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SR 05-23-2017 3D Ci ty Council Report City Council Meeting : May 23, 2017 Agenda Item: 3.D 1 of 5 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 - 2 of 5 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 3 of 5 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 4 of 5 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 . 5 of 5 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)