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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: December 1, 2025
Report #:2510-5314
TITLE
Approval of Two Contracts: 1) Blanket Purchase Order with Minsait Advanced Control Systems (ACS) in an Amount Not-to-Exceed $1,000,000 to Purchase As-Needed Hardware and Software Components, 2) Professional Services Contract No. C26195119 with Minsait ACS in an Amount Not-to-Exceed $439,450 for SCADA System Software Licensing and Support for a Period of Five Years in an Combined Contracts Amount Not-to-Exceed $1,439,450; CEQA Status – Not a Project
RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or their designee to execute:
1. As-needed blanket purchase orders with Minsait Advanced Control Systems (ACS) in an amount not-to-exceed $200,000 annually for a term of five years for a total not-to- exceed amount of $1,000,000 for new or replacement SCADA hardware and software components; and
2. Approve and authorize the City Manager or their designee to execute General Services Contract No. C26195119 (Attachment A) with Minsait Advanced Control Systems (ACS) to provide licensing and professional support for a term of five years and a total not-to- exceed $439,450, including $399,500 for basic services, and $39,950 for additional services.
EXECUTIVE SUMMARY
City of Palo Alto Utilities (CPAU) uses a Supervisory Control and Data Acquisition (SCADA) system to monitor and control the City’s electric, water, and gas substations. These contracts ensure the SCADA system proprietary equipment, software, and technical support is supported for the next five years. Minsait Advanced Control Systems (ACS) will ensure continued system reliability, equipment upgrade, and compatibility, via the recommended contract and blanket
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purchase order in an amount not-to-exceed $1,439,450 (approximately $280,000 annually) over a period of five years.
CPAU anticipates evaluating system modernization or full replacement during the contract term, allowing sufficient time to plan, design, and procure a next-generation SCADA platform in alignment with broader grid modernization efforts.
BACKGROUND
The City’s SCADA system is the critical control platform used to monitor and operate the electric, water, and gas utility networks. This system enables real-time operational control, fault isolation, outage management, cybersecurity, and operational visibility of the City’s infrastructure. ACS has been the sole provider of the City’s SCADA system since 1997. All SCADA system components—including servers, remote terminal units (RTUs), communication nodes, network hardware, and operating software—are proprietary to ACS.
Historically, Utilities Staff and IT Staff maintained separate purchasing structures with ACS: one 5-year contract for software licensing and support (Contract No. S16161922) and an ongoing annual blanket purchase order for equipment and upgrade purchases (Blanket Purchase Order No. 4625000084). To improve coordination, budget forecasting, procurement efficiency, and transparency staff seeks to align the contract with the blanket purchase orders into a single staff report.
ANALYSIS
The City’s SCADA system architecture relies on fully integrated ACS hardware and software components, including the PRISM SCADA platform. Due to the proprietary nature of the system, third-party vendors cannot provide compatible components or support without significant operational and cybersecurity risk. Past efforts to integrate third-party RTUs and software proved cost-ineffective and technically insufficient.
While Minsait ACS may not represent the most modern SCADA provider in the market, it remains the only vendor capable of fully supporting the City’s existing system. Transitioning to a different SCADA vendor will require a complete system replacement, including new servers, RTUs, communication infrastructure, software integration, extensive engineering design, and operator retraining.
Given the City’s current strategic priorities, including large-scale electrification initiatives, substation modernization, and ongoing operational maintenance, the resources required for a system-wide SCADA replacement are not feasible at this time without compromising other critical utility initiatives. The proposed contract and blanket purchase orders allow the City to 8 3
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maintain safe and reliable utility operations, sustain cybersecurity protections, and allocate staff and financial resources toward electrification and other strategic priorities.
The proposed five-year contract and blanket purchase orders will ensure:
Licensing & Support Continuity: Annual software support, updates, and technical assistance from ACS to ensure operational reliability, cybersecurity compliance, and compatibility with evolving technologies.
Hardware & Software Upgrades: Planned replacement and upgrade of critical RTUs, network equipment, servers, and software modules at substations and the Utility Control Center.
Standardization: Maintaining a standardized SCADA architecture simplifies future upgrades, operational training, cybersecurity management, and vendor coordination. Cost Stability: Establishing a long-term sole source contract provides predictable budgeting and reduces administrative burden.
The annual combined cost of the contract and blanket purchase order is approximately $280,000 includes $80,000 for base software licensing and support services and $200,000 for anticipated and as-needed hardware and software upgrades, including:
New reporting app for operational intelligence
Firewall intrusion detection system upgrades
Proxy server and patch management updates
RTU replacements and upgrades at substations
Two-factor authentication security enhancements
Backup server provisioning for operational resiliency
Staff is also recommending $39,950 for additional non-basic and unforeseen support services that may arise during the five-year term. Annually, the City has incurred an average of $110,000, over the last five years for as-needed hardware and software upgrades which is lower than the contract authority however with planned hardware replacements and price increases for labor and materials, this increase reflects similar activity at the new pricing.
A sole source and standardization exemption from competitive solicitation was granted pursuant to Palo Alto Municipal Code Sections 2.30.900 and 2.30.360(e) due to Minsait ACS being the City’s designated support and supplier of SCADA equipment and the proprietary nature of the ACS SCADA system.
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FISCAL/RESOURCE IMPACT
Funding of $75,248 for the first year of the support contract is available in the FY 2026 Operating Budget in the Technology Fund. Funding of up to $200,000 for the first year of the hardware blanket purchase order is available in FY 2026 Electric CIP SCADA System Upgrade (EL-02010). Any unspent funds in the hardware blanket purchase order will be returned to the Electric reserves. Funding in subsequent fiscal years is subject to Council’s approval of annual budget appropriations.
Year Support Support Contingency Hardware (As-Needed) Total 1 $75,248 $7,525 $200,000 $282,773 2 77,505 7,750 200,000 285,255 3 79,830 7,983 200,000 287,813 4 82,225 8,223 200,000 290,448 5 84,692 8,469 200,000 293,161 Total $399,500 $39,950 $1,000,000 $1,439,450
STAKEHOLDER ENGAGEMENT
ACS has provided SCADA system licensing, equipment, and support services to the City since 1997. Utilities Staff has coordinated with Staff in the IT Department and Purchasing Division to review procurement options and determined sole source procurement is the most appropriate and cost-effective solution due to the proprietary and standardized nature of the system.
ENVIRONMENTAL REVIEW
Approval of this contract does not constitute a project under the California Environmental Quality Act (CEQA). Therefore, no environmental assessment is required.
ATTACHMENTS
Attachment A: Minsait Advanced Control Systems; Contract C26195119 APPROVED BY:
Alan Kurotori, Director of Utilities