Agenda Index City of Vancouver

ADMINISTRATIVE REPORT

RTS No. 02980

CC File No. 1805

TO:

Vancouver City Council

FROM:

Director of Information Technology in consultation with the Manager of Materials Management

SUBJECT: Supply and Deployment of Computer Equipment - Proposal No. PS02017 Award of Contract

 

RECOMMENDATION

GENERAL MANAGER'S COMMENTS

The General Manager of Corporate Services recommends approval of the above.

COUNCIL POLICY

Council's policy is to award contracts for the purchase of equipment, supplies and services that will give the highest value based on quality, service and price. Contracts with a value of more than $300,000 are referred to Council for award.

PURPOSE

The purpose of this report is to recommend that Council award a four-year contract to Microserve as the primary supplier of microcomputer and related peripheral equipment to the City. This recommendation is based on responses to a public process through Request for Proposal PS0201.

BACKGROUND

The City spends on average $2.75 million a year on the purchase of computer equipment, including desktop and portable microcomputers, monitors, printers, scanners, file and application servers, expansion memory and disk, networking devices, supplies, and other hardware and software items.

There are financial, administrative and support benefits to having a single supplier for all of these items, and this has been the City's practice for at least 10 years. A Request for Proposals (RFP) for a supplier of microcomputer equipment was last issued in 1996, and Council awarded a contract to Microserve. This contract has since been extended.

On May 28, 2002, Council approved the Information Technology Infrastructure 2002 Expansion and Replacement Program, which included a corporate desktop "refresh" - a three-year program to replace obsolete microcomputers and operating systems and to deploy a standardized suite of office productivity software. That report identified that, in view of the upcoming large volume of purchases, the City would issue a new RFP for a supplier of computer equipment, and would take advantage of the opportunity to review its desktop hardware standard.

After approximately four years, microcomputer equipment becomes functionally obsolete. Experience has shown that it has little residual value and that the administrative and staff costs of disposal typically exceed the value realized. Staff identified disposal of surplus equipment as a secondary objective of this RFP.

DISCUSSION

RFP PS02017 titled "The Supply and Deployment of Computer Equipment" was issued in July, 2002, and closed on August 14, 2002. It invited proponents to bid on a package of computer equipment and services which included:

· Supply of 3,200 desktop and 400 laptop computers;
· Deployment, re-deployment and decommissioning services;
· Disposal of surplus computers to the benefit of Vancouver-area schools, Community Associations and other not-for-profit organizations, and
· Supply of a representative shopping-basket of computer equipment, like monitors, printers, other peripheral items and non-Microsoft software (Microsoft software is purchased through a separate reseller).

The quantities quoted included only those items for which Council approved funding in the May 28 report, plus one year of projected acquisitions of maintenance-type hardware and software. The value of that equipment was estimated at approximately $5.0 million. This is unlikely to be the full value of equipment purchased during the period of the contract but provided a convenient and equitable basis on which to tender for a supplier. All purchases are contingent on Council approval of the funding beyond the levels currently in place.

The stated intent of the RFP was to establish a full-service provider with the ability to source and supply a wide range of equipment and to provide expert installation services as needed, but particularly during the initial 18-month desktop refresh project.

The market for this equipment is basically a commodity market. Prices fluctuate based on supply and demand, advances in technology, model changes and US exchange rates, so long term, fixed pricing is not a practical option. Instead, the City asked for a formula, based on margin-over-supplier-cost or discount-from-list-prices, that would hold throughout the contract, and based the financial aspect of the evaluation on current pricing.

Evaluation of Responses to the Request for Proposals

Seven proponents responded to the proposal call. Four of the proponents provided two proposals each, for a total of eleven proposals.

Both the proposal and evaluation processes were co-ordinated by the Corporate Services Materials Management Division. An evaluation team of five technology managers and specialists assessed all eleven proposals. The evaluation considered a number of areas that represent value to the City:

· proponent's technical resources, staffing and stability;
· breadth of product available;
· quality of order desk and product support services;
· sophistication of installation services proposed;
· specifications of desktop microcomputers proposed;
· warranty repair service;
· value-added services, and
· pricing.

The evaluation team short-listed the responses to five proposals from three proponents. These proponents were invited to meet with the evaluation team to clarify certain areas of their proposals, as a consequence of which the evaluation team further short-listed down to four proposals from two proponents, as identified below:

Only one of the non-short-listed proposals was priced lower than the four short-listed proposals. That proposal was eliminated because the price differential was not significant enough to offset the short-comings in other evaluation criteria compared to the proposals above. The highest overall rating was awarded to Microserve's IBM proposal, which was considered to offer best value to the City. Microserve:

· has demonstrated past strong service response and product knowledge;
· has local staff with training and experience relevant to the City's new software environment;
· is able to provide competitive pricing across the whole range of products and services needed by the City;
· is able to provide seamless service and logistics support in meeting the City's deployment goals, and
· has committed to working with a local not-for-profit agency to recycle the surplus computers to the benefit of the community.

Under the award and subsequent contract recommended in this report, equipment manufactured by IBM will continue to be the standard to be used in the City for at least the next four years and Microserve will continue to be the preferred supplier of computer-related goods and services.

It is administratively expensive and time-consuming to issue a Request for Proposals. If the City considers the pricing model still to be competitive and the services provided by Microserve to have been satisfactory over the four-year contract term, the contract will provide the City the option to renew the contract for a limited period as mutually agreed between the City and Microserve.

Disposal of Surplus Equipment

Under the proposed contract, Microserve has agreed to enter into an arrangement with Tradeworks, a not-for-profit society and registered charity. Tradeworks has provided journey trades and computer training in the Downtown Eastside (DTES) for over 10 years. They have a 16,000 square foot facility on East Cordova and will use the high volume of surplus equipment from the City to initiate a program called ReBoot, modelled after a successful similarly named program in Toronto. Under this program, trainees and graduates from the computer training program will refurbish surplus computer equipment and redistribute it at no charge to the Vancouver School Board and at a minimal refurbish charge to other not-for-profit organizations within the city. Tradeworks has also agreed to make a number of the City=s surplus computers available to Computers for Schools.

This arrangement is an excellent one:

· It offers job opportunities and supports skills development from a facility in the DTES;
· It realizes the City's goal of recycling surplus computers to the benefit of local schools and not-for-profit organizations;
· It releases the City from the onerous task of decommissioning and disposing of this equipment, the administrative cost of which exceeds the small residual value.

FINANCIAL IMPLICATIONS

There are no direct financial implications of this award, as all purchases made through the contract are subject to Council approval, and Council has already approved funding for minimum purchase quantities. The contract simply establishes a supplier.

Based on estimates of the purchases to be made by the City during the term of the contract, the total value of the contract is expected to be around $11 million, based on:

Nature of Purchase

Estimated Value (excl. taxes)

Approved by Council:

  

    IT 2002 Infrastructure Program (approved May 28, 2002)

$ 6.5 M

    2003-2005 Capital Plan (approved October 8, 2002)

$1.5 M

Subject to Council approval over the period 2003 - 2006:

 

    Maintenance-type purchases over the 4-year term (funded through departmental operating budgets)

$ 1.0 M

    IT 2003-2006 Infrastructure Programs (inc. 2005 and 2006 microcomputer replacements not included in the current desktop refresh)

$1.0 M

    2006-2008 Capital Plan (2006 purchases only)

$1.0 M

        TOTAL

$11.0 M

CONCLUSION

Award of this contract and confirmation of the City=s desktop hardware standard are key milestones in the City=s plan to refresh its microcomputer infrastructure, expected to commence in December of this year. By the end of this eighteen-month deployment, staff should be relieved of the frustrations of obsolete equipment and better able to serve the public.

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ag021105.htm

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