REPORT TO COUNCIL
SUBJECT
Title
Action on Amendment No. 1 to the Agreement with Packet Fusion, Inc. to Provide Support and Maintenance Services for the City’s Telephony System
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
The Information Technology Department (ITD) maintains a ShoreTel/Mitel Voice over Internet Protocol (VoIP) telephone system, with 1,000+ end users across all City locations and includes telephones, voicemail, automated call distribution, call recording capabilities, and enhanced features for the utility billing enterprise contact center. The system is a network of hardware and software including voice switches, gateways, voice and call center servers as well as routers that provide redundant calling paths to the outside. The system requires regular software updates, support and maintenance services from a certified ShoreTel/Mitel telephony vendor.
In October 2018, the City conducted a Request for Proposals (RFP) for telephony service, support and maintenance services for the citywide ShoreTel/Mitel VoIP telephone system. Through this process, Packet Fusion (PFI) was selected and awarded a five-year agreement which was approved by the City Council on February 19, 2019 (see Attachment 2).
DISCUSSION
Under the current agreement, PFI has implemented various upgrades to add functionality required by the City and to extend the useful life of the system. In 2021, PFI updated the system to the latest software version. Notably, PFI has been providing support to the Finance Department, utility billing call center. In 2021, PFI replaced the ShoreTel Enterprise Contact Center call center software with the new Mitel Contact Center (MiCC), and successfully defined the requirements and configured application programming interfaces (APIs) to allow customers make payments via phone. A project currently underway is the Customer Self Service (CSS) portal for utility billing, with PFI defining business process requirements and supporting system updates.
Packet Fusion have made significant upgrades to our system, adding longevity and functionality. It is in the City’s interest to leverage the existing platform and investment, especially while the VoIP industry is going through a maturity phase and changes to subscription-based cloud pricing models.
As noted, we have made significant investments in upgrading the system and adding functionality and customizations working with PFI. Onboarding a new service provider at this time will require a significant learning curve and pose risk to the mission critical nature of the system due to their lack of familiarity with the system. Considering current major projects and workload, staff resources are limited to provide support for such learning curve. PFI is integral in the support of the telephony system and is a key business partner in the completion of the Utility Billing Customer Self Service portal. With the future retirement of the system, which will be end of life in 2029, staff time would be best utilized focusing on developing the plan to replace the system in subsequent years. PFI’s knowledge of the system is crucial to ensure telephone communications are operational. Therefore, it is recommended that while we leverage our existing investments in the current system, we continue working with PFI for ongoing maintenance & support.
The current agreement with PFI has a maximum compensation of $326,670 and is set to expire on February 28, 2024. Staff recommends amending the agreement by extending the term by one year to February 28, 2025, with three one-year options through February 28, 2028, to encompass the warranty period of the MiCC and to allow for continuity of PFI’s support services.
Compensation under the agreement is listed in Table 1 below.
Table 1
|
Year |
Amount |
|
Year 1 Mitel Core UC Support Fee |
$ 45,334.00 |
|
Year 2 Mitel Core UC Support Fee |
$ 45,334.00 |
|
Year 3 Mitel Core UC Support Fee |
$ 45,334.00 |
|
Year 4 Mitel Core UC Support Fee |
$ 45,334.00 |
|
Year 5 Mitel Core UC Support Fee |
$ 45,334.00 |
|
Years 1 - 5 Additional Services/Contingency |
$100,000.00 |
|
Total (Years 1 - 5) |
$326,670.00 |
|
|
|
|
Amendment No. 1 |
|
Year 6 Mitel Core UC Support Fee |
$52,194.48 |
|
Year 7 Mitel Core UC and MiCC Support Fee |
$75,000.00 |
|
Year 8 Mitel Core UC and MiCC Support Fee |
$75,000.00 |
|
Year 9 Mitel Core UC and MiCC Support Fee |
$75,000.00 |
|
Years 6 - 9 Additional Services/Contingency |
$50,000.00 |
|
Amendment No. 1 Total |
$327,194.48 |
|
|
|
|
Total Maximum Compensation |
$653,864.48 |
Year 6 support fee is $52,194.48, representing a 15% increase from the previous year. Despite this increase, PFI has kept its pricing at $45,334 throughout the initial five-year term. Therefore, staff deems this increase fair and reasonable. A contingency of $50,000 has been included up-front in year 6 to cover the entire term including option years for unforeseen events such as emergency replacement of equipment or implementation/integration services not included in the support and maintenance activities. Year 7 - 9 support fee is higher with the addition of the MiCC support estimated at $23,000 per year. This fee includes ongoing maintenance and support for MiCC, performance reporting and API/integrations.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of a California Environmental Quality Act (“CEQA”) pursuant to the CEQA Guidelines section 15378(a) as it has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.
FISCAL IMPACT
The proposed amendment will extend support of the system for one more year and add three one-year options to extend maintenance and support with PFI at the City’s sole discretion. The cost of the extension through February 29, 2025, is $102,194.48; $52,194.48 for support services and $50,000 for contingency for a revised maximum compensation of $428,864.48. This reflects an increase over the current annual support services fee of $45,334 plus allocates contingency funds. The estimated annual amount for Options 1-3 is $75,000 per year. There is sufficient budget available in the Information Technology Department’s FY 2023/24 Operating Budget to absorb the increased cost in FY 2023/24. Future years of this agreement will be considered as part of the budget development process and subject to the appropriation of funds.
COORDINATION
This report has been coordinated with the Finance Department and the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Authorize the City Manager to execute Amendment No. 1 to the Agreement with Packet Fusion, Inc. for telephony system support and maintenance services to extend the agreement by one year through February 28, 2025, and increase the maximum compensation by $52,194.48 plus $50,000 as contingency for a revised not-to-exceed maximum amount of $428,864.48 in a final form approved by the City Attorney;
2. Authorize the City Manager to execute future amendments to add and/or delete services, subject to the maximum compensation limit and approval as to form by the City Attorney; and
3. Authorize the City Manager to execute up to three one-year options to extend the term through February 28, 2028, for a total maximum compensation amount of $653,864.48 assuming all options are exercised, subject to the appropriation of funds and approval as to form by the City Attorney.
Staff
Reviewed by: Gaurav Garg, Director/CIO, Information Technology Department
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. Amendment No. 1 with Packet Fusion
2. RTC 19-1607 and Executed Agreement with Packet Fusion, Inc.