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DATE:

RE:

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TRANSMITTAL MEMORANDUM

The Honorable Mayor and City Council

Karl R. Amylon, General Manager

September 12, 2017

Exempting the Procurement of Additional Optimization Services from the Competitive Bid/Written Quotation Requirements of the Ketchikan Municipal Code- Ericsson, Inc.

At its meeting of April 6, 2017, the City Council adopted a motion exempting the procurement of optimization services for the Telecommunications Division 's 4G/L TE wireless network from the co·mpetitive bidding/written quotation requ irements of the Ketchikan Municipal Code. The .motion adopted by the City Council also authorized my office to .enter into an agreement for the procurement of such optimization services from Ericsson, Inc. at a cost not to exceed $34,513.94

The motion detailed below was prepared at the request of Telecommunications Division Manager Ed Cushing, who asked that it be placed before the City Council for consideration at its meeting of September 21 , 2017. If adopted, the motion provides for exempting the procurement of an additional month of optimization services for the Telecommunications Division's 4G/L TE wireless network from the competitive bidding/written quotation requirements of the Ketchikan Municipal Code and authorizing the acquisition of such optimization services from Ericsson, Inc. at a cost of $10,385.36

Subparagraph 6 of Section 3.12.050(a) of the Ketchikan Municipal Code provides for exempting the purchase of such billing support from competitive bidding/quotations when:

"Supplies, materials, equipment or contractual services which should be purchased from a specific source in order to prevent incompatibility with previously purchased supplies, materials, equipment or contractual services. For the purpose of this paragraph, the term 'incompatibility' is defined as:

(A) The inability to interconnect, combine, interchange, or join; or

(B) That which causes substantial duplication in maintenance, expertise or training or in the stocking of parts, materials, supplies or replacements. Any

purchase which is to be excluded from competitive bidding by authority of this subparagraph which exceeds $10,000, must first be approved by the council. "

The rationale for the exemption and procurement of an additional month of optimization services is detailed in Mr. Cushing's transmittal memorandum and requires no elaboration on the part of my office. I concur with the Telecommunications Division Manager's recommendation.

Mr. Cushing will be attending the City Council meeting of September 21, 2017, in order to address any questions and/or concerns that Councilmembers may have.

A motion has been prepared for City Council consideration.

RECOMMENDATION

Pursuant to subparagraph 6 of Section 3.12.050(a) of the Ketchikan Municipal Code, it is recommended that the City Council adopt the motion exempting the procurement of an additional month of optimization services for the Telecommunications Division 's 4G/L TE wireless network from the competitive bidding/written quotation requirements of the Ketchikan Municipal Code; authorizing the General Manager to enter into an agreement for the procurement of such additional optimization services from Ericsson, Inc. at a cost not to exceed $1 0,385.36; and approving funding from the Telecommunications . Division's ·2017 Other Contractual Services account (Account No. 635-14).

Recommended Motion:. Pursuant to subparagraph 6 of Section 3.1 2.050(a) of the Ketchikan Municipal Code, I move the City Council exempt the procurement of an additional month of optimization services for the Telecommunications Division's 4G/L TE wireless network from the competitive bidding/written quotation requirements of the Ketchikan Municipal Code; authorize the General Manager to enter into an agreement for the procurement of such additional optimization services from Ericsson, Inc. at a cost not to exceed $10,385.36; and approve funding from the Telecommunications Division's 2017 Other Contractual Services account (Account No. 635-14).

AGENDA- 09/21/17- KPUCA2

KPU Telecommunications 2970 Tongass Avenue Ketchikan, AK 99901

Phone(907)225-1000 Fax (907)225-1788

Memorandum

To:

From:

Date:

Subject:

Karl R. Amylon, KPU General Manager

Ed Cushing, KPU Telecommunications Division Manager

September 12, 2017

Approval of Ericsson Optimization Services Extension Pursuant to Ketchikan Municipal Code 3.12.050(a)6 to Ensure Compatibility

The purpose of this memorandum is to request that the General Manager seek City Council approval for an extension of the optimization services (Engineering Cloud Services - ECS) from Ericsson Inc. in the amount of $10,385.36, from the Other Contractual Services account (635.14). In keeping with the 2017 expense budget plan, this purchase procures the. services necessary to optimize the Ericsson equipment that comprises KPU's Verizon Wireless 4G-L TE network, ensuring a positive customer experience.

Background

KPU Telecommunications owns and operates an Ericsson 4G L TE network, utilized to provide Verizon Wireless service in Ketchikan and Skagway. The Ericsson network enables KPU to contract with Verizon Wireless as a voice and data-roaming partner for 'tourists' as well as offer Verizon handset and device service to local customers.

To ensure the best possible local wireless service, KPU utilizes Ericsson's remote optimization service to evaluate ongoing software values - in concert with the physical aspects of KPU's 4G/L TE network nodes - to enhance the performance of the RAN (Radio Access Network) - based upon thoroughly evaluating ongoing customer utilization of the network.

At the April 6, 2017 City Council meeting, the City Council exempted the procurement of optimization services for the Telecommunications Division's 4G/LTE wireless network from the competitive bid/written quotation requirements of the Ketchikan Municipal Code and authorized the general manager to enter into an agreement for the procurement of such optimization services from Ericsson, Inc. at a cost not to exceed $34,513.94.

Subsequently, during the summer months it became clear that the amount of roaming traffic had increased year-over-year to the point that additional time would be required to sufficiently optimize the network.

Accordingly, to obtain the maximum value from the optimization effort, we require a one month extension of Ericsson's optimization services to fully integrate and optimize several new sites into the 4G-L TE network. The additional cost for extension of the optimization services is $10,385.36

KPU is only able to procure these services through Ericsson, the manufacturer of the equipment.

Since the additional expenditure is above $10,000 the purchase requires written quotations or competitive bids unless the City Council approves an exemption. Section 3.12.050(a)(6) of the Ketchikan Municipal Code provides an appropriate exemption for th is transaction. Subparagraph (6) states the following:

"Supplies, materials, equipment, or contractual services which should be purchased from a specific source in order to prevent incompatibility with previously purchased supplies, materials, equipment, or contractual services. For purpose of this subparagraph, the term incompatibility is defined as:

(a) the inability to interconnect combine, interchange, or join; or (b) that which causes substantial duplication in maintenance, expertise or

training or in the stocking of parts, materials, supplies or replacements.

Any purchase which is to be excluded from competitive bidding by the authority of this subparagraph which exceeds ten thousand dollars must first be approved by the council. "

Due to the very complex and specific nature of the Ericsson network, this purchase will be made in accordance with Municipal Code 3.12.050(a)6 to prevent incompatibility­i.e. the Ericsson Network can only be optimized by Ericsson.

Recommended Motion:

Pursuant to section 3.12.050(a)(6) of the Ketchikan Municipal Code, I move the City Council exempt the procurement of Ericsson Optimization Services (ECS) extension, in the amount of $10,385.36 from competitive bid; and approve funding from the 2017 KPU Telecommunications Annual Budget for Other Contractual Services account (635.14).

Cc: David Martin, Assistant KPU Manager

Bob Newell, City Finance Director

April 6, 2017

Moved by Sive11sen, seconded by Coose the City Council approve in first reading Ordinance No. 17-1849 amending Subsection (a) of Section 11.04.040 of the Ketchikan Municipal Code entitled "Deposits"; and establishing an effective date.

Motion passed with Coose, Flora, Zenge, Gage, Sive11sen and Isom voting yea; Kiffer absent.

Moved by Sivertsen, seconded by Coose pursuant to subparagmph of Section 3.12.050(a) of unici al Code, the City Co\Ulcil exem__pt the _procurement of o timization

services for the Telecommunications ivision's 4G/LTE wireless network from the com_petitive bid/written quotation re_guirements of the Ketchikan Municipal Code; authorize the general manager to enter into an agreement for the procurement of sue o hmization services from Ericsson, Inc. at a cost not to exceed $34,513.94; aru.t approve funding from the Telecommunicati<ms ivision's 2017 Other Contractual Servtces Account No. 635.14.

1\tk)tion passed wiili Coose, Flora, Zenge, Gage, Sivertsen and Isorn voting yea; Kiffe1· absent

Exempting the Procurement of Annual Colocation Services for the Telecommunications Division from the Competitive Bid/Written Quotation Requirements of the Ketchikan Municipal Code - Green House Data

Moved by Sive11sen, seconded by .Coose pursuant to subparagraph 6 of Section 3.12.050(a) of the Ketchikan Municipal Code, the City Council exempt the procurement of annual colocation services for the Telecommunications Division from the competitive bidding and written quotation requirements of the Ketchikan Municipal Code; authorize the general manager to enter into an agreement for acquisition of such annual colocation services with Green House Data in an amount not to exceed $27,600; and approve funding from the Telecommunications Division's 2017 Rents and Leases- lnfrastmcture Account No. 645.04.

Motion passed with Coose, Flora, Zenge, Gage, Sivertsen and Isom voting yea; Kiffer absent.

Exempting the Procurement of Equipment Installation for the Telecommunications Division's 4G/LTE Network in Skagway, Alaska from the Competitive Bid/Written Quotation Requirements of the Ketchikan Municipal Code - AT&T Alaska

Moved by Sive11sen, seconded by Coose pursuant to subparagraph 6 of Section 3.12.050(a) of the Ketchikan Municipal Code, the City Council exempt the procurement of equipment installation for the Telecommunications Division's 4G/LTE network in Skagway, Alaska from the competitive bidding/written quotation requirements of the Ketchikan Municipal Code; authorize the general manager to enter into an agreement for the procurement of such equipment installation with AT&T Alaska at a cost not to exceed $24,652; and approve funding from the Telecommunications Division's 2017 4G/LTE Capital Account.

Motion passed with Coose, Flora, Zenge, Gage, Sive11sen and Isom voting yea; Kiffer absent.

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