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<br /> <br />Item 2. <br /> <br />MEMORANDUM <br /> <br />TO: Mayor and City Council <br /> <br />FROM: Lori Johnson, Finance Director <br /> <br />DATE: March 3 I, 2003 <br /> <br />SUBJECT: Consider Award of Phone System Bids <br /> <br />The city recently requested telephone system bids for a voice over internet protocol ry olP) <br />system. Staff wanted to evaluate this system against a traditional PBX to determine whether <br />the anticipated additional cost justified the additional V oIP benefits. <br /> <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 V oIP enabled meaning it can function both as a traditional PBX and a V oIP <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 /> <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 V oIP 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 /> <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 V oIP 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 />