The City of Garden Grove has been using an AT&T Centrex phone system for over 20 years.  This system not only has a high cost of ownership and operation, it fails to offer effective, expected, and modern business features and services. Information Technology staff researched current business telephony systems and determined that a VoIP phone system was in the best interest of the City.  This new system will provide considerable on-going savings and position the City to benefit from current technology and the future of telecommunication.  It will reduce the overhead of managing the phone system, which will allow for a higher standard of customer service to the public and City staff. With these goals, City staff issued RFP S-1216 to replace the existing Centrex phone system and equipment with a VoIP solution.

RFP No. S-1216 was advertised on May 31 and June 7, 2017.  Thirteen (13) proposals from ten (10) vendors were received. The Source Selection Committee (SSC) evaluated the proposals based on Price/Cost Effectiveness, Project Plan (technology provided, scalability, and implementation plan) and Qualifications of the Proposer (company experience, stability and reference checks).  The top five (5) vendors that scored 60% or higher were then invited to demonstrate their proposed solutions.  After demonstrations the proposals were scored again and the top two (2) were selected.  A mock discovery of the implementation process of each was presented and the proposals were scored for a final time.  Best and final offers were requested and received.  Based on this process, CDW-G received the highest score and was chosen.

The one-time cost for the hardware, licensing, and 5-year maintenance is $323,395.40, which can be financed at 0% interest over 5 years, for an annual cost of $64,679.08. In addition, there is a one-time cost for implementation, discovery, project management, and training of $94,788.00. The new system will also incur annual on-going Internet Telephony Service Provider costs estimated in the amount of $10,000.00.

The total cost for FY 2017-18 is $169,467.08. Funds are available in the Telecommunications Internal Service Fund and will need to be appropriated for FY 2017-18. The cost for FY 2018-19 is $74,679.08 and is available in the adopted FY 2018-19 budget.

The projected cost reduction, which will begin in FY 2018-19, is estimated to be $175,000 annually following the initial capital outlay of $159,467.08 in FY 2017-18 for implementation of the VoIP system.

It is recommended that the City Council:

• Appropriate additional funds in the amount of $169,467.08 from the Telecommunications Fund for FY 2017-18; and
• Award a contract to CDW-G, in the amount of not-to-exceed $418,183.40 to provide all labor, materials, equipment, support, training, and installation for the implementation of a Voice over Internet Protocol "VoIP" phone solution including five (5) years of service, support, and maintenance; and 
  

• Approve and authorize the City Manager to execute the agreement and make minor modifications as appropriate thereto on behalf of the City; and
• Approve and authorize the City Manager to procure and enter into all related agreements necessary to implement the VoIP system.