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Item 2. <br /> City of <br /> Elk <br /> River <br /> MEMORANDUM <br /> TO: Mayor and City Council <br /> FROM: Lori Johnson, Finance Director <br /> DATE: March 31, 2003 <br /> SUBJECT: Consider Award of Phone System Bids <br /> The city recently requested telephone system bids for a voice over intemet protocol (VoIP) <br /> system. Staff wanted to evaluate this system against a traditional PBX to determine whether <br /> the anticipated additional cost justified the additional VoIP benefits. <br /> The city received bids from six vendors for seven telephone systems. Bid prices ranged from <br /> $74,905.00 to $160,198.65. However, the low bidder did not include all of the required <br /> equipment so that bid was not considered valid. The next lowest bidder, Inter-Tel, bid a <br /> system that is VoIP enabled meaning it can function both as a traditional PBX and a VoIP <br /> system. Inter-Tel's bid was $94,845.59. The lowest bid for a true VoIP system was <br /> $105,131.00 plus the cost to connect the off site locations. <br /> After much research and thorough review of the systems proposed, IT Coordinator Bob <br /> Pearson is recommending that the city not proceed with the VoIP system because the <br /> benefits do not out weigh the additional cost of over $10,000. The attached memo from <br /> Bob provides more technical information on his recommendation to reject all of the <br /> proposals and award the telephone contract through the State of Minnesota's Cooperative <br /> Purchasing Venture. <br /> Inter-Tel is a contract holder under the Cooperative Purchasing Venture; therefore, the city <br /> may purchase off the State contract without going out for bids. Inter-Tel and state <br /> representatives have confirmed that the city may purchase a system from Inter-Tel at the <br /> price Inter-Tel submitted under the city's request for proposals. This price is substantially <br /> less that the State contract price. Selecting this system will allow us to choose between <br /> traditional or VoIP as it best fits our needs for the various city departments and locations <br /> including the fire, public works,wastewater, and recreation departments. The system has also <br /> been designed to accommodate the needs of Elk River Municipal Utilities. Although the city <br /> will have one telephone system, it will operate as though there were two or possibly three <br /> • <br />