01-22-2002 - Award of Bid 1101-B; Replacement of the City Telephone System; Supplemental Report0
January 22, 2002
TO: Andrew G. Pasmant, City Manager
and City Council
FROM: J. T. Keating
Interim Communications Director
• City of 'West Covina
Memorandum
AG NDA
ITEM NO. `I71
DATE 01/22/02
®PRINTED ON RECYCLED PAPER
SUBJECT: AWARD OF BID 1101-B; REPLACEMENT OF THE CITY
TELEPHONE SYSTEM; SUPPLEMENTAL REPORT
SUMMARY: This report reaffirms the staff recommendation made on January 8, 2602
that Bid # 1101B, for the replacement of the City's telephone system
(CIP'Project 02401) be awarded to Standard Tel Business
Communications Systems of Long Beach, CA, the lowest responsible
bidder, and that the remaining expected costs of the project be funded
by the Equipment Replacement Account..
BACKGROUND:
At the City Council's last meeting, staff recommended that the lowest bid received for
the for the replacement of the City telephone system, which was received from Bus. Tel
Systems of Corona, CA, 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 somediscussion, Council action on the matter was held over.
DISCUSSION:
In recommending that Bus. Tel's bid be set aside, staff provided five (5) separate reasons
for doing so, and while staff continues to believe that all of those reasons remain valid,
the essence of this issue can be summed up into 1,.which is that the Request For Proposal
(RFP) specifically required that the operating systems for the telephone switch and the
voice mail system be Windows NT or Windows 2000, and that an OS2 operating system
would not be accepted. That information was properly distributed to all prospective
bidders, including Bus. Tel. Bus. Tel chose not to acknowledge that requirement and
proposed a system that operates on OS2. Thus in fairness to both the prospective bidders
who attended the pre -bid meeting and did not bid on the project (perhaps for that reason),
And those that did comply with the requirements, staff believes Bus. Tel's bid should be
set aside as non -responsible. As an added note, staff did review Bus. Tel's bid
a second time and found additional discrepancies, each of which could be used as a basis
for disqualification. This second review also brought into further question, the true
overall cost of its bid.
City Council has authority to set aside bid.
Paragraph 17 of Section 1, the Instruction to Bidders, to the (RFP) is entitled "Rejection
of Proposals" and states "The City reserves the right to reject any and all proposals and to
waive any minor or technical discrepancies or irregularities. Proposals may be rejected if
they show any alteration of form, additions not called for, conditional bids, incomplete
bids, erasures, or irregularities of any kind." Thus the City Council's authority to
reject a bid is clear.
Why require Windows NT or Windows 2000 ?
The requirement to limit the telephone switch and voice mail operating systems to
Windows NT or. Windows 2000 was developed during the design phase of the project and
is based on a recommendation from both the City's IS system. manager and the Police
Department Service Group computer systems manager. To attain unified messaging
applications such as a -mails over the telephone, voice mail over e-mail, the telephone
system must be integrated with our other computer systems. We use Windows
NT/Windows 2000 in all other applications and that is what our people are familiar with.
Thus by limiting the operating system to Windows, we eliminate any potential integration
problems now and in the future, and the need for us to learn another operating system.,
All Bus. Tel issues addressed.
Attachment (1) to this report is a detailed response to all of the issues Bus. Tel.
mentioned in its letter of January 4, which was presented to the City Council at its last
meeting, both those comments relating directly to its bid response, and those
"extraneous" comments obviously intended to discredit the process. Staff suggests our
comments are self-explanatory and require no further explanation.
Independent peer review supports staff position. In addition to the above efforts, the
City Manager directed that an independent telecommunications consultant be engaged to
review the RFP and both Bus. Tel's and Standard Tel's bid. Staff asked Mr. Tim Peters,
President and CEO of Tech=Knowledge Inc., a Pasadena based Telecommunications and
Information Technology consulting firm to conduct that review. Mr. Peters has over 25
years experience in the telecommunications/information systems industry and is a well
respected telecommunications consultant. His report is enclosed as Attachment (2). In
sum, the report is self explanatory and emphatically reaffirms staff s assertions that 1) the
RFP is an adequate and complete document; 2) that Bus. Tel's bid contains significant
administrative and technical irregularities and should be set aside as non -responsible; and
3) that Standard Tel's bid meets the specifications of the RFP and should be awarded the
bid as the lowest responsible.bidder. Thus in sum, staff believes there is no need to rebid
the project and reiterates its original recommendation.
FISCAL IMPACT:
When this CEP project was approved, ti 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 rates and our current rate of return on investments, staff
believes it would be 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 yearend unobligated balance of $361,550.
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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'115-320-3278-7160 to pay for the balance of the project.
Prepared by: Reviewed & Ap�roved by:
Keatingrtie i hds
Interim Communication .Director Acting Fi nce Director
Attachment (1) Staff responses to Bus. Tel. Ltr of January 4, 2002
(2) Mr. Tim Peters ltr of January 7.1 , 2002
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Attachment (1) to Communications Director report of January 22, 2002
Staff Responses to issues mentioned in Bus. Tel System's letter of O1/04/02
1. Bus. Tel: Page 53 final pricing page is complete.
Staff response: Sec. 1.7 (page 2) of the RFP required ALL pages be completed,
not just page. 53. .
2. Bus. Tel: There was no line item for taxes on Page 53.
Staff response: True, sales tax info was to be inserted as the next to last item
on Page 52, the previous page. Completion of the form as
required would have addressed that issue and would have
assured the bidder that its response was complete and included
all required equipment and information.
3. Bus. Tel: Analog devices meant "faxes and modems" not single line
phones.
Staff response: What possible charge cbuld there be for connecting "faxes and
modems" since they are simply plugged into an outlet?
(Bus. Tel's response here is an weak attempt to conceal the fact
that it's bid stated that all analog devices would be connected on
a Time and Materials basis, where as the RFP required a fixed
price for all work.)
4. Bus Tel: Our DC UPS system is better.than what was required.
Staff Response: This is simply not true. The RFP required a 7.5 KVA AC UPS
system for City Hall, and a 2.0 KVA system at City Yard: Both
systems are to support not only the telephone system but other
systems at those sites. What Bus. Tel proposed was
significantly different, and yet.in Sec. 9.6 (which asked for
exceptions to the RFP) it stated "None Item 3, Page 3 of the
independent Consultant's report also addresses this issue.
5. Bus Tel: OS2 Operating System was "Desired" not required.
Staff Response: In short, if Bus. Tel had acknowledged Addendum #3, it would
have had to admit OS2 would not be acceptable and it could not
bid on the project.
The printed RFP stated Windows NT was a desired specification.
the question of whether OS2 could be substituted was raised
subsequent to the bidders' conference and on Nov. 29,
Addendum #3, a 3 page addendum to the RFP was compiled by
our Consultant and then both faxed and mailed to each
prospective bidders by staff. On page 3 of that Addendum 3,
Question 16, referenced that spec and said "Can the operating
system be UNIX or OS2?", and the answer was "NO, operating
systems shall be Windows NT".
There is a signature line on the last page of each Addendum.
Each Addendum was to be signed acknowledging receipt of the
entire Addendum, and further all Addendas were to be returned as
part of the bid response. Bus.. Tel included the 15` two pages of
Addendum # 3, but not the 3"d page, and that is why it is able to
point to page 41 of the RFP and say "We understood Windows
was just a desired criteria". If Bus. Tel had acknowledged
Addendum #3 in its entirety, as did all other bidders — then it
would have had to admit it could not bid on the project, pure
and simple.
Did Bus. Tel receive it? The cover sheet transmitted as page 1 of
Addendum #3 clearly stated that 3 pages were attached — and one
must assume that if a recipient did not receive the entire fax, then
it would have called and asked for a retransmission. Staff knows
that would not have been necessary, since our fax log for
November 29 clearly indicated 4 pages were transmitted without
error to Bus. Tel. Systems.
6. Bus Tel: . Our System is better
Staff Response: See Technical Issues, pg 3-4 of the Independent
Consultant's report.
7. Bus Tel: We were not given an electronic copy of the RFP.
Staff Response: True, no one was because we didn't want bidders to change
the specifications. We wanted an assurance that what we
read in a bid response was no different than what we
published. (And yet staff can show that in one of
highest priced bids, the RFP was altered to avoid answering
a critical cabling question.) We did receive 8 other complete
responses.
8. Bus Tel: Standard Tel provided a quote which staff should have
obtained from the Consultant.
Staff Response: Our senior technician did talk to a Standard Tel rep.in
September 2000 and obtained a verbal "ball park" quote on
system replacement. At that time staff was
attempting to refine the project costs to be included in our
CIP budget and we talked to a number of vendors and
service providers, long before we hired a consultant.
Staff is never going to rely on I source of info.
9. Bus Tel: The consultant has done business with Standard Tel before.
Staff Response:Our consultant has been in the. business almost 30 years, and
has consulted on some 12 systems in the past year. It should
surprise no one that he knows many vendors, particularly the
more successful ones.
10. Bus Tel: The City did not check our references.
Staff Response: True, once we found sufficient evidence to disqualify the
bid, we didn't see any point in checking further. We did
spend considerable time and effort reviewing Standard
Tel's bid, meeting with their personnel and checking its
references.
11. Bus Tel: What does the "' mean on the City's Dec 6 memo to file?
Staff Response: The Dec 6 memo was written immediately following the bid
opening and was intended simply to list all responses in the
ascending order of cost. The asterisk referred to a footnote
at the bottom of the page and said simply " Response did not
use required proposal form". It was intended as a reminder
that the itemized pricing was not where it was supposed to
be. (The Dec 6 memo is attached.)
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ATTACHMENT 1 PAGE 3
Memorandum
December 6, 2001
To: File
Subj: Responses to RFP 1101-B Replacement of the City Telephone System
At the bid opening at 2:00 pm today, bids for subject RFP were received from 9 separate
vendors as listed below:
Business Tel. Communications Systems $297,551.34*
Standard Tel $363,770.80
Ex nets, Tustin, $366,233.38
Transwest, Brea $370,996.87
Digital Tel communications Corp. Sunland $441,862.60
EIS Systems Inc. Anaheim $464,510.71
Data Plus Communications, Brea $468,226.23
Verizon, Norwalk $507,316 '23
Sieme'ns' $547,597.13
Y
J.T. Keating
• Response did not use required proposal form
cc: S. Sindelar, Purchasing. Officer
LJ
ATTACHME14T 2 TO.STAFF REPORT DTD,01/22/02
Tech/Knowledge, Inc.
Telecommunications and Information Technology Consultants
January 21, 2002
Mr. J. T. Keating
Interim Communications Director
City of West Covina
1444 West Garvey Avenue South
West Covina, CA 91793
Dear Mr. Keating-
The following report documents our review of the City's Request For Proposals Number
1101-13, Addenda 1, 2 and 3, and the bids received from Business Telecommunication
Systems, Inc. and Standard Tel, Inc., as well as appurtenant correspondence thereto.
Per your request, we will be in attendance at the City Council Meeting at 7:00 PM on
Tuesday, January 22, to brief the Council on our findings and recommendations.
If you or any other City Staff member have any questions regarding our review, prior to
that time, please do not hesitate to contact me personally at (626) 844-1000.
Yours Very Truly,
Timothy V. Peters
President & Chief Executive Officer
200 E. Del Mar Boulevard, Suite 300, Pasadena, California 91105 - (626) 844-1000 • (626) 844-1001 Fax
REVIEW OF CITY OF WEST COVINA REQUEST FOR PROPOSALS No 1101
B AND ADDENDA 1, 2 AND 3.
We have reviewed the above documents, and it is our opinion that they are fully adequate
and complete for the task intended. They are well within established telecommunications
industry expectations for such documents, and, in conjunction with the answers to bidder
questions provided by the Addenda, provide adequate information for proposers to
prepare a complete and accurate proposal.
We cannot express an opinion regarding the accuracy or completeness of the Addenda.
We had no participation in the events which led to their creation, nor have we reviewed
any record (if such a record exists) of the meetings and documents that led to their
preparation.
It is our .further opinion that the time allowed for the preparation of proposals, while
somewhat short by industry norms, still allowed adequate time to the potential proposers
to prepare complete and accurate proposals.
In summary, we cannot find any reason based on the procurement documents not to
proceed with the procurement process and procure a new telephone system for the City
based on the bids received.
REVIEW OF PROPOSAL SUBMITTED BY BUSINESS
TELECOMMUNICATION SYSTEMS, INC. (BTS)
Administrative Issues
Our review of the BTS proposal discloses a number. of administrative deficiencies, many
of which provide sufficient cause, in our opinion, to reject their proposal as non-
responsive. Many of these deficiencies were previously documented in the January 8,
2002 City staff report, and will not be reviewed here. Key deficiencies that we have not
seen noted elsewhere include:
• The City requires (Section I, Instruction 18) proposals be valid for at least
90 days from bid opening. BTS does not acknowledge this requirement,
and states explicitly on its pricing pages that proposals are only valid for
30 days.
• The City requires (Attaclunent 1, Section 1.8) that all addenda be
acknowledged in each bidder's proposal. The BTS response only
acknowledges Addenda 1 and 2.
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Tech/Knowledge, Inc.
• 0
• Throughout the BTS response to Attachment 1, they fail to acknowledge
sections and to provide required information, including data such as gross
sales, and State Contractor's License number. Several responses needed to
technically, evaluate the suitabilityof the system proposed for the City are
also not supplied.
• No unit pricing is quoted for digital telephone sets.
It is our opinion that these issues, particularly in concert with the deficiencies noted in the
Communication Director's letter of .December 26, 2001 and the January 8, 2002 staff
report to the City Council, justify the disqualification of the BTS proposal as materially
defective, and thus non -responsive..
Technical Issues
We also have serious technical concerns regarding the BTS proposal.
First, we can find no itemized equipment listing that demonstrates that Power Failure
Transfer units were actually included in the proposal. These devices serve as an
important "last ditch" tool to provide minimal communications service if a system is
unable to process calls due to a complete loss of power or other catastrophic system
failure. They are referenced in drawings provided by BTS, but are not shown anywhere
in the detailed equipment listings they provided.
Second, seismic bracing is apparently not provided in the BTS proposal. While not
explicitly required in the proposal, it is always good engineering practice to provide these
auxiliary support components for, all floor -mounted components in life -safety -sensitive
applications, such as a municipal telephone system. These elements are provided in the
Standard Tel proposal.
Third, BTS fails to provide an Uninterruptible Power Supply (UPS) for City Hall and the
City Yard sites. The DC power alternative quoted by BTS does not meet the design
intent of the RFP, as the intent was to utilize this UPS to power additional 'in -place
equipment already owned by the City. While the DC solution quoted is optimal for the
product proposed by BTS, it does not meet the actual need of the City which was clearly
expressed in the bid document and addenda.
Fourth, the voice processing system quoted by BTS does not utilize either of the
operating systems specified by the City, Windows NT or Windows 2000. Tile OS/2
system proposed by BTS is little -used in today's marketplace, and its long-term future is
quite foggy. Further, supporting this system would require City Staff to acquire skills
they do not currently possess, and ultimately purchase software tools they do not
currently own -- all to, manage technology with a questionable future. Also, as this
system will be a key element in a unified messaging strategy, we are concerned about
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Tech/Knowledge, Inc.
potential integration issues with other existing City messaging tools based in the
Windows environment.
Finally, our greatest concern. The system proposed by BTS does not provide for any
standalone operational capability for the City Hall equipment in the event of a failure of
the system at the Police Department, or of the fiber link between them. A failure of the
single system at the Police Department would wipe out all telephone service to the Civic
Center complex.
The product literature supplied with the BTS proposal indicates that an "Optional
processor at the remote location for standby operation in the event of fiber optic failure"
can be provisioned. A conversation at 12:05 PM, January 17, 2002 with Lindsay Kittner,
Director of Product Management with ECI Telecom, the manufacturer of the system,
indicated that while the remote shelf could be configured to process calls on a standalone
basis following the failure of a hub, it would require extensive intervention by trained
technical personnel to complete the transition. This intervention would include' the
physical removal of the fiber optic interface card from the system, the installation 'of a
processor card in the system, and the manual uploading of system database from an
external computer. This extensive degree of intervention is, in our opinion, simply not
acceptable in a public safety environment. Further, as best as we can determine there is
no evidence that BTS even proposed the requisite hardware in their bid.'
By comparison, the Standard Tel proposal has a complete, frilly networked switch at the
City Hall location, and basic call processing functions would not be impacted by a failure
of any other location.
RECOMMENDATIONS
It is our opinion that the City's Request For Proposal No. 1101-B is an appropriate tool
for City Staff to have used to obtain proposals for a new City Telephone System, and that
the City consider the responsive proposals received thereunder.
Given the many administrative and technical issues described above, we recommend: the
City set aside the proposal received from Business Telecommunication Systems, Inc. as
non -responsive, and award the project to Standard Tel, Inc., as the lowest responsive
bidder.
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Tech/Knowledge, Inc.
About Tech/Knowledge, Inc.
Tech/Knowledge, Inc., founded in 1984, is a management consulting and information
technology engineering firm specializing in voice and data communications, information
technology, service delivery and mobile communications. The company provides
objective and' impartial advice and implementation assistance to both the public and
private sectors, with over 500 private sector clients and 150 public sector clients.
We have earned an outstanding reputation for serving organizations in all major segments
of the economy. Functional areas include government, transportation, manufacturing,
commerce, health care, banking, public utilities, insurance, education, securities" and
commodities, and service organizations. Among our many clients are the State of
California, the State of Oregon, several Federal agencies, Microsoft Corporation, Metro
Goldwyn Mayer, South Coast Air Quality Management District, Jet Propulsion
Laboratory, United Airlines, and Apple Computer.
Tech/Knowledge has offices in New York, Jacksonville, San Rafael, Sacramento and San
Diego in addition to its headquarters in Pasadena, California.
Current/recent projects include a Long -Term Wireless Communications Plan for the City
of San Diego, a new telephone system and data communications network for Metro -
Goldwyn -Mayer, security communications design for the Jet Propulsion Laboratory,
telephone system planning for the Orange County Transportation Authority, and a
microwave system procurement for the Golden Gate Bridge, Highway and Transportation
District.
About Timothy V. Peters
Timothy V. Peters is President and Chief Executive Officer of Tech/Knowledge, Inc. He
has a broad range of telecommunications and information technology experience. His
career, spanning over 25 years in the industry, includes senior positions as both vendor
and user. Mr. Peters has direct experience in many areas, including PBX/Centrex design
& implementation; Network design and optimization; Integrated voice/data
communications systems & networks, Call Center system operation and management;
Transmission technologies including Fiber Optics, Microwave and Infrared; Very Small
Aperture Terminal (VSAT) satellite networks; Public safety communications systems
including basic and enhanced 911 systems; Mobile/personal communications equipment
and systems, and security/life safety system design and implementation.
Since joining Tech/Knowledge, lie has completed a wide array of challenging
assignments, including:
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Tech/Knowledge, Inc.
• Development of telecommunications and/or information . technology
strategic plans for over 40 clients in both government and business.
• Design, acquisition and implementation of a 30-node, 200 mile, 4.8
Gigabit per Second fiber-optic network for a large software firm
• Computer hardware acquisition and management of software development
for the complete restructuring of a 1500-employee regional governmental
agency
• Strategic and tactical needs analyses of the telephone, data and radio
communications requirements, and information processing and technology
demands of the emergency operations organization of one of the nation's
largest cities
• An evaluation of call center platforms for a 10-site, 2000+ agent
worldwide software support environment
Mr. Peters holds a Bachelor of Science in Electrical Engineering from California State
Polytechnic University at Pomona, and a Certificate in Emergency Management from
California State University 'at Los Angeles. He holds 22 product -specific training
certifications from 9 different equipment manufacturers, as well as a General
Radiotelephone License issued by the Federal Communications Commission. He is a
member of the Society of Telecommunications Consultants. .
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Tech/Knowledge, Inc.