Recommendation for New Telephone System for City Buildings
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CITY OF DUBUQUE, IOWA
MEMORANDUM
November 29, 2000
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Recommendation for a New Telephone System
Request for Proposals were reviewed for a new telephone system for City buildings. Cable
Franchise Administrator Merrill Crawford is recommending the selection of Midland
Communications, Inc.
This recommendation is based on review by a staff committee, work with a telephone consulting
firm, Elert & Associates, and additional information gathered from site visits and references.
An estimated equipment cost of $354,044 will be included in the FY-2002 Capital Improvement
Project budget. The estimated annual savings for operation of the system is $50,000.
I concur with the recommendation and respectfully request Mayor and City Council approval.
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Tim Moerman, Assistant City Manager
Merrill Crawford, Cable Franchise Administrator
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CITY OF DUBUQUE, IOWA
MEMORANDUM
November 27, 2000
MEMO TO: Michael C. Van Milligen, City Manager
FROM: Merrill Crawford, Cable Franchise Administra~
SUBJECT: Recommendation For A New Telephone System
INTRODUCTION: The purpose of this memorandum is to report on the work of the Telephone
Proposal Review Committee and to offer the Committee's recommendation that the City accept
the proposal of Midland Communications, Inc. for a new telephone system for City buildings.
BACKGROUND: For a number of years, the City of Dubuque received local telephone service
(including interoffice calling features) from Qwest Communications (previously Northwestern
Bell and US West), in a package called "Centrex" (or "Centron" or "Centrex Plus").
Generically speaking, "Centrex" means that all of the interoffice switching and related features
are hosted in the telephone company's switch. Except for desktop telephones, there is no
telephone equipment owned by the City or located in City buildings. Every phone has a direct
line back to the telephone company, and each added phone requires its own new line. Centrex
has been a very functional service for the City, but it has not kept pace with other technologies
and can not offer certain useful features which have become commonplace in other systems.
This is due in part to the centralized nature of the system and in part to Qwest's antiquated
central telephone switch serving the Dubuque area. Qwest has reported their intention to replace
the analog switch with a Nortel DMS-I00 digital telephone switch in Mayor June, 2001.
The most recent Centrex contract with Qwest expired in July, 1999. The telephone company
honored the expired contract rates for one additional year, but has now implemented a significant
rate increase.
Telephone Proposal Review Committee
On March 23, 1999, you appointed a telephone proposal committee in accordance with
Administrative Policy No. 3.17, "Contractual Services Procurement", to develop and issue a
Request For Proposals for a new telephone system for City buildings, and to evaluate the
proposals received.
In May, 1999, a Request For Proposals was issued for consulting services to help the Committee
with its assignment. Elert & Associates of Stillwater, Minnesota was subsequently hired for this
purpose. The Committee has since worked extensively with Lynn Lingle and Tom Pavek ofthe
Elert firm, whose experience and insight have proven invaluable.
The Committee and our consultants surveyed all City departments through questionnaires and
personal site visits, and inventoried existing telephone instruments, services, problems and
needs. We also reviewed current telephone bills and other records, and investigated the nature
and schedule of central office switch replacement plans by Qwest and by McLeodUSA, which
are important to any decision, but which are critical if we were to consider a Centrex-based
solution.
Several drafts of a Request For Proposals were prepared and reviewed by the Committee as well
as by the Legal Services and Finance Departments.
Request For Proposals Issued
A legal announcement was placed in the June 2, 2000 edition of the Telegraph Herald inviting
interested vendors to request a copy of the RFP.
On the same day, a Request For Proposals was issued to sixteen potential vendors and made
available to any other interested parties electronically or in paper copy. As a result, a few more
copies were distributed over the next few days.
A pre-proposal meeting was held at City Hall Annex on June 13,2000 where representatives of
interested vendors met as a group with Committee members and via teleconference with our
consultants. Following the meeting, I led a number of vendor representatives on a walking tour
of City Hall, City Hall Annex, and the Carnegie-Stout Public Library, and invited them to visit
any other facilities they wished.
The deadline for receipt of proposals at the City Clerk's office was 10:00 a.m. June 29, 2000.
Four vendors submitted proposals prior to the deadline. These were US West (now Qwest)
Communications, McLeodUSA, Norstan Communications, and Midland Communications.
Proposals from two vendors were received at the City Clerk's office after the 10:00 a.m. deadline
and were not opened or considered. These were from Business Telephone Supply and Lucent
Technologies (now Avaya Communications). Lucent Technologies appealed unsuccessfully to
the City Council to have their late proposal considered, citing a misunderstanding with Federal
Express.
Proposals Reviewed
Elert & Associates performed a detailed preliminary review of the four proposals which were
accepted for consideration. Weighing upfront cost, 7-year cost, technology, vendor qualifications
and maintenance, Elert & Associates recommended in a July 12,2000 report that the Committee
visit Midland Communications and McLeodUSA for hands-on demonstrations and further
questioning. Four members of the Committee visited Midland Communications on August 16,
2000, and three of those members visited McLeodUSA on September 8, 2000. Consultant Lynn
Lingle accompanied the Committee delegation on both visits.
The site visits generated some additional follow-up questions, and later responses were received
from those two vendors. Merrill Crawford called listed references for McLeodUSA and similar-
sized customers listed by Midland Communications.
In mid-October, correspondence and telephone calls were received from McLeodUSA offering
new lower pricing for their existing proposal, from Midland offering a new Voice-Over-IP
technical capability in the latest model of the switch they had proposed, and from Norstan
Communications requested the opportunity to revise the equipment and pricing oftheir proposal
to be more competitive. After consulting with Corporation Counsel Barry Lindahl, we
concluded that it would not be proper to consider these new offers in the current decision
process, short of rejecting all proposals and issuing a new RFP. As a result, none of these
requests for proposal changes was incorporated into the criteria or data supporting the
Committee's recommendations given below.
Committee Recommendation
Based upon the original proposals which met the deadline requirement, the advice and analysis of
Elert & Associates, and the additional information gathered in the site visits and reference
checks, the Committee recommends that the City accept the proposal of Midland
Communications for a PBX-based telephone system built around the NEC model NEAX 2400
and 2000 switches, Dterm telephone instruments, and UnityV oice Mail system.. The exact cost
will change somewhat as we make minor adjustments to the number and model of telephone
instrument placed in each individual office and shop, and as we factor in the remaining telephone
lines acquired from a network service provider.
An executive summary of the recommended proposal is attached, along with additional reference
material pertaining to the Committee's proposal review process. The complete detailed Midland
Communications Proposal is also available for review.
REQUESTED ACTION: The Requested Action is that the City Council concur with the
recommendation of the Committee and authorize the negotiation of final details of a purchase
contract with Midland Communications, Inc. for a new City of Dubuque telephone system.
An estimated equipment cost of$354,044 has been included in the FY-2002 Capital
Improvement Project Budget Request, and an estimated annual savings of $50,000 is reflected in
the FY -2002 Operating Budget Request
EXECUTIVE SUMMARY - TELEPHONE SYSTEM PROPOSAL
Recommended Vendor: Midland Communications Inc.,
316 E. 29th Street,
Davenport, IA 50321
Phone: 319-326-1237
Major Equipment: NEC model NEAX 2400 IMX and NEAX 2000 IVS switches in larger
City buildings, NEC model T -1 and E-l digital remote units in medium-
sized buildings, NEC Dterm Extenders in parking ramps, and several
models ofNEC Dterm Series E. desktop and wall-mounted telephones
(See accompanying manufacturer's descriptive material.)
Basic Description: This proposal is for a Private Branch Exchange (PBX) design which relies
upon several networked digital telephone switches in City buildings (with
the NEAX 2400 IMX functioning as the network hub in City Hall), using a
combination of the City's own fiber optic network, in-building telephone
wiring, leased T -1 lines, ISDN and other future telecom service options to
replace all but a few of the 330+ individual Centrex lines the City
currently uses under contract with Qwest. While most telephones will be
digital, the system will also accommodate analog devices such as
standalone modems and fax machines.
V oiceMail: This proposal also includes a new Unity voice mail system which would
also be resident in City Hall and networked with the telephone system.
This would replace our current shared voicemail arrangement with
Dubuque County.
Affected Facilities: All local telephone and voice mail service in the following City buildings
would be converted to the new system:
City Hall, City Hall Annex, Housing Services, Dubuque Regional Airport,
Leisure Services @ Bunker Hill, the Five Flags Center, Central Fire
Headquarters, the Eagle Point Water Plant, the Water Pollution Control
Plant, the Operations & Maintenance Kerper facility, and the Keyline
Transit facility. The Carnegie-Stout Library building may convert to the
new system as well, subject to the approval of the Library Board.
The Police Department would not convert to the new system, as the DLEC
is served by the Dubuque County phone and voicemail system.
A number of small outlying facilities with only one or two phone lines and
.
few employees will continue with Centrex service for the immediate
future, with the likelihood of joining the City network as a reliable and
cost-effective "voice-over-IP" solution becomes available. These
facilities, (noted in the RFP as "D" locations), include: The five
neighborhood fire stations, the landfill, various small park & public works
maintenance buildings, swimming pools, the Eagle Point Park toll booth,
the Adams Street Water Distribution facility, and a number of automated
rain gauges, pump stations, and remote monitoring sites.
It should be noted that our RFP, and vendor responses, conservatively
reflect the possibility that the Five Flags Center might not be connected to
the City's fiber optic network at the time of installation of the new phone
system. However, we are now confident that the facility will be served by
the fiber connection and we will make that adjustment in equipment
during final contract negotiations, in accordance with the known
equipment models and prices offered in the Midland proposal
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The City of Dubuque
Final Telephone System Recommendation
November 24,2000
Prepared by:
Tom Pavek
Lynn Lingle
~
ELERT & ASSOCIATES
651-430-2772
.,
The Citv of Dubuque
Telephone Recommendation
Telephone System Recommendation
The purpose of this study is to summarize our evaluation of telecommunications proposals
for the City of Dubuque and to present our initial recommendation. Our evaluation is based
on:
1. Our review of the needs analysis we performed in the initial study for the City of
Dubuque.
2. Our review of telecommunications bid responses for the City of Dubuque.
Our evaluation of vendor proposals was based on 13 separate criteria in 4 categories.
Each vendor was ranked 1 - lOon each criterion:
CRITERIA WEIGHT
1. Cost 30
2. Technology 25
3. Vendor 23
4. Maintenance 20
98
Note: Elert & Associates represents that the information and recommendations
contained within this report are prepared for the City of Dubuque based on the
most current data made available during the specified study period
This report is meant to be only advisory in nature. The City of Dubuque's
management is responsible for all consequences resultingfrom their decisions in
accepting, rejecting, or implementing these recommendations.
We recommend the review of purchasing and recommendation criteria and
procedures by legal counsel prior to award of the proposal.
~ Elert & Associates
Page 2
.,
The City of Dubuque
Televhone Recommendation
The City of Dubuque
Information was collected through interviews and planning sessions with the staff and
management personnel to determine their voice telecommunications needs. The findings
ofthese planning sessions were utilized as the basis for preparation of the Telephone
Request for Proposal.
Proposal specifications were compiled and provided to the following vendors:
1. Alltel
2. BiState Telesource
3. Business Telephone Supply
4. Communications Engineering Co.
5. Convergent Communications
6. Lucent Technologies
7. McLeodUSA
8. McLeod IBS
9. Midland
10. Nextel Partners, Inc.
11. Norstan
12. Racom Radio Equipment
13. RSM McGladrey, Inc.
14. San Communications, Inc.
15. US West
16. Vicom
~ Elert & Associates
Page 3
The Citv of Dubuque
Telephone Recommendation
Proposals were received from the following vendors:
1.
McLeod
Mite! SX 2000's and Mitel Mail voice mail
2.
Midland Communications
NEC 2400 and 2000s, with NEC Unity voice mail
3.
N orstan
Siemens Model 80 with RCM's (remote
communication modules) with PhoneMail voice
mail
4.
US West
Centrex Plus with Octel voice mail
~ Elert & Associates
Page 4
The City of DubuQue
Telephone Recommendation
The City of Dubuque
Upfront Cost
Cost
McLeod
$165,506
$405,948
$603,015
$698,158
US West
Midland
Norstan
Seven-Year Costs
Midland
$892,700
McLeod
$1,013,546*
US West
$1,058,364
$1,292,4 34
Norstan
Cost includes new systems at City Hall and a variety of configurations for the other
locations which are different for each proposing vendor. The system includes power fail
transfer and one-hour battery backup, voice mail, Enhanced 911, ACD, call accounting,
and a device to allow all site programming.
*McLeod is offering a five-year warranty.
Prices do not include taxes.
~ Elert & Associates
Page 5
. .
The Citv of Dubuque
Telephone Recommendation
Point Totals
975
Midland
McLeod
942
us West
879
Norstan
876
Recommendation
Elert & Associates recommends that the City of Dubuque persue a contract with
Midland Communications. The users have seen demonstrations from two vendros and
have checked references.
It should be noted that Midland shall perform a more detailed inspection of the sites to
determine the best suited telephone for each user. This will effect thefinal
configuration and cost of the system.
'" Elert & Associates
Page 6
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The City of Dubuque
Telephone Recommendation
Notes
The following notes correlate directly to the various points indicated on the preceding
"Evaluation Criteria" sheet. The costs reflected are based upon the seven-year total
operation costs and include those items indicated in the left columns of the attached cash
flow pages.
COST
Cost - Full points were awarded to Midland for being the low cost vendor based on a
seven-year cash flow. Thereafter, one-tenth of one percent was deducted for every
one percent (I %) in cost variance from the low cost vendor.
TECHNOLOGY
Instruments - Full points were awarded to all vendors with the exception of US West.
They did not provide a lO-line telephone as asked for in the RFP. The phones they
proposed were maximum 3 lines which would not allow for key appearances for call
coverage positions.
Networking Capabilities - Full points were awarded to all vendors. Many of the vendors
have systems with nodes, shelves or modules that are connected utilizing the fiber or a
monthly T -1 circuit. These nodes or shelves have networking software that allows them
to talk to each other as if they were one system.
Feature Transparency - All proposals contained software of a recent release which has
been field-proven and found to be very stable. They all have full functionality when
calling to another system, node or shelf. Full points were awarded to all vendors.
Expansion - All proposed systems contained expansion exceeding that requested in the
RFP; therefore, full points were awarded to all vendors.
VENDOR
Financial Stability - The financial stability of the vendors and their manufacturers is such
that they were awarded full points in this category.
Industry Experience - Full points were awarded to all vendors as they have many systems
installed in similar environments around the state.
Manufacturers Support - Although none of the proposers is a direct manufacturer of the
proposed system, they all have strong backing from the manufacturers. Full points were
awarded to all vendors.
Ouality of Response - Full points were awarded to all vendors.
~ Elert & Associates
Page 8
The Citv of Dubuque
Televhone Recommendation
MAINTENANCE
Number of Trained Technicians - Full points were awarded to all vendors as they have
three or more technicians to service the area.
Spare Parts Inventory - All vendor proposals indicated that replacement parts are
maintained at their nearest support centers to cover any emergency needs if necessary,
and selected vendor will maintain adequate inventory on-site. For that reason, all vendors
received full points.
Dispatch Distance - All vendors guaranteed a response time of two hours in an emergency
situation. However, McLeod is based in Dubuque, while the others are located in
Davenport and Cedar Rapids. Full points were awarded to McLeod, and one point was
deducted from all other vendors.
Installations - Local - Although none of the vendors has a large presence in area, they
each have many installations in many areas of the states. Full points were awarded to all
vendors.
Toll Fraud
Note: None ofthe vendors has provided any Toll Fraud detection software or hardware.
Since there is no foolproof configuration, the vendors and Elert & Associates do not
guarantee to prevent Toll Fraud. There are measures within the PBX that the vendors
will assist you in watching, but again this is not foolproof. Any of the vendors can assist
you in purchasing advanced detection devices and some of the vendors have monthly
plans that can monitor for any toll problems.
To provide better detection, we recommend that you consider purchasing one or more of
the following items:
1. Call accounting software with Toll Fraud detection.
2. Services from specialized companies that will monitor your system and alert you
of potential hackers.
3. Special "Toll Fraud Insurance".
~ Elert & Associates
Page 9
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Integrated Business Systems
421 4TH AVENUE SE · CEDAR RAPIDS, IA 52401
PH 319-247-5200. 800-383-2220
December 4, 2000
Dear Mayor and City Council Members;
I would like the opportunity to address with the Mayor and City Council members the differences we at
McLeodUSA IBS see in the RFP's submitted. We believe that there are substantial differences in the
features and functionalities between the products proposed as well as vendor differences. We realize there
is a cost difference and we feel if the Request For Proposal's were truly apples to apples comparison there
may not be the cost issue.
McLeodUSA IBS is able to provide local service to the City of Dubuque. This is a very strong
consideration for the city entering into a long term relationship with their selected vendor. McLeodUSA
IBS feels that it is important for the City to do business with a local vendor. In an emergency we are in
Dubuque and can be on sight within minutes, not hours. McLeodUSA has made substantial investments and
long-term commitments to the City of Dubuque. Weare uniquely able to bring you a one-vendor solution
to all of your telecommunication needs.
There are several concerns we have on the products proposed. The Mitel SX-2000 product that we at
McLeodUSA ms have proposed offers a totally transparent networked single platform solution giving the
same hardware and software features and functionalities throughout the city. The NEC proposal is based on
two totally different and separate platforms which may utilize the same telephone sets but require separate
hardware and software. It is our understanding that the City is requesting a consistent solution and we
question if this is a total transparent solution with common functionalities throughout.
Our proposed Mitel solution includes complete redundancy within the product. NEC has different levels of
redundancy and it is not clear which level is included in the proposal. To match our proposed redundancy
NEC must offer their top level. We have also included in our proposal the OPS Manager which is a total
system management tool. The OPS Manager with the Mitel is one complete package no licensing is
required. The AimWorx proposed in the NEC quote is an option based tool where each feature can be
licensed on an "as need basis" meaning that you pay as you go. We are not clear what is included in the
proposal.
We ask for the opportunity to meet with the committee to get into more detail of the questionable
differences in the proposals. We strongly feel McLeodUSA IBS and Mitel have the best overall, long-term
solution for the City of Dubuque.
Thank you for your consideration.
s~ jJ~
Cindy Parker
McLeodUSA Integrated Business Systems
8355 UNIVERSITY AVENUE, SUITE I
DES MOINES, IA 50325
515-226-1300
425 FRANKLIN STREET, SUITE A
WATERLOO, IA 50703
319- 235-6600
3250 KENNEDY CiRCLE
DUBUQUE, IA 52002
319-582-0051
" ",,,f":"":":>:"" :'M'f'T _,.,.,.IT TC" A@
]~'~t{' ~L.CUU UJ/":l
Integrated Business Systems
421 4TH AVENUE SE · CEDAR RAPIDS, IA 52401
PH 319-247-5200 · 800-383-2220
December 4, 2000
Dear Mayor and City Council Members;
I would like the opportunity to address with the Mayor and City Council members the differences we at
McLeodUSA IBS see in the RFP's submitted. We believe that there are substantial differences in the
features and functionalities between the products proposed as well as vendor differences. We realize there
is a cost difference and we feel if the Request For Proposal's were truly apples to apples comparison there
may not be the cost issue.
McLeodUSA IBS is able to provide local service to the City of Dubuque. This is a very strong
consideration for the city entering into a long term relationship with their selected vendor. McLeodUSA
IBS feels that it is important for the City to do business with a local vendor. In an emergency we are in
Dubuque and can be on sight within minutes, not hours. McLeodUSA has made substantial investments and
long-term commitments to the City of Dubuque. We are uniquely able to bring you a one-vendor solution
to all of your telecommunication needs.
There are several concerns we have on the products proposed. The Mitel SX-2000 product that we at
McLeodUSA ms have proposed offers a totally transparent networked single platform solution giving the
same hardware and software features and functionalities throughout the city. The NEC proposal is based on
two totally different and separate platforms which may utilize the same telephone sets but require separate
hardware and software. It is our understanding that the City is requesting a consistent solution and we
question if this is a total transparent solution with common functionalities throughout.
Our proposed Mitel solution includes complete redundancy within the product. NEC bas different levels of
redundancy and it is not clear which level is included in the proposal. To match our proposed redundancy
NEC must offer their top level. We have also included in our proposal the OPS Manager which is a total
system management tool. The OPS Manager with the Mitel is one complete package no licensing is
required. The AimWorx proposed in the NEC quote is an option based tool where each feature can be
licensed on an "as need basis" meaning that you pay as you go. We are not clear what is included in the
proposal.
We ask for the opportunity to meet with the committee to get into more detail of the questionable
differences in the proposals. We strongly feel McLeodUSA ms and Mitel have the best overall, long-term
solution for the City of Dubuque.
Thank you for your consideration.
Sincerely, ,
~~ /l-t-
Cindy Parker
McLeodUSA Integrated Business Systems
8355 UNIVERSITY AVENUE, SUITE I
DES MOINES, IA 50325
515-226-1300
425 FRANKLIN STREET, SUITE A
WATERLOO, IA 50703
319-235-6600
3250 KENNEDY CIRCLE
DUBUQUE, IA 52002
319-582-0051