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01-22-2002 - Award of Bid 1101-B; Replacement of the City Telephone System; Interim ReportCity of Vest Covina Memorandum January 22, 2002 AGENDA TO: Andrew G. Pasmant, City Manager ITEM NO. j_' 1 and City Council DATE 1122102 FROM: J. T. Keating ® PRINTED ONE RECYCLED PAPER Interim Communications Director SUBJECT: AWARD OF BID 1101-B; REPLACEMENT OF THE CITY TELEPHONE SYSTEM; INTERIM REPORT SUMMARY: This is to serve as an interim report to the City Council pending completion of a peer review of the Request For Proposals (RFP) and selected bid responses, as explained herein. A final report will be forwarded to the City Council by the close of business on Monday, January 21, 2002. BACKGROUND: At the City Council's last meeting, staff recommended that the lowest bid from Bus. Tel. Systems of Corona, CA for the replacement of the City telephone system be set aside as non -responsible, and that the bid be awarded to Standard Tel of Long Beach. Representatives of Bus. Tel addressed the City Council, and after some discussion, Council action on the matter was held over. DISCUSSION: While staff continues to believe, and is fully prepared to support its assertion that Bus. Tel's bid should be set aside as non -responsible, the comments made by the Bus. Tel representatives at the January 8 meeting brought into question the clarity of the RFP and whether Bus. Tel's solution was superior to that proposed by others. To resolve that issue, at the City Manager's direction, an independent consultant has been asked to conduct a peer review of the RFP and both the Bus. Tel and Standard Tel's response. His report is not expected until noon on Monday, January 21. Upon its receipt, it will' be reviewed by staff and a final report will be prepared and delivered to the City Council' by Monday afternoon. A copy of the January 8, 2002 staff report is attached for the City Council's information. RECOMMENDATION: It is recommended that the City Council receive and file this interim report. Prepared by: i. /� • T. Keating Interim Communications Director Encl: (1) January 8, 2002 'staff report re: Award of Bid 1101-B; replacement of the City Telephone System City c f'A,�st Covina r Memorandum January 8, 2002 AGENDA TO: Andrew G. Pasmant, City Manager ITEM NO. C-4e and City Council 1/8/02 DATE FROM: J. T. Keating, ®PRINTED ON RECYCLED PAPER Interim Communications Director SUBJECT: AWARD OF BID #1 I01-B; REPLACEMENT OF TILE CITY TELEPIIONE 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 f6nded 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 provide 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: I 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"' floor, south side of City Hall across the roof to the -north side, in order to provide new service to the north side of Moth the 2nd and 3' 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 Business Tel. Communications Systems Corona, CA Standard Tel Long -Beach, CA Exp@Net Tustin, CA Transwest Brea, CA Digital Telecommunications Corp. Sunland, CA EiS Systems Inc. Anaheim, CA Data Plus Communications, Brea, CA Verizon, Norwalk, CA Siemens Cypress 'CA Total Cost $ 297,551.34 $ 363,770.80 $ 366,233.38 $ 370,996.87 $ 441,862.60 $ 464,510.71 $ 468,226.23 $ 507,316.23 $ 547,597.13 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 TO and Exp a Net, the next two lowest' priced bidders, did in fact meet all required specifications. Both companies offer reputable systems and aside from',the 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 Mitel 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. 2 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. 61/01/02 532 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 & add] 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 115) to Account t 15-320-3278-7160 to pay for the balance of the project. Prepared by: T. Keating Interim Communications Director Reviewed & A i by: Artle�(. iJieldsV Acting Finance Director