SR 05-23-2017 3D
Ci ty Council
Report
City Council Meeting : May 23, 2017
Agenda Item: 3.D
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To: Mayor and City Council
From: Joseph Cevetello, Chief Information Officer , Information Systems
Department, Systems and Networks
Subject: Services Agreement for Citywide Internet Telephony Services
Recommended Action
Staff recommends that the City Cou ncil:
1. A ward RFP#102 to Windstream Communications, an Arkansas -based company,
to provide citywide Internet Telephony service
2. A uthorize the City Manager to negotiate and execute an agreement with
Windstream Communications, in an amount not to exceed $202,000 for three
years, with 2 -additional 1 -year renewal option(s) in the amount of $135,000, on
the same terms and conditions for a total amount not to exceed $337,000,
including 10% contingency over a 5 -year period, with future year funding
contingent on Council budget approval .
Executive Summary
T he City uses a Voice over Internet Protocol (VoIP) based telephony services for all
voice communications and business telephone lines. The service is essential for
communicating with the public, vendors, and other entities for the purposes of
conducting City business. All telephone calls to and from City business lines are routed
to the Public Switched Telephone Network (the national, regional, and local telephony
infrastructure and services for public telec ommunication), using Internet Telephony
services currently provided by Windstream Communications. The current agreement
with Windstream Communications terminates in June 2017. Staff conducted a
competitive bidding process in February 2017 to select a ser vice provider for a new
multi -year agreement. Windstream Communications was the only company that
submitted a bid as a result of the bid process . Under Windstream’s proposed b id
pricing , the City will achieve an estimated 3 0% savings off the monthly usag e charges
(pre -tax and excluding surcharges ), as compared the prior agreement . The proposed
pricing also includes bundled minutes, which will help to ensure that City usage charge s
remain relatively level , irrespective of variances in usage. At this time , s taff
recommends Windstream Communications for a new three -year agreement , with two
additional 1 -year renewal options at a total cost not to exceed $337,000, including 10%
contingency .
Background
I n May 2011, the City published a Request for Proposal (R FP) to s olicit bids for Internet -
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based t elephony service. Windstream Communications (then Paetec) was the only
provider that could accommodate the RFP requirements and deliver the bundled local
and long -distance service with a cost/benefit ratio favorable to the City. Windstream
was selected as the best bidder, based on price and their ability to deliver a solution that
incorporated the City’s fiber -optic network.
In December 2011, the City entered into a service agreement with Windstream
Communicat ions to provide Internet -based t elephony service for all local and long
distance calling services for all City facilities. The new service, at that time, replaced a
conventional wireline -based t elephony service from Verizon, resulting in substantial
annual sa vings. Since its original execution, the agreement was modified twice , once in
2012 and again in 2013 , to expand the scope of work and increase the contract amount.
On May 27, 2014 (Attachment B ), City Council approved a third modification to the
agreeme nt to renew the Internet telephony service for an additional three years through
June 2017. This resulted in a five -year amended agr eement with total contract amount
not to exceed $322,920.
The City has used an Internet -based telephony service for all lo cal and long distance
calling services from and to City facilities since 2011. The VoIP -based telephone
system requires access to the Public Switched Telephone Network (PSTN) for
telephone calls and fax transmissions to and from the City’s business lines. This
includes local, long distance and international calls that are routed to the PSTN via
Internet -based telephony service. The City’s published and unpublished telephone lines
are hosted by Windstream Communications. The telephony service is essentia l for all
voice communications with the public, residents, visitors, staff, vendors and others who
use City services. All customer contact center calls, such as those received by City
Hall’s main information line, Big Blue Bus customer service, Building a nd Safety, Code
Enforcement, Water Utilities, Resource Recovery & Recycling, and others are routed
through the current telephony service provider.
The term of the current agreement with Windstream Communications will expire in June
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2017. Therefore, it i s critical that the City enter into a new agreement for Internet -based
telephony services to ensure business continuity. Staff conducted a competitive bidding
process in February 2017 and as a result, recommends that Council award the bid and
authorize a new contract to Windstream Communications .
Discussion
T he approach to utilize the City’s fiber -optic network as a way to transport telephony
services over the Internet has been a forward -thinking strategy and a proven cost
saving model since 2011. The C ity’s fiber extends to One Wilshire telecommunications
colocation facility in Downtown Los Angeles. This facility is an important
telecommunications hub for the region, which the City leverages as a part of a broader
strategy for its Information Technolog y (IT) business continuity and disaster recovery
plan. The City uses its presence at One Wilshire as a conduit to its colocation data
center facility in Las Vegas for disaster recovery; for access to Internet service providers
(ISPs); to connect to the IC I (interagency communications interoperability) regional
network for public safety radio communications; to provide access to broadband for
Community Broadband customers; and, as a way to connect to the Public Switched
Telephone Network (PSTN) for Internet telephony service.
The RFP issued in February 2017 requested that interested Internet telephony service
providers present options to provide Internet telephony services at the following three
facilities: 1) from the One Wilshire facility in Los Angeles, 2) at the City’s disaster
recovery data center in Las Vegas, NV, and 3) at the City’s main data center in Santa
Monica. These requirements are essential, as the current services for Internet
telephony are available through all three facilities, which pro vides the City geographical
diversity essential for its business continuity plan. During the RFP process, the City
received and responded to questions from potential vendors who enquired about the
requirement to offer Internet telephony service out of the Las Vegas data center facility.
The facility in Las Vegas is key to the City’s current disaster recovery and business
continuity plan, which includes telephony services .
Vendor/Consultant Selection
O n February 10, 2017, the City published a Request for Proposals (RFP) for providing a
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reliable Internet Telephony service in accordance with City specifications. The RFP was
posted on the City's on -line bidding site, and notices were advertised in the Santa
Monica Daily Press in accordance with City Charter and Municipal Code provisions.
1,438 vendors were notified, 44 vendors downloaded the RFP and one firm responded.
Staff believes that the RFP requirement to connect to Las Vegas may have precluded
some of the other service providers from submitting proposa ls. The only respondent
was the incumbent, Windstream Communications. Under Windstream’s new proposed
pricing, the City will achieve an estimated 30% savings o ff the monthly usage charges
(pre -tax and excluding surcharges), as compared the prior agreement . The proposed
bid pricing also includes bundled minutes, which will help to ensure that City usages
charges remain relatively level , irrespective of variances in usage. The bid response
was reviewed by a selection panel of staff from the Information Sys tems Department.
Evaluation was based on the following selection criteria: implementation services and
approach to project delivery, experience, references, work plan, project timeline, and
cost. Staff then conducted an interview with the RFP respondent. Based on this criteria
and criteria in SMMC 2.24.072, staff recommends Windstream Communications to
provide Internet Telephony service based on the firm’s expertise delivering enterprise -
class data, voice and network solutions; experience with similar pro jects; service
reliability based on prior City projects; and, competitive pricing structure, as mentioned
above, the proposed monthly usage charges are 30% lower than currently being paid
and includes bundled minutes, which will help to ensure that the cos ts remain relatively
level , irrespective of variances in usage .
Financial Impacts and Budget Actions
T he agreement to be awarded to Windstream Communications is for an amount not to
exceed $337,000. Funds of $67,333 for the first year of the contract ar e included in the
proposed FY 2017 -18 Capital Improvement Program budget. The agreement will be
charged to account M55000614.589000. Future year funding is contingent on Council
budget approval .
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Prepared By: Sarkis Metspakyan, Systems & Network Manager
A pproved
Forwarded to Council
Attachments:
A. OAKS INITIATIVE FORM - Windstream
B. May 27, 2014 Staff Report (web link)
DocuSign Envelope ID: 7F68FA61-59DF-4682-8C2B-EE2B79F2D533
None
636-812-3053
Please see attached.
Vice President - Customer Advocacy
Windstream Services, LLC on behalf of itself and its
Affiliates
Aaron.Hepburn@windstream.com
4/26/2017
Aaron Hepburn
WINDSTREAM OFFICERS
President & Chief Executive Officer Tony Thomas
Chief Financial Officer Robert E. Gunderman
Executive Vice President, General Counsel & John P. Fletcher
Chief Human Resources Officer
President – Consumer & SMB Sarah Day
Vice President – Controller John C. Eichler
President – Carrier Michael Shippey
Senior Vice President – Gover nment Affairs Eric Einhorn
Senior Vice President – Treasurer Christie Grumbos
Senior Vice President – Corporate Secretary Kristi M. Moody
Vice President – Tax Willis Kemp
Vice President – Investor Relations and Assistant Treasurer Mar y Michaels
Executive Vice President – Chief Information Officer Lewis Lang ston
Executive Vice President – Enterprise Sales Jeff Howe
Executive Vice President – Netwo rk Deployment & Management Mark Faris
Senior Vice President – Access Drew Smith
Senior Vice President – Carri er Services Joe Scattareggia
Senior Vice President – Enterprise Operations Rick Hausman
Senior Vice President – Process D evelopment & Support Kevin Hal pin
Senior Vice President – Strategy , Corporate Development & FP&A Matt Dement
Senior Vice President – Interne t Protocol Engineering Mike Hoyt
Senior Vice President – Tr ansport Engineering Ron Bayer
Senior Vice President – Carri er Operations Beth A. Lackey
Senior Vice President – Consume r, Small and Medium-Sized Busine ss Theresa Weiland
Vice President – Law Carol Keith
Vice President – Internal Audit & Chief Compliance Officer Rodn ey Hawkins
Region Vice President - Operations Barry Bishop
Region Vice President - O perations Phillip Peterson
Director – Regulatory Reporting Tim Loken
Head of Engineering Jeff Small
REFERENCE:
Contract No. 10460
(CCS)