TO: Honorable Mayor & Members of the North Port Commission
FROM: A. Jerome Fletcher II, ICMA-CM, MPA, City Manager
TITLE: Approve the Issuance of a Cure Notice to Xerox Corporation and Authorize Termination of the Lease Pricing Proposal Agreement if the Deficiencies are not Cured Between the City of North Port, Florida, and Xerox Corporation, in the Amount of $381,879, Purchased Under the University of South Florida Contract No. 2024‑097‑ITN‑PRO.
Recommended Action
Option 1: Approve the issuance of a Cure Notice to Xerox Corporation and authorize termination of the Lease Pricing Proposal Agreement if the deficiencies are not cured between the City of North Port, Florida, and Xerox Corporation, in the amount of $381,879, purchased under the University of South Florida Contract No. 2024‑097‑ITN‑PRO.
City Commission Options
Option 1: Approve the issuance of a Cure Notice to Xerox Corporation and authorize termination of the Lease Pricing Proposal Agreement if the deficiencies are not cured between the City of North Port, Florida, and Xerox Corporation, in the amount of $381,879, purchased under the University of South Florida Contract No. 2024‑097‑ITN‑PRO.
• Pros:
o Issuing a Cure Notice formally documents the City’s concerns and gives Xerox written notice of required corrective actions. This strengthens the City’s legal position by showing it followed contractually required steps before considering termination.
o Per the Xerox MSA - USF ITN 2024-097-ITN-PRO-USF Signed and Xerox Countersigned, cure opportunities are part of the termination prerequisites. Approving the cure notice ensures the City meets these obligations, preserving its right to terminate without financial penalty if Xerox fails to cure the identified issues.
o Proceeding with a Cure Notice demonstrates good‑faith compliance with the Contract. This reduces the risk of Xerox arguing that the City failed to follow required procedures, which could otherwise weaken a breach of claim or lead to contested financial exposure.
o Issuing the notice supports a fair, transparent process by giving Xerox one last chance to address the problems. If they successfully cure the issues, the City may avoid the cost and disruption of transitioning vendors.
• Cons:
o The Xerox Agreement includes provisions that may require payment of remaining balances and fees if an order is terminated early; there is a potential financial impact; but the exact amount is unknown at this time. If Xerox chooses to pursue these costs, the City could incur expenses such as remaining principal and disengagement fees (as outlined in the Xerox MSA - USF ITN 2024-097-ITN-PRO-USF Signed and Xerox Countersigned Agreement). However, if Xerox cannot cure the identified items within that required period, the termination would be based on breach meaning the cost to the City would be zero.
Option 2: Deny the issuance of a Cure Notice to Xerox Corporation and authorize termination of the Lease Pricing Proposal Agreement if the deficiencies are not cured between the City of North Port, Florida, and Xerox Corporation, in the amount of $381,879, purchased under the University of South Florida Contract #2024‑097‑ITN‑PRO.
• Pros: Staff have not identified an advantage to denying the issuance of the Cure Notice, and the termination of this Contract.
• Cons:
o Internal legal guidance emphasizes that cure procedures must be followed before termination is pursued. Denying the Cure Notice may prevent the City from demonstrating that it met required notice obligations, which could undermine a termination for cause.
o If the City bypasses the cure process, Xerox could argue that the City did not follow the procedural steps outlined in the Agreement. This may expose the City to challenges or claims if termination is attempted without proper notice.
o The Cure Notice formally identifies deficiencies and requires corrective action. Denial of the Cure Notice removes the structured mechanism for demanding compliance, reducing leverage and the ability to create a clear record of unmet obligations.
o Denying the Cure Notice would require the City to continue utilizing equipment that has demonstrated significant and ongoing performance failures, resulting in continued operational disruptions across the City.
o Staff would remain reliant on devices that have proven unreliable, time-consuming, and costly in terms of lost productivity.
o Delaying the Cure Notice may prolong the time before a reliable, cost-effective replacement solution can be implemented.
Background Information
In July 2025, the City issued Purchase Order No. 51749 under the University of South Florida Contract No. 2024-097-ITN-PRO to procure 36 Xerox multifunction copiers to replace the existing fleet. Following deployment between August 2025 and February 2026, the City began experiencing widespread and persistent performance issues affecting multiple Departments and disrupting daily operations. Initial installation challenges included damaged or misconfigured devices; delays in receiving replacements; and incorrect power specifications for bill-printing units that would have required approximately $19,000 in electrical upgrades. Although alternative models were proposed, concerns remained about their ability to reliably meet required print volumes.
The most significant and recurring operational impact has been related to scanning and optical character recognition (OCR). Staff have reported that tasks previously completed within minutes, now routinely take 15-20 minutes or longer. Large scans frequently cause system resets leading to lost data, while other common issues include incomplete or skipped pages; failed or cancelled scans; unrecognized page sizes; prolonged delivery times for scan-to-email or scan-to-folder functions; and intermittent freezing that requires full device restarts. Documents routed to Laserfiche often experience substantial delays. Xerox’s proposed solution, moving OCR to an external server introduces additional costs and operational risk without resolving underlying performance deficiencies.
Additional mechanical, usability, and reliability issues have been documented across Departments, including touchscreen malfunctions; recurrent part failures; poor print and copy quality (even when adjusted to maximum settings); blank or distorted output inaccurate color reproduction; slow PDF printing; print jobs marked “completed” that do not print until hours or days later.
Paper-handling problems have also been frequent. These include false “empty drawer” errors; sensitivity in paper size detection causing misfeeds or misalignment; trays pulling the wrong media type; 11x17 printing failures; and bypass tray settings requiring repeated manual adjustments on both the device and the computer. Label and envelope printing commonly produce jams or errors, and media placement requirements vary across devices.
Departments further report issues with faxing workflows, including the inability to send multiple separate transmissions without waiting for confirmation between each. Billing concerns were first identified on May 7, 2026, and communication remains unresolved.
Collectively, these issues have created substantial workflow disruption; reduced productivity; and increased staff frustration. Despite multiple service calls; escalation attempts; and temporary fixes; critical deficiencies including scanning; OCR performance; copy quality; and mechanical reliability remain unresolved and continue to impact operations Citywide.
The issuance of a Cure Notice to Xerox Corporation and authorization of termination of the Lease Pricing Proposal Agreement if the deficiencies are not cured between the City of North Port, Florida, and Xerox Corporation, in the amount of $381,879, purchased under the University of South Florida Contract #2024‑097‑ITN‑PRO has been reviewed by the City Attorney and is legally correct as to form.
Strategic Plan Pillar
Good Governance
Financial Impact
The financial impact to the City is currently undetermined. If Xerox successfully cures the deficiencies identified in the Cure Notice within the required timeframe, the City anticipates no additional costs beyond the monthly lease and service payments already being made under Purchase Order No. 51749.
However, if Xerox is unable to cure the performance issues, the potential financial exposure is uncertain. While Xerox may assert outstanding charges or other financial claims, the governing Contract provides that if cure is not achieved, the remaining financial obligation to Xerox should be zero. Until Xerox confirms whether all deficiencies can be fully remedied, the City cannot determine the final financial impact with certainty.
Procurement
Not applicable.
Attachments:
1. Letter
Prepared by: Eric Ryan, Information Technology Manager
Vicki Edwrds, Senior Business Administrator
Aaron Bourquin, Communications and Infrastructure Manager
Department Director: Kaitlyn Griffin, MPA, Performance & Accountability Officer