 13d SUBJECT: Contracts Requiring Board Approval CONSENT: X ATTACHMENT(S): 0 ACTION: X DATE OF MEETING: INFORMATION: PRESENTER: Lisa Blatnick The Teachers Retirement Board delegation to the Chief Executive Officer requires that the board approve: all non-investment contracts with a cumulative value exceeding $1,000,000; all non-competitive bid contracts with a cumulative value exceeding $100,000; and any contract amendment exceeding 15% of the cumulative value previously approved by the board. The contracts listed below exceed these amounts: AMENDMENT 1. Visionary Integration Professionals, LLC Technical Advisory and Business Analysis Services Solicitation No Contract No , A-4 Term: January 1, 2016 through December 31, 2019 Previous Contract Amount: $768, Amendment Amount: $327, Total Vendor Amount: $1,096, Branch Executive: Robin Madsen Staff requests board approval to increase the contract authority for the current Visionary Integration Professionals, LLC contract to include additional technical advisory and business analysis services at the cost of an additional $327, Visionary Integration Professionals, LLC began providing technical advisory and business analysis services to CalSTRS in The original contract established the agreement with the firm to provide technical services. TRB 395

2 Page 2 Three Amendments have since been approved and added to this contract for additional services, and the contract s current value is $768, The present Amendment 4 will add an additional $327, to the contract (exceeding 15% of the previous value, and taking the contract over $1,000,000) to extend the services period for Project Governance Advisory services related to BD Retrofit, Data Preparation, and Pension Solution Projects through February CONTRACT 1. Deloitte Consulting, LLP BusinessDirect Retrofit and Integration Services Solicitation No Contract No Term: Four years with option to extend for three years Total Vendor Amount: $9,951, Branch Executive: Ashish Jain Staff requests board approval to enter into a multi-year contract with Deloitte Consulting, LLP to support an integration effort involving the retrofit of specified pension-related functionality and interfaces from an existing SAP system, and for the design, build, test and deployment of the SAP-side of interfaces with CalSTRS new pension system. CalSTRS maintains predominantly separate systems for managing financial services and for pension administration. CalSTRS implemented the SAP enterprise resource planning system, BusinessDirect (BD), in 2011, to support CalSTRS financial services activities and employer accounts, as well as to reduce financial and operational risks. CalSTRS has more recently embarked on an effort to replace its legacy pension administration system, START. START is the custom-built system that CalSTRS currently uses to manage and administer the State Teachers Retirement Plan for employers, members, participants and their beneficiaries. The new pension administration system currently being implemented is called the Pension Solution. Existing CalSTRS pension functionality has been implemented partially in BD and partially in START. As part of the new pension system implementation, CalSTRS needs to retrofit some pension functionality in BD since it is already built into the new Pension Solution and TRB 396

3 Page 3 redesign/deploy interfaces between BD and the new pension system and certain external parties to ensure proper accounting under the new multi-system configuration. Deloitte Consulting, LLP will provide the retrofit/integration services required in BD to support the integration effort of the Pension Solution. Procurement Action: A Request for Proposal (RFP) was issued on October 3, Two out of the seven firms that submitted the required Intent to Propose letter, responded with their proposals by the RFP deadline and were evaluated according to best value criteria in the RFP. A Notice of Intent to Award was issued to Deloitte Consulting, LLP on January 20, NON-COMPETITIVELY BID (NCB) 1. Mosaic Governance Advisors Board Governance Consultant Term: June 1, 2017 through May 31, 2019 Total Agreement Amount: $200, Support Branch Executive: Jack Ehnes/Brian Bartow Staff requests approval to enter into a two (2) year contract (with one year optional renewal) with Mosaic Governance Advisors for the amount of $200,000. The board requested continuing governance consulting services as the current consulting contract will expire in On November 2, 2016, CalSTRS issued a Request for Proposal (RFP) to provide a variety of governance consulting services to the full board as well as the board s governance committee. A competitive RFP was conducted that resulted in one qualified response. Due to a change in the principal consultant with the Successful Proposer, this NCB is now being requested for approval. Those services detailed in the scope were: Attend regular meetings of the board s governance committee. Attend other committee meetings as requested by the board chair to gain insights on board activities. TRB 397

4 Page 4 Lead board annual self-evaluation, CEO/CIO annual performance appraisals with the board, and board consultant evaluations at the board offsites. Participate in preparation meetings with senior executives and lead the board s strategic planning process. Conduct the new board trustee orientation. Working cooperatively with the Office of General Counsel in supporting the work of the governance committee. Prepare written agenda materials for the board and committee as needed. Develop written curriculum material for the new trustee orientation. Develop analysis and review of materials related to board polices. Review materials and provide advice on annual incentive compensation and performance evaluations for CEO/CIO. Provide benchmarking research on policies and practices found in public pension plans. Provide telephone consulting advice with board leadership regarding board governance issues or best practices in the industry. Provide coaching for board members as requested on board leadership and meeting management dynamics. Additional board services as requested. Consulting services are billed at an hourly rate and the billed hours will vary year to year based on the board and committee work plans. The contract amount reflects an estimation of the aggregate hours/travel expenses over a two year period. Based on recent years, the annual base consulting hours are estimated at 240 hours plus a 10% buffer and travel related expenses. This aggregates to roughly $100,000 per year or $200,000 over two years. 2. Xerox Corporation Xerox Corporation Agreement Term: July 1, 2017 June 30, 2022 Contract Amount: $364, Branch Executive: Lisa Blatnick Staff request board approval to enter into a five year contract with Xerox Corporation to secure maintenance services for the CalSTRS Copy Center equipment. The CalSTRS Copy Center equipment is used to print CalSTRS forms, publications, board agendas, mass mailing, etc. After our previous equipment reached its end of life and our contract expired, we met with vendors and researched other equipment; Xerox was the only vendor who could provide equipment that could meet the needs of CalSTRS business. TRB 398

5 Page 5 CalSTRS purchased the new Xerox equipment for the CalSTRS Copy Center on April 19, 2016 and the equipment was delivered on June 23, Once CalSTRS took ownership of the equipment, CalSTRS needed to establish a service/maintenance agreement to cover the Xerox equipment as there was no warranty. CalSTRS entered into a one year service contract with Xerox Corporation for FY 16/17 to cover the machine while staff conducted further research to see if other vendors could service the equipment. Based on our assessment, we are not aware of any competitive service organization that is active and operating in the greater Sacramento metropolitan area or surrounding communities that can service our Xerox equipment. Xerox Corporation is the only authorized service organization for our Xerox products in the Sacramento, Stockton, Modesto and Fresno area. Xerox will provide only trained, certified Xerox technicians for repairs and maintenance services for our equipment at the following CalSTRS headquarters location: 100 Waterfront Place, West Sacramento, CA Services performed by Xerox will include all maintenance, labor and parts & supplies excluding paper and staples. Xerox will repair all problems with the Xerox equipment or replace it with comparable Xerox copier at its own expense. RECOMMENDATION Staff recommends the board approve the contracts and amendments listed above. TRB 399