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File No. 260191 Committee Item No. 2 Board Item No. COMMITTEE/BOARD OF SUPERVISORS AGENDA PACKET CONTENTS LIST Committee: Budget and Finance Committee Date March 25, 2026 Board of Supervisors Meeting Date Cmte Board Motion Resolution Ordinance Legislative Digest Budget and Legislative Analyst Report Youth Commission Report Introduction Form Department/Agency Cover Letter and/or Report • ASR Supplemental Information MOU Grant Information Form Grant Budget Subcontract Budget Contract/Agreement Form 126 – Ethics Commission Notice of Award/Award Letter Application Public Correspondence OTHER (Click on the hyperlinks to be redirected to the Legislative Research Center to view the entirety of voluminous documents) Executed Agreement 10/1/2018 Amendment No. 1 1/1/2023 Request for Proposals 10/27/2017 Completed by: Brent Jalipa Date March 19, 2026 Completed by: Brent Jalipa Date FILE NO. 260191 RESOLUTION NO. Supervisor Mandelman BOARD OF SUPERVISORS Page 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 [Contract Amendment -Sapient Corporation -Property Assessment System Replacement Project -Not to Exceed $33,912,702] Resolution authorizing the Office of the Assessor-Recorder to execute Amendment No. 2 to Contract 1000010122 with Sapient Corporation for the implementation and maintenance of the Property Assessment System Replacement Project; increasing the contract by $6,754,000 for a new total not to exceed amount of $33,912,702 and extending the contract duration from nine years and two months to 13 years and eight months, for a total term from November 1, 2018, through June 30, 2032. WHEREAS, Amendment No. 2 is substantially in the form attached and on file with the Clerk of the Board of Supervisors in File No. 260191, which is hereby declared to be a part of this Resolution as if set forth fully herein; and WHEREAS, Charter, Section 9.118(b) requires the Board of Supervisors to approve by Resolution amending contracts previously approved by BOS but only when the cumulative increases of those contracts are greater than $500,000; and WHEREAS, The Office of the Assessor-Recorder (ASR) conducted a competitive solicitation through a Request for Proposals, RFP ASR 2017-01, for development of the new Property Assessment System, including all services related to delivery, installation, integration, customization, data conversion, training, documentation, deployments, and project management, to replace the obsolete legacy system currently in use, in which the City selected Contractor as a qualified proposer pursuant to the RFP; and WHEREAS, Pursuant to the RFP the ASR awarded the contract to Sapient Corporation to for the Property Assessment System for a 12-year term, at a not-to-exceed contract sum of $21,414,700, which includes a 20% contingency amount, to implement and configure the Property Assessment System; and Supervisor Mandelman BOARD OF SUPERVISORS Page 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 WHEREAS, The Local Business Entity (“LBE”) subcontracting participation requirement for the Agreement is 4% of the total value of professional services awarded to the Contractor; and WHEREAS, The Agreement commenced on November 1, 2018, with an initial term of 12 years through November 1, 2030 and included a five-year option to extend; and WHEREAS, Amendment No. 1 to the Agreement adjusted the end date of the agreement to December 31, 2027, and include five-year option to extend; and WHEREAS Amendment No. 1 increased the not to exceed amount of the Agreement by $5,744,002 from $21,414,700 to $27,158,702; and WHEREAS, The Civil Service approval of Amendment No. 2 has been granted under File No. DHRPSC0001962; and WHEREAS, Amendment No. 2 to this Agreement will adjust the end date of the agreement to June 30, 2032; and WHEREAS, Amendment No. 2 will increase the not to exceed amount of the Agreement by $6,754,000 from $27,158,702 to $33,912,702; and WHEREAS, The Contract includes price-holds, discounts, retainage, and/or other terms sufficient to justify the price and term; now, therefore, be it RESOLVED, That the Board of Supervisors authorizes the Purchaser and the Office of the Assessor-Recorder to execute Amendment No. 2 to Contract 1000010122 with Sapient Corporation for the implementation and maintenance of the Property Assessment System Replacement Project; increasing the contract by $6,754,000 for a total not to exceed amount of $33,912,702 and extending the contract duration from nine years and two months to 13 years and eight months from December 31, 2027 to June 30, 2032; and, be it Supervisor Mandelman BOARD OF SUPERVISORS Page 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 FURTHER RESOLVED, That within 30 days of the contracts being fully executed by all parties, the Purchaser and the Office of the Assessor-Recorder shall provide the final contracts to the Clerk of the Board for inclusion into the official file. BUDGET AND FINANCE COMMITTEE MEETING MARCH 25, 2026 SAN FRANCISCO BOARD OF SUPERVISORS BUDGET AND LEGISLATIVE ANALYST 7 Item 2 File 26-0191 Department: Office of the Assessor-Recorder EXECUTIVE SUMMARY Legislative Objectives • The proposed resolution would approve the second amendment between the Office of the Assessor-Recorder (ASR) and Sapient Corporation (Sapient) for ongoing support and maintenance of the System for Managing Assessments, Records and Transactions (SMART), extending the term from nine years and two months to 13 years and eight months, for a total term from November 1, 2018, through June 30, 2032, and increasing the amount by $6,754,000 for a total not-to-exceed amount of $33,912,702. Key Points • Under the Property Assessment and Tax System (PATS) project, the ASR, the Treasurer & Tax Collector and the Controller’s Office are replacing the City’s two legacy property tax systems. Through an existing contract with the Sapient Corporation (Sapient), ASR is replacing the Property Assessment System, which is now called the System for Managing Assessments, Records and Transactions (SMART). • Phase 2 of the SMART project experienced significant delays due to inaccurate vendor delivery assumptions and an underestimation of project complexity. A joint root cause analysis largely assigned responsibility for the delays to the vendor. Phase 2 went live in September 2025, and the system is largely implemented, with the vendor completing remaining requirements as it transitions to ongoing maintenance. • Under the proposed amendment, Sapient will continue to provide maintenance and support services for SMART through June 30, 2032. Maintenance activities include defect and incident resolution, technical support and testing, completion of outstanding requirements, software upgrades, and implementation of enhancements. ASR intends to transition system support in-house in the future, but existing staff capacity is not currently sufficient. Fiscal Impact • The proposed amendment increases the contract amount by $6,754,000 for a total not-toexceed amount of $33,912,702. Maintenance costs are $1.2 million in FY 2027-28 and increase by 4.5 percent annually. Costs are funded by the General Fund. • The City’s implementation costs under the Sapient contract increased from approximately $15.1 million to $24.8 million, an increase of approximately $9.7 million or 64.5 percent. In addition, Sapient contributed $15.3 million toward project implementation following negotiations and a joint root cause analysis, which assigned each party a percent responsibility for the project delays and increased costs. Recommendation • Approve the proposed resolution. BUDGET AND FINANCE COMMITTEE MEETING MARCH 25, 2026 SAN FRANCISCO BOARD OF SUPERVISORS BUDGET AND LEGISLATIVE ANALYST 8 MANDATE STATEMENT City Charter Section 9.118(b) states that any contract entered into by a department, board or commission that (1) has a term of more than ten years, (2) requires expenditures of $10 million or more, or (3) requires a modification of more than $500,000 is subject to Board of Supervisors approval. BACKGROUND The City’s Office of the Assessor-Recorder (ASR) is responsible for carrying out property assessment related functions, such as identifying property ownership and assessing the value of property. The Property Assessment and Tax System (PATS) project is a multi-phase initiative among ASR, the Treasurer & Tax Collector and the Controller’s Office to modernize and replace the City’s aging legacy property tax systems and was approved by the Committee on Information and Technology in FY 2015-16. In November 2018, the Board of Supervisors approved two contracts for the Assessor’s implementation of the property assessment system replacement effort, including a contract with the Sapient Corporation (Sapient) for implementation services and ongoing support for a not-to-exceed amount of $21,414,700 and 12-year term from November 1, 2018 through November 1, 2030 (File 18-1037). The contract included one five-year option to extend through November 1, 2035, for a total potential term of 17 years. In March 2023, the Board of Supervisors approved the first amendment to the contract with Sapient, increasing the agreement by $5,744,002 from $21,414,700 to $27,158,702, and reducing the initial term from 12 years to nine years and two months to expire on December 31, 2027 (File 23-0233). The amendment maintained the one five-year option to extend through December 2032 for a total potential term of 14 years and two months. Project Status ASR and Sapient renamed the Property Assessment System to the System for Managing Assessments, Records and Transactions (SMART) and launched the project in January 2019 with an anticipated go-live date of November 2021. Phase 2 (Secured Property, Change in Ownership and Possessory Interest implementation) of the project experienced significant delays due to inaccurate vendor delivery assumptions and an underestimation of project complexity. In 2024, ASR identified a significant system design flaw and issued a change order. Following a joint root cause analysis, ASR reported that responsibility was attributed as follows: eight percent to ASR and 92 percent to Sapient. As a result of the multiple delays and change order, Phase 2 went live in September 2025, though the vendor continues completion of phase 2.x requirements. According to ASR, the majority of SMART implementation is complete and the system is transitioning to ongoing operations and maintenance. DETAILS OF PROPOSED LEGISLATION The proposed resolution would approve the second amendment between the Office of the Assessor-Recorder (ASR) and Sapient Corporation (Sapient) for ongoing support and BUDGET AND FINANCE COMMITTEE MEETING MARCH 25, 2026 SAN FRANCISCO BOARD OF SUPERVISORS BUDGET AND LEGISLATIVE ANALYST 9 maintenance of the System for Managing Assessments, Records and Transactions (SMART), extending the term from nine years and two months to 13 years and eight months, for a total term from November 1, 2018, through June 30, 2032, and increasing the amount by $6,754,000 for a total not-to-exceed amount of $33,912,702. The second amendment would exercise the one five-year extension option but reduces the total term by six months. We recommend that ASR amend the draft second amendment to clarify that there are no options to extend remaining. Services Under the proposed amendment, Sapient will continue to provide maintenance and support services for SMART through June 30, 2032. According to ASR, the five-year extension is needed to support post-implementation operations, including ongoing system maintenance, resolution of post-go-live issues, implementation of upgrades and security patches, and the transfer of knowledge to ensure effective system operation and troubleshooting. ASR states that vendor maintenance staffing of 10 FTE positions1 has been confirmed for FY 2025-26, and maintenance needs will be negotiated annually. Maintenance activities generally include defect and incident resolution, technical support and testing, completion of outstanding system requirements and software upgrades, and implementation of enhancements. ASR’s long-term objective is to transition system support in-house and reduce reliance on vendors. However, current staffing capacity is insufficient to support this transition. ASR is developing a phased plan to assess and build internal capacity in future years. This effort is expected to include additional FTE, though staffing levels have not yet been determined. ASR states the department does not plan to competitively solicit vendors for system maintenance following the conclusion of the current Sapient contract. Project Monitoring According to ASR, there are multiple mechanisms in place for project monitoring. The project team from Sapient and the department meet weekly to review the status of upcoming software releases and assess risks and system issues. Sapient is also required to develop reports and dashboards to track and summarize support incidents and defects, as well as detail the status and proposed actions for unresolved issues. The contract also includes a performance service credits provision that establishes financial penalties if the vendor fails to meet defined service level agreements for response and resolution times. According to ASR, no service credits have been assessed during the contract term. 1 This includes one Product Manager, one Senior Architect, three Senior Developers, two Developers, two Senior Quality Assurance Engineers, and one Quality Assurance Engineer