Wisconsin public sector agencies at all levels (state, regional, county, and municipal) have purchased Environmental Systems Research Institute, Inc. (ESRI) products for many years under periodically-renewed Master Purchase Agreements (MPA). Wisconsin has been without an ESRI MPA since the last agreement expired in the summer of 2006, which has recently resulted in some temporary roadblocks and much confusion.
An MPA is a contracted price list for products, typically much reduced from the commercial pricing, and designed to benefit public sector purchasers in recognition of their large volume purchasing. Every time an MPA contract period expires, the MPA must be renegotiated. The state Department of Administration has these types of agreements with almost every technology company we deal with, ESRI is not unique in that regard.
Negotiations, before and since 2006, have produced very little towards a new ESRI MPA. There is no doubt that fault that can be laid on both sides, but that does nothing to resolve the situation. Essentially, as I see it, the problems can be reduced to several factors:
- The State is legally bound by predefined rules to protect its customers in these negotiations, not allowing great flexibility.
- ESRI wants to define Wisconsin relationships in the same language they use for other states, which is difficult.
- The dialogue going back and forth has been strained and slow (on both ends), and affected by new human resource assignments at ESRI.
Another big reason this hasn’t moved forward faster is that up until last week, there was no indication that both sides would not continue honoring the expired MPA pricing. Agencies had been successfully using the old MPA, with an unwritten understanding that this practice could continue until a new MPA was produced.
Last week, all that changed. The ESRI corporate office decided to pull the plug on Wisconsin, and several other states with expired MPAs.
This was done because of the potential legal ramifications they faced, in selling to us at a lower cost than they could sell to federal agencies. What this means to Wisconsin is that MPA pricing is no longer ‘honored’, and all purchases are based on commercial pricing. This also means a significant cost increase in some cases, and some very difficult explanations – in terms of planning and budgets already in place.
We have no right to complain about how they have allowed us to leverage an outdated MPA for many months, or about why they feel that practice might cost them legally, or why they would want to end the most recent MPA relationship.
However, I have advised the ESRI Minneapolis office, to communicate with the ESRI corporate office, that Wisconsin public sector stakeholders are shocked and surprised how the recent change was delivered without warning. I have told them that I view this as slap in the face to loyal customers of 20+ years and that, if this is not addressed, it could forever change our views on ESRI customer service.
That said, I have been working closely with the ESRI Minneapolis office to reach a solution. In the interim, DOA and ESRI are discussing temporary pricing solutions while the new MPA is negotiated. One option is to use federal GSA pricing, but this has not yet been finalized or agreed to by both sides.
I should note that the situation is changing quickly, almost on an hourly basis. I intend to have a resolution on this matter as soon as possible, but I cannot yet predict when the new MPA will be in place. I appreciate your patience as we get this sorted out.