SR 03-26-2019 3K
City Council
Report
City Council Meeting: March 26, 2019
Agenda Item: 3.K
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To: Mayor and City Council
From: Joseph Cevetello, Chief Information Officer, Information Services
Department, Infrastructure and Cloud Services
Subject: Purchase Order for Network Infrastructure Equipment
Recommended Action
Staff recommends that the City Council authorize the Procurement Manager to issue a
purchase order to Zones, Inc, a Washington-based company, for the purchase of Cisco
manufactured network equipment and services that support City operations, for a period
of five years. This recommended award is made as an exception to the competitive
bidding process pursuant to Section 2.24.080(b) where competitive bid procedures have
already been utilized, such as in purchasing from Federal, State, County, City or special
district government agencies. The total amount of the purchase order over five years
will not to exceed $3,500,000, with future year funding contingent on Council budget
approval.
Summary
The City’s telecommunications network facilitates the delivery of all voice and data
services, and access to systems and applications utilized for City operations and
municipal services. Maintaining a reliable network is vital to ensuring the reliability of
City systems and network security. The core network equipment that supports
municipal services has not been replaced, is more than ten years old, and is no longer
supported by the manufacturer. Staff seeks approval to issue a purchase order to
Zones, Inc. for the purchase of new and replacement Cisco network equipment,
including licensing, maintenance and support on an as-needed basis in an amount not
to exceed $3,500,000 over a five-year period to reduce risk of network failures, mitigate
against security breaches, and ensure reliable service delivery.
Discussion
The City’s network supports the entirety of the City’s data and telecommunications
systems. This network facilitates data transfer, data storage, and provides the ability to
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maintain the City’s numerous computer applications, systems, and the programs vital to
providing reliable municipal services.
The City standardized on Cisco equipment for its network. The City currently spends
approximately $180,000 annually on Cisco licensing, maintenance and support
($900,000 over five years) and approximately $120,000 annually to replace access
layer equipment as it begins to fail ($600,000 over five years). The City has not
refreshed some of the core layer network components in over ten years and expects to
begin replacing this equipment over the next five years (estimated cost of $2.0 mill ion).
Having an established purchase order to procure replacement equipment and services
(as funding becomes available) on an as-needed basis would expedite the procurement
process and minimize network outages related to failing equipment.
Vendor Selection
Exception to Competitive Bidding
b. Item was already competitively bid by another governmental agency or is part of
cooperative purchasing with another agency, where item or services are supplied
at same price or better.
Staff recommends Zones, Inc. to furnish and deliver Cisco manufactured network
equipment and services as an exception to competitive bidding per Muni Code 2.24.080
(b), as this item was already competitively bid by another governmental agency or is
part of cooperative purchasing with another agency, where item or services are supplied
at same price or better. The bid number F-969 for IT Equipment, Supplies and Related
Services was publicly advertised via Port of Los Angeles’ online bidding site and via the
Los Angeles Business Assistance Virtual Network (LABAVN). Five bids were received
as a result of that process. Bids were publicly opened. Bids were received from Key
Information Systems, Technology Innovations Group, EnPointe, JB Holdings, and
Zones, Inc. Zones, Inc. was selected as the best bidder based on price and ability to
meet all requirements outlined in the bid. The award was approved by their governing
board, the LA Board of Harbor Commissioners on April 26, 2017.
Currently, the City bids out each Cisco equipment purchase on an as-needed basis. As
such, pricing fluctuates on each purchase and is inconsistent between vendors. By
leveraging the pricing structure established through the Port of Los Angeles’ bid, the
City will receive the equipment at the same or better price than the Port of Los Angeles
by 1% markup on hardware and 1.5% markup on maintenance and support from the
manufacturer price to Zones, Inc. This would result in an average 41 to 45 percent
discount off from manufacturer list price for hardware and 15 t o 20 percent off
maintenance and support.
Financial Impacts and Budget Actions
Staff seeks authority to award a purchase order with Zones, Inc. for the purchase of
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Cisco manufactured network equipment and services on an as -needed basis for a
period of five years.
Purchase Order Request
Request Amount FY 2018-19 Budget CIP Account# Total Contract Amount
$300,000 C7100020.689000
$300,000 C6004770.689000
$3,500,000
Future year funding is contingent on Council budget approval.
Prepared By: Al Dave, Software Systems Manager
Approved
Forwarded to Council
Attachments:
A. Oaks Initiative - Zones, LLC