City Council Agenda Report
Meeting Date: November 7, 2023
From: Todd Dusenberry, General Manager of Public Utilities Department: Public Utilities
Submitted by: Adriana Ramos, Administrative Analyst
Subject
Services Agreement with Fujitsu Network Communications, Inc.
Recommendation
A. Find that the proposed action is categorically exempt from California Environmental Quality Act (CEQA) review, in accordance with CEQA Guidelines Section 15301, because the project consists of the maintenance, repair or minor alteration of existing equipment and involves negligible or no expansion of an existing use;
B. Find that the best interests of the City are served by a direct award of an agreement with Fujitsu Network Communications, Inc. without a competitive selection process pursuant to Vernon Municipal Code (VMC) Section 3.32.110 (B)(2); and C. Approve and authorize the City Administrator to execute a Services Agreement with Fujitsu Network Communications, Inc. in substantially the same form as submitted, in an amount not to exceed $444,586.80, for a three-year term for services related to the fiber optics system internet access operations.
Background
The Vernon Public Utilities (VPU) Fiber Division receives dedicated wholesale internet circuits from upstream service providers. These internet circuits are then provisioned through networking equipment at City Hall and other utility facilities to provide reliable internet services to Vernon business and residential customers.
The City has utilized Fujitsu Network Communications, Inc. (Fujitsu) for maintenance and network monitoring of the fiber network system since its inception in 2004. On October 20, 2020, the City Council approved a three-year Services Agreement with Fujitsu for the maintenance of equipment and services related to fiber operations. That agreement is set to expire on November 6, 2023. VPU’s Fiber Division is highly satisfied with the work and services provided by Fujitsu.
Fujitsu’s equipment has continuously proven to be highly reliable. Additionally, Fujitsu has provided the capability for remote managed services to the fiber system over the last nineteen years. Their services include 24/7 monitoring of key network devices, most of which are manufactured at the Fujitsu factory facility, monthly reporting and customized reports, incident ticket management, program and project management, and problem management restoration.
The City’s existing networking equipment has reached the ten-year life expectancy for this type of equipment. Therefore, on March 21, 2023, the City Council approved a Labor and Materials Contract with Fujitsu for $717,765.97 to upgrade the existing fiber optics network system and perform related network migration services to facilitate the reliability and future growth of VPU’s fiber system. The new networking equipment installation is expected to be completed by the end of the 2023 calendar year.
The proposed agreement is exempt from competitive bidding pursuant to Section
3.32.110(A)(10) of the Vernon Municipal Code (VMC) and can be exempt from competitive selection pursuant to Section 3.32.110(B)(2) if a direct award is found to be in the best interests of the City. Section 3.32.110(B)(3) of the VMC indicates that the City Council has the authority to make such a finding when the proposed contract exceeds $100,000. As this staff report outlines, the City's best interests are served by a direct award based on Fujitsu’s demonstrated consistency and reliability, which is critical to VPU and its customers.
Moreover, VPU staff is recommending a direct award of this services agreement to Fujitsu to continue to provide network monitoring and related troubleshooting support to the City's residential and business customers without an interruption of coverage. The City's upgraded networking equipment is built around Fujitsu's transport and network distribution equipment. The replacement, maintenance, and network monitoring services by another vendor would require a complete overhaul of the fiber network system as the software used by the upgraded server equipment is only compatible with Fujitsu’s software, which is currently proprietary to Fujitsu. The selection of a new vendor would result in higher expenses and a much longer network transition period for the City as the Electric, Natural Gas and Water Fund receive the benefit of the SCADA System and related monitoring services as do VPU’s customers. If VPU opted to select a new vendor to provide these services, the installation of new equipment, including network engineering and management support services, would result in service interruption and added costs to customers, as their internet services would be down for an extended period of time with no guarantee of reliable service as it exists today. Ultimately, changing from proprietary equipment to compatibility with another vendor would be extremely costly for the City.
Therefore, staff recommends that the City Council approve the proposed Services Agreement in the amount of $444,586.80 to provide fiber maintenance and monitoring services.
The Services Agreement has been reviewed and approved as to form by the City Attorney’s Office.
Fiscal Impact
The fiscal impact is not-to-exceed $444,586.80 for the term of three years. Funds for the service agreement are available in the FY 2023-24 Fiber Fund, Professional Services - Other Account No. 059-080-800-529215 in the amount of $77,000. However, approval of this action would require an additional appropriation of $71,195.60 in Fiber Fund, Professional Services - Other Account No. 059-080-800-529215 from available fund balance. Funds will be budgeted in subsequent fiscal years.
Attachments
1. Services Agreement