May 18, 2004

SUBJECT: Award of Bid No. F0312-37 to Upgrade the City's Computer Network Infrastructure

Approval is requested for the award of a contract to SBC California of San Jose to upgrade the City's network infrastructure for the Information Technology Department (ITD).

The City's network needs have grown since the existing network infrastructure was installed in FY 1994-1995. Today, City staff heavily relies on the network to deliver critical services and access information through the Internet and a variety of client-server and web-based applications. All departments use the network to communicate through electronic mail and to deliver services through applications residing on the network. Response time, therefore, is critical to efficiently deliver these services and access information. These demands will only increase in the future as the City proceeds with electronic commerce, web-based applications, and Internet-based Public Library access.

The existing network hardware is almost ten years old. The outdated hardware cannot handle the combination of technological advances in security and the increased network traffic developed over the past nine years. If there is a problem with one of the existing network devices, it will be difficult to repair and/or replace the equipment, resulting in downtime for staff who rely on the network to deliver critical and essential City services. In addition, the current network infrastructure is designed so that all network traffic is broadcast across the entire network to all PCs on the network. Data is currently being delivered at a speed of 10 megabits per second with a stop at each location on the network, a design that made sense when the infrastructure was installed as most computing activities were local to the PC and particular site.

ITD has developed a new network design so that data only goes to the desired destination, not to each PC on the network, which means that the information will be delivered at a speed of at least 100 megabits per second (10 times faster than the current network) up to 1 gigabit per second. The new infrastructure will offer built-in redundancy at the core and will be fault-tolerant. If one of the core switches has a problem, the network traffic will be automatically re-routed to the second core switch to provide seamless and uninterrupted network facilities for City staff to continue to deliver services. The new network infrastructure will also offer increased security through the network management software that monitors traffic flow.

Bid specifications for the new system were developed by ITD and Purchasing staff. For the network upgrade, ITD staff reviewed manufacturers of routing and switching equipment and selected Cisco products for compatibility with existing City equipment, physical space limitation, single vendor network management considerations, and manufacturer market share. The specification package was distributed to seven Bay Area Cisco resellers and broadcast to potential suppliers through DemandStar by Onvia procurement network. Thirty-two firms requested bid documents.

Sealed bids were publicly opened on April 21, 2004. Seven bids were received.

The low bidder, Fusion Storm, failed to add sales tax (approximately $30,000) to its bid total and asked that its bid be withdrawn. The bid pricing for the second low bidder, Norstan Communication, was contingent upon the City's purchasing a telephone system which was not part of the bid specifications. This bid is, therefore, non-responsive and cannot be considered. Staff recommends awarding a contract to SBC California of San Jose, the lowest responsive and responsible bidder.

The project costs are, as follows:

Funds are available in Capital Project #824150 - Network Infrastructure. It should be noted that this contract is for equipment, software and support services only. Installation will be performed by City staff.

It is recommended that Council:

1. Award a purchase order, in substantially the same form as the attached draft and in the amount of $374,692, to SBC California for the Network Infrastructure Upgrade Project; and

2. Approve a contingency in the amount of $56,204

Prepared by:

Elaine Wesely
Purchasing Officer

Reviewed by:

Mary J. Bradley
Director, Finance


Reviewed by:

Shawn Hernandez
Director, Information Technology

Approved by:


Amy Chan
City Manager

Draft Purchase Order DP001602 (.pdf Format)