ORDINANCE No. 178170

*Authorize contract with Cayenta Canada, Inc. for a replacement of the water and sewer utility customer information billing system (Ordinance)

The City of Portland ordains:

Section 1. The Council finds:

1.  Resolution 36009 (as amended), adopted by the Council on July 12, 2001, directed the City’s Chief Administrative Officer (CAO) to undertake an assessment of the City’s current automated utility customer information, billing, accounting, reporting and collection system (CIS).

2.  In addition to identifying options to resolve problems with the City’s current CIS, Resolution 36009 also directed the CAO to identify alternative systems to the current CIS.

3.  Resolution 36047, adopted by the Council on December 19, 2001, directed implementation of recommendations contained in the final report of the CIS assessment team (Assessment Report) completed under the direction of the CAO and in accordance with Resolution 36009.

4.  The Assessment Report recommended that the City’s current CIS should be stabilized while meeting minimum business requirements, and that a maintenance and support agreement be obtained for the system.

5.  The Assessment Report also concluded that beyond meeting minimum business requirements, the City’s current CIS is unlikely to be a viable long-term solution for the City, and that the City should be cautious about making future investments in the system, beyond those necessary to achieve stability.

6.  In September 2002 the Commissioner-in-Charge of the Bureaus of Water Works and Environmental Services (Commissioner), with the advice and support of the Mayor and other members of the Council, directed the CAO to issue a Request for Proposals (RFP) for a replacement CIS in accordance with City Code Chapter 5.68

7.  The RFP was issued in December 2002 and twelve responses were received in January, 2003.

8.  All proposals were initially reviewed by a consultant selection committee composed of fifteen (15) City staff and outside advisors and consultants representing the City’s water and sewer utilities, accounting, auditing and technical interests (Selection Committee) to determine if they met forty-four (44) minimum requirements as specified in the RFP.

9.  Five proposals met minimum requirements and were further evaluated by the Selection Committee against 973 detailed City business requirements as specified in the RFP.

10.  The Selection Committee rated four proposals highest, invited each to day-long interviews, followed by two-day long product demonstrations with each proposer (including in-depth “white paper” discussions on technology and accounting issues), and completed reference checks on each.

11.  The Evaluation Committee rated two proposals as equivalent in being able to meet the City’s business requirements as specified in the RFP, but recommended Cayenta Canada, Inc. (Cayenta) as the lead proposal because of a significant difference in initial cost, and differences in the risk that the total initial cost or implementation schedule could be exceeded.

12.  The CAO, and the CIS Executive Committee (composed of the Directors of the Bureaus of Water Works, Environmental Services and Technology Services) directed that the Selection Committee complete further due diligence activities to further verify the probable costs of proposals, their accounting and other functional capabilities, further investigate the corporate structure and financial performance of proposers, and further investigate current and past customer experiences with each product.

13.  Following conclusion of this additional due diligence activity and discussions with the CIS Executive Committee, the Selection Committee again unanimously rated the Cayenta proposal the highest.

14.  At the direction of the CAO and the CIS Executive Committee, the Selection Committee engaged Cayenta in a two-day “mini gap analysis” to identify, at an even higher level of detail, any differences between their product and City business requirements that may require modifications to their product, or reveal that Cayenta’s product will not meet City needs.

15.  Members of the Selection Committee also visited a current Cayenta customer site to discuss their use of the same system the City will acquire, their experiences with subsequent maintenance and support, and their contracting experience with Cayenta.

16.  The Selection Committee briefed the CAO, CIS Executive Committee, the Mayor, Commissioner, other members of the Council and the media, and filed a Report on their findings, which the Council accepted on August 13, 2003, concurring that contract discussions with Cayenta should proceed.

17.  The City has now prepared and negotiated a contract with Cayenta, including a detailed Statement of Work and Terms and Conditions that are acceptable to the CAO, the CIS Executive Committee and the City Attorney, all of whom are in agreement that the documents accurately reflect the scope and work for replacing the City’s current CIS, the obligations of both the City and Cayenta in accomplishing this work, and that the City has protections in the event of dispute with Cayenta that are beyond those normally included in industry contracts for transactions of this type.

18.  The contract provides for thorough testing of the system before live operation, and for additional “cycle simulation” testing at the City’s option on a time and materials basis in an amount not to exceed $160,000.00.

19.  The contract includes Cayenta and Cayenta supplied third-party software maintenance and support costs for the first year of live operation of the replacement CIS.

20.  The contract includes an estimate of $450,000.00 for reasonable and necessary Cayenta expenses incurred in the performance of their work on this project, with actual approved expenses to be reimbursed by the City.

21.  Because of the complexities of this project, contract amendments to the schedule, cost, or other matters may need to be made.

NOW, THERFORE, the Council directs:

a.  The Mayor and Commissioner in charge of the Bureaus of Water Works and Environmental Services are hereby authorized to execute the contract with Cayenta, attached hereto as Exhibit A.

b.  The Mayor and the Auditor are hereby authorized to draw and deliver payments in accordance with the terms of the contract in an amount not to exceed $4,103,513.00.

c.  The Chief Administrative Officer, after prior discussion with the CIS Executive Committee and approval of the Mayor and the Commissioner(s)-in-charge of the Bureaus of Water Works and Environmental Services, may amend the contract amount any number of times up to a total of ten percent (10%) of the original contract amount of $4,103,513.00 without further authorization by the Council; thereafter, all such amendments that increase the contract amount shall be approved by Council.

d.  For purposes of the Chief Administrative Officer’s authority to amend the contract amount, any increase of up to $160,000.00 for “cycle simulation” testing is not considered to be an amendment to the contract.

e.  The Chief Administrative Officer is authorized, after prior discussion with the CIS Executive Committee, to amend the contract schedule any number of times, including due dates for payments to Cayenta, as long as any such amendment does not itself, or in aggregate with other previous amendments, extend the date at which the replacement system will enter live operation by more than ninety (90) days from that specified in the Contract.

f.  The Chief Administrative Officer is further authorized, after prior discussion with the CIS Executive Committee, to approve any other contract amendment.

g.  All costs of the contract with Cayenta shall be reimbursed to the Office of Management and Finance on an equal basis by the Bureaus of Water Works and Environmental Services.

h.  The Bureau of Financial Services is hereby directed to make any necessary interagency and budget adjustments to the appropriations of the Office of Management and Finance, and the Bureaus of Water Works and Environmental Services.

i.  The Office of Management and Finance shall prepare necessary documents for Council to separately authorize Cayenta and associated third-party software maintenance and support beyond the first year of live operation of the replacement CIS.

j.  The Chief Administrative Officer shall periodically provide the Mayor, the Commissioner(s)-in-Charge of the Bureaus of Water Works and Environmental Services, and other members of the City Council with a project update.

Section 2. The Council declares that an emergency exists in order that there be no delay in the CIS replacement project; therefore, this Ordinance shall be in full force and effect from and after its passage by the Council.

BACKING SHEET INFORMATION

AGENDA NO. 68-2004

ORDINANCE/RESOLUTION/COUNCIL DOCUMENT NO. 178170