01-08-2002 - Award of Bid #1101-B; Replacement of the City Telephone SystemCity of 'West Covina
Memorandum
January 8, 2002 _ -AG NDA
TO: Andrew G. Pasmant, City Manager ITEM NO. C-4e
and City Council DATE 1/8/02
FROM: J. T. Keating, ®PRINTED ON RECYCLED PAPER
Interim Communications Director
SUBJECT: AWARD OF BID #1101-B; REPLACEMENT OF THE CITY
TELEPHONE SYSTEM
SUMMARY: This report recommends that Bid # 1101-B, for the replacement
of the City Telephone System, (CIP Project 02401), be awarded to
Standard Tel Business Communications Systems of Long Beach, CA,
the lowest responsive bidder, and that the remaining expected costs of
the, project be funded by the .Equipment Replacement Account.
BACKGROUND:
Replacement of the City Telephone System which serves City Hall, the Police and
Communications buildings as well as City Yard, and includes the associated voice
messaging and call accounting systems, was among the list of Capital Improvement
Projects (CIP) approved by the City Council for this fiscal year. Purchased and installed
in 1986, the existing system no longer satisfies the City's needs. Additionally, Siemens,
the telephone system switch manufacturer, recently notified the City that it will no longer
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rovide maintenance support for the system after December 2002.
DISCUSSION:
Needs Assessment Performed. Upon approval of the CIP budget, a telecommunications
consultant was hired and a Needs Assessment commenced. The assessment, which
consisted of an inventory of all telephone equipment, an inspection of all associated
conduits and ducts, and the consultant's interview of each and every Department Head,
identified several deficiencies with the present system such as:.
1) an insufficient number of direct inward dial numbers (DID) resulting in excessive
transferring of calls;
2) a lack of redundancy in the system's design, which reduces the system's
reliability and could effectively cripple our Emergency Operations Center (EOC)
capability during emergencies;
3) the inability to dial 9-1-1 directly from any in-house instrument and automatically
know the location of that caller;
4) the inability to route long distance -calls in the most cost effective manner; and
5) the inability to utilize integrated voice messaging, caller id, fax on demand and
other applications of current technology.
Aside from the above, the Needs Assessment also revealed that the majority of conduits
and ducts used to run telephone.and data cabling throughout City Hall, certain sections of
the Police Building, and the City Yard Administration Building, are full to capacity and
in order to maintain services during the transition from the existing system to a new one,
alternate routes for running the new cabling will -be required. It is absolutely necessary,
for example, to install new conduits from the 3`d floor, south side of City Hall across the
roof to the north side, in order to provide new service to the north side of both the 2nd and
3`d floors of City Hall.
System designed and RFP Issued. A new systems' design, incorporating solutions for
all of the above listed deficiencies, including the installation of new cabling for the new
conduit runs and subsequent removal of the old cabling, was developed and included in a
very detailed Request For Proposal (RFP) that required a fixed total price for all required
work. The RFP was issued on November 14, 2001, and a mandatory, pre -bid conference
was held'on November 27, 2001. The conference was attended by some 19 various
telephone companies and cable installers.
Vendor Response. -At the bid opening on December 6, 2001, nine (9) separate bids
were received as follows:
Vendor Total Cost
Business Tel. Communications Systems $ 297.,551.34
Corona, CA
Standard Tel $ 363,770.80
Long Beach, CA v
Exp cr Net $ 366,233.38
Tustin, CA
Transwest $ 370,996.87
Brea, CA - _
,,Digital Telecommunications Corp.. $ 441,862.60
Sunland, CA
-LEIS Systems Inc. $ 464,510.71
Anaheim, CA
Data Plus Communications, $ 468,22623
Brea, CA
Verizon, $ 507,316.23
Norwalk, CA
Siemens $ 547,597.13
Cypress, CA
Bids Evaluated: A detailed evaluation of the three lowest priced bids was performed by
the consultant and staff. The evaluation revealed that Business Tel. Communications
Systems, the lowest bidder, failed to properly complete the financial section of the
required bid documents making it virtually impossible "to compare the financial section of
its bid with all others. Additionally Business Tel did not provide a total fixed price for
the project as required, did not include all required equipment components in its bid, nor
did it propose the required" operating software. Consequently its bid should be set aside
as non -responsive.
Standard Tel and Exp@Net, the next two lowest priced bidders, did in fact meet all
required specifications. Both companies offer reputable systems and aside from the
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nearly $3,000 difference in cost, about the only significant difference is that .Standard
Tel's Mitel SX 2000 telephone switch uses the same software for all its peripherals,
whereas the NEAX 2400 switch offered by .Exp@Net use different software for . its
peripherals. Staff prefers the single software approach since it simplifies our use of the
system.
Staff and the Consultant independently contacted Standard Tel's list of references and
seven of the eight organizations contacted (including the cities of Culver City, Hemet,
Lakewood, Rosemead, and Whittier) expressed very positive comments concerning both
Standard Tel and the Mite] SX 2000 telephone .system it has proposed. The Purchasing
Officer of the City of Manhatten Beach stated they had considerable problems with their
installation, however, subsequent information obtained by staff indicated the problems
were 'not caused by Standard Tel. Subsequent to -the evaluations, staff and the consultant
met with Standard Tel representatives and affirmed various aspects of the proposal In
sum both the consultant and staff recommend that the bid be awarded to Standard Tel, the
lowest responsive bidder.
DIDs to be added, City Hall numbers to change. As an integral part of the telephone
system replacement, -an additional 200 Direct Inward Dial (DID) telephone numbers and
additional trunk lines will be added to facilitate optimum system usage and reliability.
As previously 'reported to the City'Council, the addition of the DID numbers will require
that City Hall change its telephone number. Verizon has reserved'500 consecutive DID
numbers in the (626) 939 - 8400-8899 block. Thus, with the exception of City Yard, all
current 8400 and 8500 numbers will remain the same and only the three digit prefix will.
change from 814 to 939. The changes to the telephone numbers will go into effect at the
time of the cutover to the new system, which is expected during March 2002,
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FISCAL IMPACT.
When this CIP project was approved, it was envisioned that the system would be
purchased using a "lease -purchase" approach. The total cost of the entire system,
including consultant fees, new conduits and cabling, etc., was estimated to be $550,000.
$150,000 was approved in the current year's CIP budget, with .$100,000 required in each
of the next four (4) years. Based on the bids received, the total cost of the project is
expected to be well below the $550,000 amount.
An itemized listing of all costs expended or expected for the project is shown below:
Standard Tel bid price (less sales tax)
$ 346,735
Sales tax quoted
17,036
Additional sales tax eff. 01/01/02
532
Consultant fee
21,660
Installation of Roof Conduits
11,000
Conduit inspection City Hall — City. Yard
1,625
Bid advertising & Printing
135
Installation of 200 DID numbers & addl trunks
2,500
Contingencies
40,000
Total estimated project cost
441 223
As required by the RFP, Standard Tel offered a lease purchase approach. Using the
cash bid price (less the $17,036 sales tax quoted) of $346,735.00, it offered a 5 year loan
(60 monthly payments) at a fixed rate of 4.87%. Monthly payments would be $6,523.77
and the overall interest paid over the 5 years would be $ 44,691.20.
Based. on the revised estimated project cost, the amount needed to totally fund the project
is $291,000 ($441,223 - $150,000 approved). The Controller obtained quotes for a loan
of $291,000 for five years, and the interest rate of the least expensive quote was 3.53%,
which equates to a total debt service over the 5 years of $26,862.60.
Given the above quoted interest rate and our.current rate of return on investments, staff
believes it would more cost effective to fund the expected outstanding balance of
$291,223 from the existing Equipment Replacement Account (Fund 115) which currently
has a projected year end unobligated balance of $361,550.
RECOMMENDATION:
It is recommended that the City Council:
a. Approve the award of Bid # 1101-B for the replacement of the City Telephone
System to Standard Tel Business Communications Systems, Long Beach; CA
for a total price (including current taxes) of $ 364,303.00; and
b. Appropriate $291,223 from the Equipment Replacement Fund (Fund I l5) to
Account 115-320-3278-7160 to pay for the balance of the project.
Prepared by:
T. Keating
Interim Communications Director
Reviewed & A
Acting Finance
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