City of Royal Oak Inter-office Memorandum

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2 City of Royal Oak Inter-office Memorandum Date: 1/31/2007 To: Cc: SUBJECT: Tom Hoover, City Manager Dave Gillam, City Attorney Don Johnson, Finance Director Communication Services Bid Award Current contracts for communication services for the City of Royal Oak are expiring. The current three-year contract for local and long distance telephone service with McLeodUSA is expiring at the end of February 2007 and several T1 services are expiring shortly thereafter. The City advertised for bids on January 3, 2007 and we had a great selection of competitive quotes to choose from. The seven vendors are AT&T, Telegration Inc/Cavalier Business Systems, Level 3 Broadwing, XO Communications, McLeodUSA, CTS/Unitel and Mica Networks. The RFP requested vendors to provide contract commitment rates to cover month-to-month, 1 year, 2 year and 3 year term periods. After review of the proposals, the 3 year commitment rates will result in optimal savings of approximately $7,200 over three years for telephone service, and $500/month on point-to-point and T1 services. The accompanying bid summary is a comparison of the quotes for communication services to Royal Oak municipal buildings contained within our existing voice and data network system. While reviewing the bids, the City's current monthly calling averages and circuit costs were used for an accurate comparison to the rates quoted by each vendor. While each vendor has various strengths and weaknesses, appropriate levels of redundancy and routing capability are built into the services they provide. Error detection and service response times for the proposed solutions are satisfactory. We contacted references and received excellent responses. McLeodUSA is the overall low bidder for Local and Long Distance Telephone Service, Point-to-Point T1 connections and T1 Internet Service. McLeodUSA has successfully provided telephone services to the City over the last three years and we will be replacing our current T1 circuits with their lower cost T1 circuits. There is a lead-time of approximately 3-7 weeks to allow for ordering, scheduling, circuit design, and contract review/approval by the City Attorney's Office. Non-contracted rates at the end of the current contract are much higher than what we are currently paying, so it is imperative that we allow adequate time for implementing the T1 circuits prior to the contract expiration dates. If you agree, I recommend for City Commission approval, to accept the 3-year term proposal from McLeodUSA for Local and Long Distance Telephone Service, Point-to-Point T1 connections and T1 Internet Service, pending a successful contract review and approval by the City Attorney's Office. Respectfully Submitted, Scott L. Newman Manager of Information Systems

3 Monthly Avg McLeodUSA XO Communications Level 3/Broadwing AT&T Service / Plan / Category Calls Minutes Cost Qty Rates Cost Qty Rates Cost Qty Rates Cost Qty Rates Cost 1. Local & Long Distance Telephone Service PRI / ISDN T1's PRI 1 Recurring PRI 2 Recurring PRI 3 Recurring PRI non-recurring CLAR-Automatic Alt Routing included Calling Name included per trunk grp DID Number Charge: Local Calls: included Local DA (Directory Assistance) Michigan Local 28,000 74,000 0 included unlimited included Long Distance: LD DA (Directory Assistance) outside MI Intrastate 5,400 12, included Interstate 1, included Annual Minimum Commitment PSALI , Discounts: 15% % Miscellaneous Costs: E Contract Term: 3 year 3 year 2 year 3 years Problem Escalation and Contact Info: yes yes yes Provided Implementation Timeline: immediate 4 weeks 4-7 weeks Installation Fees: Waived Fee based credit over 2 months Waived none Taxes / Surcharges: Federal Excise Tax State Use Tax Oakland Co Tech Oakland Co Auth OP Federal Universal Service Fund End User References: good Utica-good Total of Local and Long Distance Service: 2, , , , , Page 1 of 4

4 Monthly Avg McLeodUSA XO Communications Level 3/Broadwing AT&T Service / Plan / Category Calls Minutes Cost Qty Rates Cost Qty Rates Cost Qty Rates Cost Qty Rates Cost 2. Point to Point T1 WAN Communication Service: Data Circuit Senior Center Data Circuit Ice Arena Voice Circuit Ice Arena Contract Terms: 3 year 3 year 2 year 3 years Installation Charges: waived Waived included Discount: 15% Total of WAN Communication Services: 1, , Managed Internet Service Term 3 year 3 year 2 year Monthly Cost T1 Speed dedicated 1.5Mbps dedicated 1.5Mbps dedicated 1.5Mbps (MIS) 1.5mbps Router Includes port, loop & router not included Cisco 1721 Installation Dynamic Integrated Access waived wavied Suport Fully Managed Other Features: 8 static IPs 10 accounts 100% availability 100% availability 99.99% Availability DNS Mgt < 1% pckt loss < 65 ms latency < 1% packet loss Online Control - Web hosting Core lateny < 50ms Latency < 55ms 100mb of disk space 1gb of bandwidth availability Add'l accts $1.00 ea Add'l disk $0.50 per mb Total for Managed Internet Service: Quoted all three services? Yes Yes Yes Yes Total for all 3 services: 3, , , , , Page 2 of 4

5 Monthly Avg Service / Plan / Category Calls Minutes Cost Telegration Telegration/Cavalier CTS/Unitel Mica Networks Qty Rates Cost Qty Rates Cost Qty Rates Cost Qty Rates Cost 1. Local & Long Distance Telephone Service PRI / ISDN T1's PRI 1 Recurring 490 PRI 2 Recurring 490 PRI 3 Recurring 490 PRI non-recurring CLAR-Automatic Alt Routing Calling Name 7.95 DID Number Charge: 150 Local Calls: Local DA (Directory Assistance) Local 28,000 74,000 0 Long Distance: LD DA (Directory Assistance) Intrastate 5,400 12, Interstate 1, Annual Minimum Commitment Discounts: 15% Miscellaneous Costs: E Contract Term: Problem Escalation and Contact Info: Implementation Timeline: Installation Fees: Taxes / Surcharges: Federal Excise Tax State Use Tax Oakland Co Tech Oakland Co Auth OP Federal Universal Service Fund End User References: Total of Local and Long Distance Service: 2, AT&T Solution Provider AT&T Solution Provider Cost NOT provided included unlimited DA not provided 10,000 minutes Included Cost NOT provided over 10k route to other service otherwise.042 / min. 3 years 3 years 3 year Yes, same business day Provided yes 4-7 weeks 1st 30 min waived Waived , , , Page 3 of 4

6 Monthly Avg Service / Plan / Category Calls Minutes Cost 2. Point to Point T1 WAN Communication Service: Data Circuit Senior Center Data Circuit Ice Arena Voice Circuit Ice Arena Contract Terms: Installation Charges: Discount: Total of WAN Communication Services: 1, Telegration Telegration/Cavalier CTS/Unitel Mica Networks Qty Rates Cost Qty Rates Cost Qty Rates Cost Qty Rates Cost years 3 year waived 1, Managed Internet Service Term Monthly Cost T1 Speed Router Installation Suport Other Features: 3 year 3 year mb MIS T-1 1.5Mbps Cisco 1841 or 2801 Cisco 2600 waived waived AT&T managed Service 99.99% Availability Name Registration Utilization Status Reports dns service 4 hour response Total for Managed Internet Service: Quoted all three services? Total for all 3 services: 3, Yes No Yes No 5, , , Page 4 of 4