REPORT TO COUNCIL
SUBJECT
Title
Action to Delegate Authority to the City Manager to Execute an Agreement with cQuant.io, Inc. for a Generation Resource Modeling Software Solution for Silicon Valley Power for Maximum Compensation of $3,791,855 Over a Ten-Year Term
Report
BACKGROUND
Silicon Valley Power (SVP), the City’s electric utility, relies on advanced modeling software to support effective resource planning and decision-making. This software supports a wide range of critical activities, including budgeting, financial forecasting, power supply portfolio management, resource planning, and project evaluation.
Modeling software also plays a critical role in risk modeling by enabling staff to identify, quantify, and analyze potential exposure to market volatility, regulatory changes, and operational uncertainties. These analyses support SVP’s risk oversight processes and ensure compliance with SVP’s energy risk policies.
SVP’s current modeling software does not provide the full range of analytical capabilities required for comprehensive portfolio management and long-term planning. Specifically, it lacks integrated risk modeling functionality needed to evaluate energy and natural gas price volatility and perform advanced scenario analysis. To address these gaps, staff initiated a competitive procurement process to acquire a more robust and modern modeling platform.
DISCUSSION
Pursuant to Section 2.105.140(d) of the Santa Clara City Code, a formal Request for Proposals (RFP) was conducted, with the award recommendation based on “best value.”
The RFP for a generation resource portfolio modeling software solution was published on the City’s e-procurement system. Two proposals were received by the proposal due date from Ascend Analytics, LLC. and cQuant.io, Inc.
A four-member evaluation panel reviewed the proposals, using the criteria published set forth in the RFP, including technical capabilities, system demonstrations, pricing, vendor experience, and industry expertise. Based on that evaluation, the panel determined that cQuant.io, Inc. (cQuant.io) submitted the best value proposal and recommends award accordingly. The cQuant.io platform best meets SVP’s operational needs because it provides integrated generation portfolio modeling, scenario analysis, and risk modeling functionality that is not available in SVP’s current platform.
The proposed solution from cQuant.io is a software-as-a-service (SaaS) platform that includes system configuration, implementation services, and annual software subscriptions. The agreement will include a detailed scope of services, a general project plan, and a compensation schedule. The compensation schedule provides for payment of 50% of the one-time implementation services fee and the Year 1 software subscription fee (collectively, the First-Year Fee) upon issuance of a City purchase order. Payment of the remaining 50% of the First-Year Fee will be due upon final system acceptance.
The proposed agreement has an initial two-year term, with eight optional one-year renewal terms, for a total possible term of 10 years. The total base compensation over the full 10-year term is $3,159,879. Staff requests a contingency of $631,976, or 20% of the base compensation, to address potential changes in subscription needs, including additional users and features that may be needed to meet evolving regulatory requirements. The resulting maximum compensation is $3,791,855, as shown in Table 1. Pricing for each option year may increase by up to 5% annually.
Table 1 - Cost Summary
|
Description |
Total |
|
One-Time Implementation Services |
$5,000 |
|
Year 1 Software Subscription Fee |
$240,800 |
|
Year 2 Software Subscription Fee |
$264,278 |
|
Subtotal - Initial Two-Year Term |
$510,078 |
|
|
|
|
Ongoing Software Subscription Fees |
|
|
Option 1 Software Subscription Fee |
$277,492 |
|
Option 2 Software Subscription Fee |
$291,366 |
|
Option 3 Software Subscription Fee |
$305,935 |
|
Option 4 Software Subscription Fee |
$321,232 |
|
Option 5 Software Subscription Fee |
$337,293 |
|
Option 6 Software Subscription Fee |
$354,158 |
|
Option 7 Software Subscription Fee |
$371,866 |
|
Option 8 Software Subscription Fee |
$390,459 |
|
Subtotal - Option Years |
$2,649,801 |
|
|
|
|
Total Base Compensation (10 Years) |
$3,159,879 |
|
Contingency (20%) |
$631,976 |
|
Maximum Compensation |
$3,791,855 |
On June 29, 2026, Governor Newsom signed Senate Bill 122 (SB 122), which expands the application of California sales and use tax to specified digital products, including prewritten software transferred electronically or accessed remotely, effective January 1, 2027. Because the proposed solution is a software-as-a-service platform accessed remotely, applicable sales and use tax is included in the pricing beginning in Year 2. The amounts shown in Table 1 include estimated applicable sales and use tax.
ENVIRONMENTAL REVIEW
The actions being considered do not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to Section 15061(b)(3) of Title 14 of the California Code of Regulations in that it can be seen with certainty that there is no possibility that the proposed actions may have a significant effect on the environment.
FISCAL IMPACT
Sufficient funds for the software services are available in the FY 2026/27 Operating Budget in the Electric Utility Operating Fund in the Resource Management program. Funding for future years will be included in the regular budget process.
COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov.
RECOMMENDATION
Recommendation
1. Authorize the City Manager or designee to execute an agreement with cQuant.io, Inc. (Agreement) for a software-as-a-service generation resource modeling software solution for a maximum compensation of $3,791,855 for a ten-year period, starting on or around October 1, 2026, through September 30, 2036, subject to the appropriation of funds and the review and approval as to form by the City Attorney; and
2. Authorize the City Manager or designee to take any actions necessary to implement and administer the Agreement and negotiate and execute future amendment(s) to: (a) add or delete services and related software subscriptions, (b) extend the agreement, (c) implement rate adjustments on the terms provided in Exhibit B, and (d) make de minimis changes; provided that, the total maximum compensation is not exceeded, subject to the appropriation of funds and the review and approval as to form by the City Attorney.
Staff
Reviewed by: Nico Procos, Director of Silicon Valley Power
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. Proposed Agreement for Services with cQuant.io, Inc.