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1 JDJ:~mit ITIIIl \Wlmit Ir mldl!plojiw!!w 8 illln CCftity rdj~ IL:aJ ~ [ -.!~ ANTONIO R. VILLARAIGOSA J,tfay or Commission THOMAS S. SAYLES,Presidem ERIC HOLOMAN, loce-president CHRISTINA E. NOONAN JONATHAN PARFREY BARBARA E. MOSCHOS, Secretmy RONALD 0. NICHOLS General Mcmager RAMAN RAJ Chief Operating Officer February 3, 2011 The Honorable City Council City of Los Angeles Room 395, City Hall Los Angeles, California Honorable Members: Subject Specification No. 217 with Evertz Microsystems, Ltd.. Pursuant to Charter Section 373, enclosed for approval by your Honorable Body is Resolution No , adopted by the Board of Water and Power Commissioners (Board) on February 1, 201 1, approved as to form and legality by the City Attorney, which recommends Specification No. 217 to furnish and deliver broadcaster network equipment and software be awarded to Evertz Microsystems, Ltd., for a total amount not to exceed $4,750,000 for a term of one year with four optional one-year periods. As directed by the Board, transmitted to you are supporting documents. Ifthere are any questions regarding this item, please contact Ms. Winifred Yancy, Manager Local Government and Community Outreach, at (213) , or Mr. Matthew M. Lampe, at (213) Sincerely, Barbara E. Moschos Board Secretary BEM:oja Enclosures: LADWP Resolution Board Letter CAO Report Water and Power Conservation... a way of life Ill North Hope Street, Los Angeles, California Mailing address: Box , Los Angeles Telephone: (213) Cable address: DEWAPOLA
2 c/enc: Mayor Antonio Villaraigosa Councilmember Jan C. Perry, Chair, Energy and the Environment Committee Mr. Gerry F. Miller, Chief Legislative Analyst Mr. Miguel A. Santana, City Administrative Officer Mr. Rafael Prieto, Legislative Analyst, CLA Mr. William R. Koenig, Chief Administrative Analyst Ms. Winifred Yancy Mr. Matthew M. Lampe
3 RESOLUTION NO.,1=--9_ 3;;;...0_ 4 WHEREAS, the Los Angeles Department of Water and Power (LADWP) identified broadcaster video network service as an innovative growth opportunity serving Los Angeles' extensive entertainment industry, and developed the VideoMAN infrastructure; and WHEREAS, this contract is to furnish broadcaster video network equipment and software, providing LADWP with the spares and upgrades to meet the demands for this service; and WHEREAS, without a contract, the LADWP will not be able to support its existing customers and will suffer customer and revenue loss; and WHEREAS, LADWP's Joint System recommends a sole source contract be awarded to Evertz Microsystems, Ltd. (Evertz), the manufacturer of the original equipment; and WHERE:AS, this contract combined with previous contracts with Evertz, constitutes continued contracting exceeding the three year time period set by Ordinance. THEREFORE, BE IT RESOLVED that Evertz Microsystems, Ltd. is awarded a sole source contract, under City Charter Section 371 (e)(?), for a total amount not to exceed $4,750, which includes all optional periods, for a term of one year with four optional one-year periods under Specification No. 217, approved as to form and legality by the City Attorney and on file with the Secretary of the Board. BE IT FURTHER RESOLVED that the Chief Accounting Employee, upon proper certification, is authorized and directed to draw demands on the Water and Power Revenue Fund in accordance with the terms of this contract awarded pursuant to Specification No. 217 and this resolution. BE IT FURTHER RESOLVED that the President or the Vice President of the Board, or the General Manager, or such person as the General Manager shall designate in writing, and the Secretary, the Assistant Secretary or the Acting Secretary of the Board be and they are hereby authorized and directed to execute said Agreements for and on behalf of LADWP, after approval by the Los Angeles City Council pursuant to Administrative Code I HEREBY CERTIFY that the foregoing is a full, true and correct copy of the resolution adopted by the Board of Water and Power Commissioners at its meeting held FEG APPHoVel.l AS TO FORM Af,ID LEGALITY CARMEN A. TRUTf,NIGH. C!TY /\HORNEY BY Sf~ DIRK P. EiROERSMA DEPUTY C!TY ATTORNEY
4 LOS ANGELES DEPARTMENT OF WATER AND POWER (LADWP) BOARD APPROVAL LETTER ~ TO: BOARD OF WATER AND POWER COMMISSIONERS DATE: January 24,2011 :. I SUBJECT: ~~~ RAM I RONALD 0. NICHOLS Chief OperaJipg Officer General Manager Specification No. 217 Furnish and Deliver Broadcaster Network Equipment and Software Recommended Award To: Evertz Microsystems, Ltd. Ontario, Canada &-ua.jcfl;vd.m-.. CECILIA K.T. WELDON Chief Administrative Officer FOR COMMISSION OFFICE USE: RESOLUTION NO. _.. ITY COUNCIL APPROVAL 11 II REQUIRED: Yes [2] No 0 IF YES, BY WHICH CITY CHARTER SECTION: 373 PURPOSE The attached Resolution recommends approval of a sole source award to Evertz. Microsystems, Ltd. (Evertz) the manufacturer of the original equipment, to furnish and deliver broadcaster network equipment and software. COST AND DURATION Estimated Expenditure Original Period First Optional Period Second Optional Period. Third Optional Period Fourth Optional Period Contract Total $ 950, , , , , $4",750, The maximum purchase will not exceed $4,750, This contract is for a term of one year with four optional one-year periods.
5 Board of Water and Power Commissioners Page 2 January 24, 2011 BACKGROUND LADWP has contracted with Evertz for a period of three years under Contract No. N-785, which expired February 15, Contract No. 217 will effect continued contracting with Evertz, and exceeds the contract term limit of three years established by City Charter Section 373, thereby requiring City Council approval in accordance with Administrative Code LADWP's Fiber Optic Enterprise identified digital video transport service as an innovative growth opportunity serving Los Angeles' extensive entertainment industry. This service provides uncompressed analog, digital and high definition video transport circuits over LADWP's fiber optic network connecting studios, broadcasters, entertainment venues, telecom hubs, and other sites in Los Angeles, known as VideoMAN (Metropolitan Area Network). The LADWP approved formal Contract No: N-785 to pwchase broadcaster video network hardware and software equipment from Evertz on an as needed basis expired on February 15, Specification N-785 resulted in only one bid response, resulting in a negotiated award. As a result of this contract, LADWP developed the Video MAN infrastructure, and set up the backbone and customer premise equipment for commercial use. The video transport network product must inter-member with existing LADWP.network equipment already deployed. The hardwar~ components and its associated monitoring and management software are proprietary and solely manufactured by Evertz, therefore it is critical for LADWP to establish a new contract with Evertz. Th is will ensure product compatibility and cost effectiveness in network system expansion, since Evertz' products are proprietary. Without the contract, LADWP will not be able to support the existing customers and will suffer customer and revenue loss. The broadcaster video network service is a profit center for LADWP as it promotes price competition,.assists our customers in their growth, expansion, profitability, and helps keep jobs in Los Angeles. This supports the LADWP's mission to assist in the City's economic development and provide beneficial services for the citizens and businesses in Los Angeles. This revenue stream has not only offset all expenditures in labor and equ ipment cost for the circuits deployed, it continues to generate in excess of half a million dollars in annual profit on an c;m-going basis.
6 Board of Water and Power Commissioners ' Page 3 January 24, 2011 Per Charter Section 373, Los Angeles City Council approval is required. Accordingly, attached is the signed City Administrative Officer report dated January 4, METHOD OF SELECTION D Competitive 0 Cooperative Purchase [;8J Sole Source RECOMMENDATION It is requested that your Honorable Board adopt the attached Resolution recommending the Los Angeles City Council's approval of Specification 217. HSL:vb Attachments e-c/att: Ronald 0. Nichols Raman Raj Richard M. Brown Aram Benyamin James B. McDaniel.Cecilia K.T. Weldon Lorraine A. Paskett. Ann M. Santilli Anselmo G. Collins Maria Sison-Roces Matthew Lampe Kenneth Kinsey Helena H,sieh
7 '.. TO Austin Beutner, Interim General Manager Department of Water and Power FROM The Mayor TRANSMITTAL DATE '.. rjan COUNCIL FILE NO. COUNCIL DISTRICT PROPOSED SOLE-SOURCE AGREEMENT FOR VIDEO' NETWORK HARDWARE AND SOFTWARE EQUIPMENT BElWEEN LADWP AND EVERTZ MICROSYSTEMS, LTD. ' Approved and transmitted for further processing including Council consideration. see the city Ad mini~ Office{;j~ MAS:RPR: t MA ~ye Williams. (COPY) CAO 649-<1
8 REPORT FROM.OFFICE OF THE CITY ADMINISTRATIVE OFFICER Date: December 21,.2010 CAD File No.: Council File No.: Council District: To: The Mayor From: Miguel A. Santana, City Administrative Office~ C ~ R~ference:. Transmittal from the Department of Water and Power dated September 15, 2010; referred by the Mayor for report on September 24, 2010 Subject: PROPOSED SOLE-SOURCE AGREEMENT FOR VlDEO NETWORK HARDWARE AND SOFTWARE EQUIPMENT BETWEEN LADWP AND EVERTZ. MICROSYSTEMS, L TO. SUMMARY The Department of Water and Power (DWP; Department) requests approval of a resolution which authorizes the Department to execute a proposed, sole-source Agreement Specification No. 217 (Agreement) with Evertz Microsystems, Ltd. (Evertz) to provide proprietary video network transport hardw~re and software equipment for the Video Metropolitan Area Network (Video MAN) system. The DWP VideoMAN system enables the transfer of uncompressed analog, digital, and high definition. video over DWP's fiber optic network in Los Angeles. Approval of the proposed Agreement, which replaces a similar agreement with Evertz that expired in February 2010, provides a o.n~ year term with four optional one year extensions, and offers a 25 to 30 percent discount off the latest Evertz catalog pricing. The total expenditure amount is.notto exceed $4;75 million for the five year contract term. In accordance with Charter Section 373, Council approval is required for long term contracts that exceed three years. The City Attorney has approved the proposed resolution as to form and legality. The original agreement with Evertz was released for competitive bidding and resulted in only one bid response, which then had the outcome of a negotiated award in February DWP advises that the current system is proprietary and Evertz is the equipment manufacturer. As such, Evertz is the only source of additional or replacement components, which are essential for system compatibility; thereby the use of a competitive process would be impractical. Through the original agreement with Evertz, DWP installed the digital video transport infrastructure to support various industries within the City such as the medical services, universities, and entertainment. According to the Department, the VideoMAN system has generated ov~r $3 million since implementation and has been a DWP profit center that promotes industry price competition, assists customers with growth and expansion opportunities, and helps to keep jobs in Los Angeles. This supports the DWP's mission to assist in the City's economic development and provide beneficial services for the citizens and businesses in Los Angeles. Furthermore, DWP states that the video
9 CAO File No. PAGE transport service industry is highly competitive with neighboring cities such as Burbank and Santa Monica constructing their own infrastructure and offering similar services to encourage video related bus.inesses in Los Angeles to relocate. Without approval of this Agreement, DWP states it will not be able to support the existing customers and will expect t? lose customers and revenue. The above-mentioned aspects of the proposed resolution, and this report, are based upon revised information received from the Department subsequent to the initial request submittal. ' CONTRACTING COMPLIANCE The City Attorney has approved the proposed resolution The Agreement is exempt from the requirements of the California Environmental Quality Act (CEQA). pursuant to the General Exemptions described in Section (b )(3) of the Los Angeles City CEQA Guidelines. According to the Department, Evertz will comply with the provisions of all applicable contracting ordinances. Additionally, all DWP conflict of interest procedures were followed and no issues were identified. In accordance with Charter Section 1022, it has been determined that the work specified in the Agreement can be performed more economically and feasibly by Independent Contractors than by City employees. Pursuant to Charter Section 373, Council consideration o'f this Agreement is required because the term exceeds three years. "RECOMMENDATION That the Mayor: 1. Approve the proposed rej;olution which authorizes the Department of Water and Power to execute a sole-source Agreement Specification No. 217 with Evertz Microsystems, Ltd. to provide proprietary video network transport hardware and software equipment, for the Video Metropolitan Area Network system, with a total expenditure amount not to exceed $4.75 million over a five year contract term; and 2. Return the proposed resolution to the Department for further processing, including Council consideration. FISCAL IMPACT STATEMENT Approval of the proposed Agreement will result in a nofto exceed expenditure amount of $4.75 million from the DWP Joint System Budget. The Department states that the proposed resolution is consistent with the DWP's Financia l Policies. Since the Department of Water and Power is bound only by the City De.bt Management Policies, the City Financial Policies are not applicable. Approval of the proposed resolution will have no impact on the City's General Fund.
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