Approval of Public Contract Greater than $75,000 - QWEST, Internet Bandwidth
|Meeting Date:||Meeting Date:||Primary Staff Contact:||Lee Tuneberg|
|Department:||Finance - Purchasing||Email:||email@example.com|
|Contributing Departments:||Ashland Fiber Network||Secondary Staff Contact:||Richard Holbo|
|Estimate Time:||20 Minutes|
This action is to request City Council, as the Local Contract Review Board, to accept the 24-month agreement with Qwest to provide internet bandwidth and a local loop connection from inside the AFN headend control room to the Qwest data network.
Under the Ashland Municipal Code, public contracts for internet bandwidth are exempt from the competitive process; therefore, services for internet bandwidth can be awarded directly through negotiations with the service provider.
AMC Chapter 2.50.070 Formal Competitive Selection Procedures-Exemptions.
Contracting for bandwidth has been difficult and irregular for the City of Ashland and its AFN service. From the time that bandwidth service was first procured the telecommunications industry has changed dramatically and so have the suppliers of, and costs for, this commodity.
In four years costs for needed bandwidth have dropped from nearly $250,000 per year with limited choices to approximately $104,000 per year from two suppliers. Ashland has gone from one supplier, to contracting with as many as five providers and even to no contract thus getting service on a month-to-month basis.
The current purchasing rules exempt bandwidth from bidding yet annual contracts will have a significant price per year and Ashland's purchasing rules require the contract come to the LCRB for approval. AFN currently is utilizing two suppliers for bandwidth - a February, 2005, contract with Hunter for 30 megabits at $3,000 per month and Qwest for 45 megabits at $6,500 per month.
Attached is the contract struck with Qwest for service beginning this fiscal year. This contract was negotiated to provide needed bandwidth, obtain important cost savings and resolve service issues and liabilities with Qwest. A contract was not finalized between Qwest and Ashland in 2003 resulting in a potential violation of our purchasing procedures and an operational vulnerability that lasted nearly two years.
This agreement should have been brought to Council in August for approval however Qwest required immediate submittal in order to guarantee the lower price and level of service. Getting a legible version from Qwest for Council review also delayed presentation.
The services being provided by Qwest provide the City a redundant but necessary separate local loop connection that terminates directly in the AFN headend control room. The Qwest connection provides additional internet bandwidth and secondary coverage - separate loop connection - if there is an internet outage across the fiber line from Ashland to Medford.
Even though exempt from the competitive process, quotes were requested from several suppliers for Internet Bandwidth. Qwest was the lowest bidder at $78.22/Mbit and Hunter Communications was the second lowest bidder at $100/Mbit. The department feels strongly at this time that it is in the City's best interest to have two sources for Internet Bandwidth.
The Qwest DS3 local loop connection is $3,000 per month, $36,000 per year. For a business the size of AFN, It is a standard practice in the industry to have a minimum of 2-3 separate isolated transmission lines. The Qwest DS3 line is located underground and the AFN fiber line to Medford is located overhead. In the recent past, a fire in Medford destroyed the AFN fiber overhead line, and the Qwest DS3 local loop underground connection enabled AFN to continue providing high speed internet and data services. The department feels strongly at this time that the City must have a minimum of two means of receiving Internet Bandwidth.
|Related City Policies:|
AMC Chapter 2.50.060 (2) The Purchasing Agent is authorized to recommend that the Local Contract Review Board approve or disapprove contract awards in excess of $75,000, or to change orders or amendments to contracts of more than $75,000.
Local Contract Review Board can approve the public contract or decline to approve the public contract.
Staff recommends that the public contract with Qwest for internet bandwidth and local loop connection be approved based on the written findings.
Local Contract Review Board moves to award the public contract.