4. Pay And Display - Ottawa Option Procurement

Affichez Et Payez – Processus D’acquisition D’option Ottawa

Committee Recommendations As Amended

That Council approve:

1. That the Deputy City Manager of City Operations be delegated the authority to finalize and execute the Parking Operations System Agreement with Precise ParkLink Inc. in accordance with their final offer and the Request for Submissions document.

2. That the Deputy City Manager of City Operations be delegated the authority to proceed with a separate competitive procurement for the implementation of a Pay-by-Cell component of the Parking Operations System as outlined in this report and enter into an agreement with the successful bidder.

3. That subject to Council approval on December 9, staff be directed not to reinstall the single-space parking meters on Preston Street, and paid parking will resume with the installation of Pay and Display meters, anticipated to occur in April 2010.

Recommandations Modifiées du comité

Que le Conseil approuve ce qui suit

1. Que l’on délègue au directeur municipal adjoint des Opérations municipales le pouvoir de conclure une entente pour l’acquisition d’un système d’exploitation de stationnement avec Precise ParkLink Inc. conformément à son offre finale et aux conditions stipulées dans la sollicitation de propositions.

2. Que l’on délègue au directeur municipal adjoint des Opérations municipales le pouvoir d’entamer un processus d’approvisionnement distinct pour la mise en place d’un service de paiement par cellulaire qui se greffera au système d’exploitation de stationnement, conformément au présent rapport, et également de conclure une entente avec le soumissionnaire retenu.

3. Que, sous réserve de l’approbation du Conseil le 9 décembre, le personnel soit enjoint de ne pas réinstaller les parcomètres sur la rue Preston et que le stationnement payant ne reprenne qu’avec l’installation des distributrices Payez et affichez, qui devrait avoir lieu en avril 2010.

Documentation

1. Deputy City Manager’s report, City Operations, dated 25 November 2009 (ACS2009-COS-PWS-0031).

2. Extract of Draft Minute, 2 December 2009.

Report to/Rapport au :

Transportation Committee

Comité des transports

and Council / et au Conseil

25 November 2009 / le 25 novembre 2009

Submitted by/Soumis par :

Steve Kanellakos, Deputy City Manager/Directeur municipal adjoint,

City Operations/Opérations municipales

Contact Person/Personne-ressource:

John Manconi, General Manager/directeur général, Public Works/Travaux publics

613-580-2424 extension / 21110, John.Manconi@ottawa.ca

City Wide/à l'échelle de la Ville

Ref N°: ACS2009-COS-PWS-0031

SUBJECT:	PAY AND DISPLAY - OTTAWA OPTION PROCUREMENT

OBJET :	AFFICHEZ ET PAYEZ – PROCESSUS D’ACQUISITION d’option ottawa

REPORT RECOMMENDATIONS

That the Transportation Committee recommend that Council approve:

RECOMMANDATIONS DU RAPPORT

Que le Comité des transports recommande au Conseil d’approuver ce qui suit

EXECUTIVE SUMMARY

In December 2007, the City Manager received an unsolicited proposal from Precise Parklink Inc. (“Precise”) with respect to the implementation, operation and maintenance of Pay and Display parking technology in Ottawa. The proposal was deemed to be ‘innovative’ and therefore qualified under the City’s Ottawa Option Policy, primarily due to the inclusion of a revenue guarantee, which assures the City of a minimum increase in on-street parking revenue as a result of the installation of Pay and Display machines.

In April 2008, City Council directed staff, “to proceed with the negotiations with Precise ParkLink Inc. regarding their proposal to implement Pay and Display technology in the City of Ottawa, under the framework of an Ottawa Option”. This direction to proceed was under the original Ottawa Option Policy, as approved by Council in October 2002.

Following receipt of this direction from Council, staff proceeded in a manner consistent with the original Ottawa Option Policy by clarifying the City’s requirements for a Parking Operations System and by developing a comprehensive series of documents in this regard. The resulting Request for Submissions (RFS) document included submission instructions (including the Minimum Response Requirements), specifications for the equipment and services required and the draft acquisition agreement. Precise re-submitted their proposal in March 2009 based on the RFS and this proposal was evaluated and deemed to be compliant with the Minimum Response Requirements.

The proposed Parking Operations System RFS was presented to Transportation Committee and City Council in April 2009, at which time staff was directed to proceed with the RFS and have it “serve as the basis for the next phase of the Ottawa Option procurement process, being the solicitation of proposals other than the Precise Parklink Inc. proposal”.

Subsequently, the Parking Operations System RFS was posted on MERX for the purpose of soliciting competing proposals. The final submission closing date was July 30, 2009 upon which the City received one (1) submission from Vinci Park Services Canada Inc. (Vinci Park).

The RFS evaluation process has resulted in the City’s evaluation committee finding the submission from Vinci Park to be non-compliant with the Minimum Response Requirements specified in the Parking Operations System RFS, and as a result this proposal received no further consideration. This evaluation process has been validated by the Fairness Commissioner. As a result, Precise has been identified as the ‘Final Preferred Proponent’, consistent with the process outlined in the RFS. Subject to a field test being completed over the winter period (to the City’s satisfaction), the due diligence process has been completed and no material issues have been identified at this time.

As indicated, this procurement is for an integrated Parking Operations System that will be based largely on the implementation of widespread Pay and Display technology and the replacement of existing technology as required in the City’s off-street lots. It also involves the provision of all products and services relating to equipment maintenance, coin collection and the back office (i.e. Central Management System). The Contractor will be responsible for adhering to pre-defined performance levels that will mandate a high level of service to the City and its residents (for example, the Pay and Display machines must operate properly 99.8% of the time). The City will continue to be responsible for policy development in accordance with the Council approved Municipal Parking Management Strategy (i.e. determining where and when paid parking will apply, the rates to be charged and the maximum parking periods permitted), and Bylaw Enforcement, as well as the management of the contract. The latter will involve diligent monitoring and auditing functions so as to ensure that all services are provided at or above an acceptable level.

Provided Council approves proceeding with the finalization of the Parking Operations System Agreement as recommended, the next step would be to conduct discussions with Precise towards this end. Following the execution of the Agreement, all parties would begin to move forward with the implementation of the Parking Operations System. Comprehensive testing protocols are in place to ensure that the equipment and back office services being provided to the City meet all system specifications, are installed and configured properly and perform in accordance with the standards outlined in the Parking Operations System Agreement.

It is recognized that there is a considerable communications requirement involved in the roll-out of wide spread Pay and Display technology in Ottawa. A comprehensive and thorough Communication Plan is under development and will be in place in advance of implementation.

Pursuant to Council direction, a Fairness Commissioner has been, and will continue to be, involved in all aspects of this Ottawa Option procurement process. The Fairness Commissioner has prepared an interim report (dated October 29, 2009), which is available as Document 3 and certifies the process has been undertaken in accordance with the City of Ottawa’s original Ottawa Option Policy and according to the principles of fairness, openness and transparency.

Legal/Risk Management Implications

There are no legal/risk management impediments to implementing the recommendation in this Report.

Financial Implications:

The approval of the recommendation contained in this report will result in an increased contribution to the Net Parking Operating Reserve of $1,708,000 per year. The increased contribution will provide funding for parking related projects as directed by Council in accordance with the Municipal Parking Management Strategy and funding for capital payments for the Pay & Display equipment starting in year six of the agreement.

The only expenditures to the City that are anticipated as a result of implementing a Pay-by-Cell system relate to signage, communications, etc. These are expected to be one-time costs of approximately $20,000.

The 2010 Operating Budget along with future operating and capital budgets will be adjusted to accommodate the implementation of the Parking Operations System and the Pay-by-Cell system and contract requirements.

RÉSUMÉ

Au mois de décembre 2007, le directeur municipal a reçu une proposition spontanée de Precise Parklink inc. (« Precise ») pour l’installation, la mise en service et l’entretien de distributrices de billets pour stationnement à Ottawa. La proposition a été jugée « novatrice » et, par conséquent, recevable au regard de la politique d’Option Ottawa. Elle avait l’avantage, notamment, de comprendre une garantie de revenu qui assurerait à la Ville une augmentation minimale des recettes du stationnement dans les rues.

Au mois d’avril 2008, le Conseil municipal a demandé au personnel de la Ville d’« entreprendre des négociations avec Precise ParkLink inc. pour donner suite à sa proposition spontanée visant l’installation de distributrices de billets dans les stationnements payants de la Ville, dans le cadre d’Option Ottawa ». Cette instruction a été donnée au personnel dans le cadre de la politique initiale d’Option Ottawa, approuvée par le Conseil en octobre 2002.

Le personnel a alors procédé conformément à la politique d’Option Ottawa, en clarifiant les exigences de la Ville quant à un système d’exploitation de stationnement et en produisant une série complète de documents à cet effet. Le document de sollicitation de propositions, notamment, contenait des instructions (incluant les exigences minimales), un cahier des charges visant le matériel et les services requis, et la version préliminaire de l’entente d’acquisition. En mars 2009, Precise a soumis une nouvelle proposition formulée en fonction du cahier des charges, et cette proposition a été évaluée et jugée conforme aux exigences minimales.

La proposition a été soumise au Comité des transports et au Conseil municipal en avril 2009. Le personnel a alors été chargé d’aller de l’avant et d’« entamer la prochaine étape du processus d’acquisition Option Ottawa, soit la sollicitation d’autres propositions ».

La sollicitation de propositions a été affichée sur www.merx.com (MERX). Les intéressés avaient jusqu’au 30 juillet 2009 pour soumettre une proposition. La Ville a reçu une (1) proposition, de Vinci Park Services Canada inc. (Vinci Park).

Après avoir étudié la nouvelle proposition, le comité d’évaluation de la Ville l’a déclarée non conforme aux exigences minimales spécifiées dans la sollicitation. Par conséquent, la proposition de Vinci Park n’a pas fait l’objet d’une analyse plus poussée. Ce processus d’évaluation a été validé par le commissaire à l’équité. C’est ainsi que la proposition de Precise a été retenue comme proposition finale privilégiée, conformément au processus établi dans la sollicitation de propositions. Si les résultats de l’essai qui sera effectué cet hiver satisfont la Ville, le processus de diligence raisonnable aura été respecté et aucun problème majeur n’aura été rencontré.

Cette acquisition vise un système d’exploitation de stationnement intégré qui repose sur l’adoption d’une solution technologique très répandue ― les distributrices de billets pour stationnement ― et le remplacement des appareils existants dans les zones de stationnement payant hors rues de la Ville. Elle comprend aussi la prestation de tous les produits et services liés à l’entretien des distributrices, à la collecte de l’argent et aux services administratifs (c.-à-d. le système de gestion central). L’entrepreneur sera tenu de respecter des niveaux de rendement prédéfinis pour assurer un service de qualité à la Ville d’Ottawa et aux usagers (par exemple, un taux de fonctionnement des distributrices atteignant 99,8 %). La Ville continuera d’assumer la responsabilité des politiques afférentes (par exemple, quant aux endroits et aux périodes où appliquer le stationnement payant, aux tarifs et à la durée maximale du stationnement), de l’application du règlement, ainsi que de la gestion du contrat. La Ville assumera également des fonctions de vérification et de surveillance diligente, pour s’assurer que tous les services seront fournis à un niveau acceptable, voire plus.

Si le Conseil décide d’aller de l’avant conformément à la recommandation, la prochaine étape sera d’amorcer des pourparlers avec Precise Parking en vue d’aboutir à une entente finale. Par la suite, toutes les parties travailleront de concert à la mise sur pied du nouveau système. Des protocoles de vérification rigoureux ont été établis pour garantir que l’équipement et les services qui seront fournis à la Ville seront conformes au cahier des charges, que les installations et configurations seront adéquates et que le fonctionnement répondra aux normes fixées dans l’entente.

Le déploiement à vaste échelle du nouveau système de distributrices de billets pour stationnement exige incontestablement une solide stratégie de communication. Un plan de communication exhaustif est en voie d’élaboration; il sera adopté avant la mise en service du système.

Conformément à une directive formulée par le Conseil, un commissaire à l’équité prend part à tous les aspects du processus d’acquisition Option Ottawa. Dans son rapport provisoire (en date du 29 octobre 2009), le Document 3, le commissaire certifie que le processus est conforme à la politique d’Option Ottawa et aux principes d’équité, d’ouverture et de transparence.

Répercussions juridiques ou touchant la gestion des risques

L’application des recommandations n’entraînera pas de répercussions juridiques ou touchant la gestion des risques.

Répercussions financières :

L’approbation de la recommandation de ce rapport se traduira par une augmentation de 1 708 000 $ par année de la contribution à la réserve d’exploitation nette du stationnement. Cette augmentation permettra de financer des projets liés au stationnement conformément aux instructions du Conseil et en accord avec la Stratégie municipale de gestion du stationnement, ainsi que de faire des paiements de capital pour les distributrices de billets pour stationnement à partir de l’an six de l’entente.

Les seules dépenses qu’encourt la Ville pour la mise en place du système de paiement par cellulaire concerne la signalisation, les communications, etc. On évalue ces frais non récurrents à environ 20 000 $.

Le budget de fonctionnement de 2010 ainsi que les prochains budgets de fonctionnement et d’immobilisation seront révisés en vue de la mise en place du système d’exploitation de stationnement et du système de paiement par cellulaire et du respect des obligations contractuelles.

BACKGROUND

In December 2007, the City Manager received an unsolicited proposal from Precise Parklink (“Precise”) with respect to the implementation, operation and maintenance of Pay and Display parking technology in Ottawa. This proposal was reviewed by staff and submitted to Council under the City’s Ottawa Option Policy (see Document 1 for a copy of this policy).

The proposal was deemed to be ‘innovative’ and therefore qualified under the Ottawa Option Policy. This was primarily due to the inclusion of a revenue guarantee, which assures the City of a minimum increase in on-street parking revenue as a result of the installation of Pay and Display machines.

City Council subsequently approved the following direction on 23 April 2008:

1. That staff be directed to proceed with the negotiations with Precise ParkLink Inc. regarding their proposal to implement Pay and Display technology in the City of Ottawa, under the framework of an Ottawa Option; and,

2. That the Request for Proposal process for the acquisition of Pay and Display machines be suspended.

Further, at the same meeting of City Council, Motion 35/18 directed that, “a Fairness Commissioner be engaged to participate in any competitive procurement process for the proposal for Pay and Display machines”.

Upon receiving Council approval to proceed with the Ottawa Option Policy on 23 April 2008, a Fairness Commissioner was engaged (in May 2008), and staff set out to clearly identify the City’s requirements for a Parking Operations System. A City working group was formed, which included representation from Legal Services, Finance, Supply Branch, Parking Operations as well as external consultants. Additional staff from Bylaw and Regulatory Services, Labour Relations, Treasury, Information Technology Services and Client Services were engaged as required through this part of the process. The working group was responsible for ensuring any proposal met the City’s requirements. Thus, in accordance with the Ottawa Option Policy, the working group identified and represented the technical requirements, scope and risk sharing elements for the Parking Operations System in the Request for Submissions (RFS), which also included the following:

Submission instructions, including the Minimum Response Requirements;
Specifications for the equipment and services required (Schedules);
Financial Terms – and a Price Schedule (to be completed by the proponent(s)); and,
Parking Operations System Agreement (the “Agreement”).

Precise was then asked to re-submit a priced proposal, certifying that the equipment and services to be provided will meet the City’s requirements as outlined in the RFS. Precise’s proposal was subsequently evaluated and deemed to meet all of the Minimum Response Requirements.

On April 15, 2009, and April 22, 2009, these documents were presented to Transportation Committee and Council respectively in a report that outlined the proposed Parking Operations System, provided a summary of the re-submitted proposal from Precise and outlined the steps required to proceed with the competitive process under the Ottawa Option Policy. For reference, the Request for Submissions document remains on file with the City Clerk’s office.

City Council approved the following direction on April 22, 2009:

1. That the attached Request for Submission, which sets out the City’s requirements for a Pay and Display parking system, serve as the basis for the next phase of the Ottawa Option procurement process, being the solicitation of proposals other than the Precise Parklink Inc. proposal.

On May 1, 2009, a Request for Submissions (RFS) was issued to the market place via MERX. The results of the solicitation are discussed within this report.

The report will also review the specifications of the Parking Operations System, summarize the evaluation process that has been undertaken, review the results of the financial analysis and address the next steps that would be required to implement a Parking Operations System.

DISCUSSION

In response to Precise’s unsolicited proposal and consistent with Council direction, the City has proceeded with the procurement of an integrated Parking Operations System under the original Ottawa Option Policy. This Parking Operations System will be based on the implementation of widespread Pay and Display technology and the replacement of existing technology as required in the City’s off-street lots. It also involves the provision of all products and services relating to equipment maintenance, coin collection and the back office (i.e. Central Management System).

A representation of this system is illustrated in Chart 1 below:

Chart 1: Overview of Parking Operations System

The introduction of widespread Pay and Display technology:

· Offers convenient payment options, including the three major credit cards and Smart Cards;

· Provides customers with a receipt;

· Increases the number of on-street parking spaces available;

· Provides improved flexibility and ease in implementing different payment requirements in different areas and at different times;

· Provides for easier identification and rectification of any problems with the introduction of a Central Management System; and,

· Provides for more detailed financial reporting of parking revenues, which will assist with planning and policy development, consistent with the City’s Municipal Parking Management Strategy.

Together, these enhancements will allow the City to address many existing deficiencies that were identified by the Auditor General in the 2008 Audit of the Parking Function.

Under the proposed arrangement, the responsibilities of the City and the Contractor will be as follows:

City Responsibilities:

· Policy development (determining where and when paid parking will apply, the rates to be charged and the maximum parking periods permitted);

· Bylaw Enforcement (ensuring the parking regulations are enforced);

· Management of the contract (ensuring the Contractor provides the services in accordance with the appropriate terms and conditions of the Agreement);

· Maintain and update signs and pavement markings related to on-street parking;

· Continued implementation of the Municipal Parking Management Strategy (including related studies); and,

· Continue to work directly with stakeholders on issues related to parking management and service.

Contractor Responsibilities:

· Supply Pay and Display machines on-street and at surface lots, and Parking Facility Payment System equipment for parking garages (i.e. Pay-on-Foot machines and related infrastructure such as entry/exit terminals);

· Operate and maintain on and off-street Pay and Display machines and off-street Parking Facility Payment Systems, including associated systems such as the Central Management System, consistent with the Agreement and as directed by the City;

· Upgrade and renew all payment machines as required to ensure continued operation and performance for ten years;

· Provide a revenue guarantee, ensuring a 25% increase in on-street revenue where parking meters are replaced with Pay and Display machines;

· Finance the machines so the City will only pay for them from the increase in on-street revenues, and then, only from the sixth year of the Agreement onwards; and,

· Respond to and resolve customer concerns (3-1-1 remains initial point of contact).

A series of Schedules (as attached to the Agreement) have been developed by the City to identify the minimum system specifications that the Contractor must meet and to provide clarity on the various roles and responsibilities of the parties during the term of the Agreement.

System Specifications and Terms of the Agreement:

These minimum specifications identify the equipment and services that the City will receive, and the terms and conditions are represented within the Parking Operations System Agreement. Staff has been diligent in ensuring that these address everything the City is anticipated to require, and provide the capacity to make changes that have not been anticipated.

Building on past experience with long-term service contracts, the specifications set clear performance standards and consequences for not meeting the standards. Both the draft Agreement and the minimum specifications were included in the RFS document that was approved by Council on April 22, 2009. A summary of the system specifications is provided as Document 2.

The Parking Operations System specifications are consistent with the original Precise proposal; however, pursuant to the Ottawa Option Policy, the City has adjusted and clarified the system requirements and established clear, measurable performance standards to ensure the system meets both the needs of customers as well as the City’s short- and long-term interests. The term of the Agreement is ten years, with the possibility of extending the term for an additional five years. The following are some of the key components:

The Contractor will:

· Deliver and install approximately 575 Pay and Display machines for on-street parking, 30 for off-street parking lots, and three Parking Facility Payment Systems for use in off-street garages, replacing current parking meters and Pay on Foot machines, as well as existing Pay and Display machines;

· Manage and operate a Central Management System that monitors, controls and operates the entire Parking Operations System. This will include the computer and communications systems as well as the human resources required to process credit card transactions, handle customer relations, dispatch maintenance requests, program the payment machines, reconcile the revenue, carry out quality control and testing, and report to the City;

· Provide a Warranty and Renewal Program that will provide the parts required for maintenance, the consumables (such as tickets), and any upgrades necessary to ensure the baseline functionality in all machines is maintained regardless of changes in the industry, such as evolving industry requirements or standards. For example, if the major credit card issuers start issuing cards without a magnetic stripe, the Contractor will have to modify the machines to accept these credit cards for payment. In addition, any machine upgrades that are added to Precise’s product line as a standard feature of their machines are to be provided to the City. The City is responsible for the costs of any new functionality that it wishes to add to the machines during the term of the Agreement and that are not similarly required or available;

· Provide on-site maintenance of all parking payment machines including removal of graffiti, machine repairs, and coin collection from the machines;

· At the City’s option, provide staff and services to support the maintenance of off-street facilities (e.g. cleaning, painting, etc.). The City will retain this function;

· Ensure that all machine displays, signs and customer information or customer service components are bilingual and meet the requirements of the Ontarians with Disabilities Act, 2001;

· Establish and operate a new Parking Smart Card program to replace the current City program;

· Ensure that all machines accept coins, City parking tokens, three major credit cards, and the Parking Smart Cards. Pay-on-Foot machines in the garages will also accept bills and provide change;

· Adhere to a series of performance standards. For example, all payment machines must be fully functional for 99.8% of their service hours, and there are required response and resolution times for various types of malfunctions. In the event that the Contractor fails to meet the performance standards, liquidated damages will be due to the City. The performance standards were designed to ensure there will be no reduction in service relative to what is currently experienced by users of paid parking services.

Some municipal staff in the Parking Operations, Maintenance and Development Branch execute functions similar to those identified above. By procuring a Parking Operations System, 14 positions will be directly affected (all of which are CUPE 503 positions).

The Final Preferred Proponent will reimburse the City for the costs of transferring, retraining and/or severing the employees under the organizational and technological change provisions of the collective agreement (currently estimated at $500,000). As identified in the system specifications, the Final Preferred Proponent is expected to conduct itself in a manner that respects the requirements of the collective agreement as well as any relevant legislation.

The CUPE 503 Collective Agreement provides two months for the Union to provide a detailed written proposal with respect to all services being procured. This window was identified to Council in the previous report and was available to the Union prior to this being posted to MERX. Prior to the previous report being tabled at Transportation Committee and Council, CUPE 503 indicated that it would not submit a bid for this contract.

Ottawa Option Procurement Process:

This procurement has proceeded under the original Ottawa Option Policy, as approved by City Council in October 2002. To date, the procurement process has involved:

· The receipt of Precise’s unsolicited proposal;

· Negotiations with Precise, as directed by Council in April 2008;

· The identification and clarification of the City’s requirements;

· The preparation of the comprehensive documents that comprised the Parking Operations System RFS;

· The receipt of Precise’s re-submitted priced proposal (March 2009);

· Evaluation of Precise’s re-submitted proposal which was determined to be compliant with the Minimum Response Requirements from the RFS; and,

· A report to Council in April 2009.

Following Council direction in April 2009 to proceed with a Parking Operations System RFS as the basis for the competitive part of this procurement process, staff posted the RFS on MERX to solicit competing proposals.

The RFS was posted on MERX on May 1, 2009, with an initial identified closing date of 30 June 2009. The posting to MERX also identified opportunities for potential proponents to obtain additional information and/or clarification on the RFS or the procurement process in general.

Each potential proponent had the opportunity to:

· Attend a Bidders’ Meeting and Site Tour;

· Submit Questions to the City; and/or,

· Request a Commercially Confidential Meeting.

Representatives from six organizations attended the Bidders’ Meeting and written questions were received from two prospective proponents. There were no requests for Commercially Confidential Meetings. Two requests were received to extend the RFS closing date by an additional month. The extension was granted and the closing date was revised to July 30, 2009, at which time one competing submission from Vinci Park (Canada) Inc. (Vinci Park) was received.

The RFS evaluation process, which was applied in the same manner for the competing submission as it had been for the original Ottawa Option proponent, was comprised of nine stages that are identified in Table 1 (additional information on each stage can be found in section 1.24 of the RFS document).

Table 1 – Stages of the Evaluation Process
Stage 1	Compliance with the Minimum Response Requirements per Annex “A” (of the RFS)
Stage 2	Evaluation of Financial Proposals
Stage 3	Selection of an Initial Preferred Proponent
Stage 4	Soliciting and receiving a final offer from the original Ottawa Option Proponent (if required)
Stage 5	Selection of the Final Preferred Proponent
Stage 6	Due Diligence
Stage 7	Assessment of any Options proposed by the Final Preferred Proponent
Stage 8	Present a recommendation to Transportation Committee and City Council
Stage 9	Conduct such negotiations as are necessary to finalize an Agreement and options (if necessary) with the Successful Proponent

Stage 1 involved a comprehensive review by an Evaluation Committee and various Sub-Committees (representing legal, financial and technical disciplines) to ensure that the Minimum Response Requirements from the RFS were satisfied and to ensure that all bids received were comparable, a condition which is required to ensure a fair evaluation process.

As was specified in the RFS document, proposals that did not include minimum responses for each of the Minimum Response Requirements would receive no further consideration, a process that is consistent with the City’s Purchasing By-Law. As such, in the event of the receipt of a non-compliant bid, the evaluation process could not advance to any further Stage in the evaluation process, including opening of financial proposals.

At Stage 1 of the evaluation process, the submission from Vinci Park was determined to be non-responsive, having not complied with Minimum Response Requirements from Annex A of the RFS document. This was the recommendation of the Evaluation Committee. As a result, the Vinci Park submission did not receive further consideration in accordance with the RFS evaluation process.

Whereas there were no compliant competing bids, the evaluation process proceeded directly to Stage 5 with Precise being identified as the ‘Final Preferred Proponent’.

A due diligence assessment was conducted with respect to the Final Preferred Proponent’s bid in accordance with Stage 6 of the Parking Operations System RFS evaluation process. The due diligence process has involved a number of tasks being undertaken by staff, including a detailed review of the documents submitted by Precise, reference checks (with other cities/organizations using the same equipment and/or services being offered), a demonstration of the various components of the Parking Operations System and further discussions with the Final Preferred Proponent. The purpose of the due diligence stage was to validate Precise’s ability to deliver a Parking Operations System in accordance with the system specifications as well as to carry out all of the services committed in its response to the RFS.

The City’s due diligence will include the installation of five of Precise’s Pay and Display machines at on-street locations (where there is a pre-existing Pay and Display machine), and one in an off-street surface lot. These machines will be in service over the winter months to enable the City to further validate the performance of these machines during winter conditions in Ottawa. Further, it will enable any operational and functional issues to be identified and remedied before a large-scale implementation.

Subject to the field test being completed to the City’s satisfaction, the due diligence stage of the evaluation process will be considered as having been completed.

As provided for under reserved rights set forth in the RFS, the City has undertaken negotiations with Precise in the time since they were identified as the Final Preferred Proponent. The outcome of these negotiations has been a reduction in the pricing from that which had been provided for in Precise's financial bid. This reduction in cost to the City has been achieved without any corresponding material reductions in the products or services to be supplied. Also negotiated was an increase in the revenue guarantee to now represent a 25% increase in on-street revenue where Pay and Display machines replace parking meters (originally proposed as 22%). A discussion of Precise’s financial bid and the corresponding financial analysis follows later in the report.

Representations to City Officials or Councillors:

Although the City does not encourage interaction between proponents and City officials or Councillors during a procurement process, the framework set out in the Ottawa Option Policy presents a unique situation. As Precise is the only remaining proponent in what remains an active procurement process, they would normally be prohibited from making representations to City officials or Councillors. However, it is possible that other companies who have a continuing interest in the process will endeavour to make representations to City officials or Councillors. These entities are not bound by the usual “no lobbying” provision contained in the Request for Submission.

In light of the foregoing, and in fairness to all proponents involved in this Ottawa Option procurement process, any representations that may be made to City officials or Councillors by proponents or interested parties will be limited to a period beginning on the date this report is made public (expected to be November 25, 2009) and ending on the day before the report is considered by Council (December 8, 2009). Following that period, all proponents will once again be prevented from making any representations to City officials (except the authorized City representative identified in the Request for Submissions) or Councillors, until such time that the Agreement is finalized and the procurement process is completed. This approach has been recommended by Supply, Legal Services and the Fairness Commissioner and is consistent with how this issue was addressed in the time preceding the previous report to Council in April 2009.

Councillors are not obligated to accept representations from, or meet with, any interested party. However, if meetings are requested, interested parties will be required to abide by the following protocol as proposed by the Fairness Commissioner:

· Information exchanges must be conducted in the presence of the Fairness Commissioner and City staff;

· No member of the City’s evaluation team may be in attendance;

· Information exchanges must be undertaken in good faith and be fact based;

· No commitments from the City shall be sought by interested parties or provided by City officials or Councillors during the information exchange(s);

· Reasonable notice of a request to meet with City officials or Councillors must be provided; and,

· Meetings are not to be exclusive with reasonable access provided to City officials and Councillors to any interested party.

The Fairness Commissioner has been (and will continue to be) involved in all aspects of this Ottawa Option procurement process, which ensures a transparent, open and fair procurement process. The Fairness Commissioner has prepared an interim report (dated October 29, 2009), which is attached as Document 3, and certifies the process to date has been undertaken in a fair, open and transparent manner.

Financial Arrangements:

The following represents the financial elements of the contract:

· The proponent must guarantee that the base on-street revenues will increase by at least 25% where Pay and Display machines replace parking meters. The base will be adjusted for any changes in rates, hours of operation, and any changes to paid parking areas as they occur. Mechanisms are in place to deal with such policy changes. If the parties are unable to reach an agreeable resolution, there are further conflict resolution mechanisms (e.g. mediation). If revenues are below the guaranteed amount, the proponent must pay the City the difference. The revenue guarantee is contingent on public compliance/enforcement levels remaining at the same levels as prior to implementation of the Pay and Display machines;

· The price of all parking payment machines (including those delivered in future years) is fixed, based on the proponent’s bid. The City only becomes liable for the cost when the machines are installed, tested and accepted as fully operational. The City will make no payments on these costs, and no interest will accrue for the first five years of the ten-year Agreement;

· Starting in the sixth year, interest will begin to accrue at 4.5% compounded annually, and the City will begin to make payments from all of the increased revenue the City is receiving as a result of the use of Pay and Display machines on the street;

· During the term of the Agreement, the City may make additional payments at any time (without penalty);

· At the conclusion of the Agreement, the City may keep the equipment and pay any remaining outstanding balance, return the equipment to the Contractor without making any further payments, or keep some of the equipment, paying any outstanding balance relating to the retained equipment, and return the rest;

· Throughout the term of the Agreement, the Contractor will receive a monthly fee based on the number of machines in service and the number of transactions processed. The monthly rates will only increase at three-quarters of the inflation rate annually. The monthly fee covers not only the operation of the parking machines and back-office system, but also the provision of the Warranty and Asset Renewal Program and other services required under the Agreement; and,

· For maintenance operations at off-street parking facilities (e.g. cleaning, painting, etc.), the City has the option to request the Contractor to conduct this work. At present, the City will retain this function. If at some point during the contract the City identified functions that it wished the Contractor to carry out, the Contractor would charge the City its actual out-of-pocket expenses related to those functions, plus a mark-up to cover management and administration costs. The City will identify the scope of work to be done by the Contractor annually, and may add or remove work at any time. All expenses must be identified by the Contractor and approved by the City in advance.

In summary, through this contract for a Parking Operations System, the City will be receiving new parking equipment including Pay and Display technology, as well as all coin collection, maintenance and back office services to fully support the infrastructure. In providing all of these services, the Contractor will be accountable for the functioning of the system in accordance with the specifications and will be monitored against defined service standards that will mandate a high level of service both to the City and to its residents.

Through the term of the Agreement, the City will continue to be responsible for policy development in accordance with the Council approved Municipal Parking Management Strategy (i.e. determining where and when paid parking will apply, the rates to be charged and the maximum parking periods permitted), and Bylaw Enforcement, as well as the management of the contract itself.

Financial Analysis:

An extensive financial analysis was undertaken in order to ensure that the City of Ottawa would receive financial value from the proposed Parking Operations System, in addition to the customer service and operational advantages discussed above.

As part of the report to Council in April 2008, it was presented that the proposal from Precise would increase the parking program’s net cash flow by $1,595,000 per year in years 1-5 of the agreement relative to continuing with parking meters (i.e. ‘status quo’). The change in net cash flow for years 6-10 was not estimated due to uncertain annual capital and finance costs. For the April 2008 report, calculations were based on initial cost estimates received from Precise.

Based on the pricing that was received with Precise’s re-submitted proposal and which was further clarified through negotiation, the net cash flow benefit to the City of proceeding with this procurement is now identified to be $1,708,000 in years 1-5 of the agreement. The total net operating benefit to the City over the term of this contract will be $4,925,000. This is illustrated in Table 2 below.

TABLE 2 – Financial Impact of Implementing a Parking Operations System
		Original Costing From Precise	Precise Contract*
	Status Quo	Years 1-5 (Per year)	Years 1-5 (Per year)	Years 6-10 (Per year)	Total (10-year term)
Net Parking Operating Revenue	4,252,000	5,847,000	5,960,000	5,960,000	59,960,000
Increase in Net Parking Operating Revenue (Compared to Status Quo)	--	1,595,000**	1,708,000	1,708,000	17,080,000

Capital Payments	--	0	0	2,021,000	10,105,000
Outstanding Capital Balance (End of year 10)					2,050,000

Net Benefit *** (Compared to Status Quo)	--	1,595,000	1,708,000	(313,000)	4,925,000

* This analysis of the Precise contract assumes: · 25% increase in on-street revenues · An initial order of 606 Pay and Display machines · Replacement of virtually all parking meters with Pay and Display machines · Current parking rates and hours of operation · Baseline revenues based on the 2009 Budget · 4.5% interest rate starting in year six · No prepayments on the capital costs · Retention of the equipment at the end of year ten and payment of outstanding balance Analysis undertaken in 2008 and based on 2007 parking program information * The Net Benefit does not make any allowance for the value of the equipment which the City will own at the conclusion, and which will still be in good operating condition due to the Warranty and Renewal Program.

Capital payments for the equipment begin in year six at which point interest in the amount of 4.5% compounded annually will accrue until the capital cost is paid in full. Staff will manage cash flow during the payment term to reduce the interest expense based on cash availability. These capital payments in years 6-10 will be equal to the increased revenue that results from on-street Pay and Display implementation (i.e. anything above current revenue levels, adjusted for changes in rates or areas served). As a result, based on a 25% increase in on-street revenues, these payments are projected to be $2,021,000 per year. At the end of year ten, it is projected that there will be a balance of $2,050,000 remaining. At that point, the City will have the option of selling the machines back to Precise (eliminating the balance) and procuring a different system, or retaining the machines and paying the balance. If the revenue increase is higher than 25%, the balance owing at the end of year ten will be smaller and there will be no balance at all if the increase experienced is 30% or higher. Table 3 illustrates what the impacts are of different levels of revenue increase.

TABLE 3 – Impacts of Different Revenue Increases Based on Contract Pricing
Revenue Increase	Increase in Net Parking Operating Revenue	Annual Capital Payments (Years 6-10)	Outstanding Capital Balance (End of Year 10)	Total Net Benefit* (Compared to Status Quo)
22%	1,465,000	1,779,000	3,375,000	2,380,000
25%	1,708,000	2,021,000	2,050,000	4,925,000
27%	1,870,000	2,183,000	1,165,000	6,620,000
30%	2,110,000	** 2,425,000	0	9,137,000
* The Net Benefit does not make any allowance for the value of the equipment which the City will own at the conclusion, and which will still be in good operating condition due to the Warranty and Renewal Program. ** The payment in year 10 would be reduced to $2,263,000, the outstanding balance at that time.

While the effects of a 22% revenue increase are illustrated in Table 3, this is only for comparison purposes. Table 3 shows the potential growth in net revenues if the total revenues increase more than the 25% guaranteed rate.

In accordance with the Municipal Parking Management Strategy that was approved by Council in April 2009, any net revenue taken in by the parking program will now be contributed to the Parking Reserve Fund to be spent on parking-related initiatives. Any plans related to the allocation of these funds will be presented to Council for approval on an annual basis as part of the Parking Operations, Maintenance and Development Annual Work Plan (starting in 2010). It has been identified that a portion of these contributions to the Parking Reserve Fund will be allocated to account for costs related to facility renewal (surface lots and parking facilities) and the future replacement of equipment. This approach will be consistent with the City Fiscal Framework and will ensure the Parking Reserve Fund will have sufficient funds to replace the Parking Operations System equipment at the end of the contract without requiring new financing.

After allowing for both the capital payments on the current Parking Operations System equipment and setting aside funds to purchase a replacement system at the end of this contract the funds available for other new initiatives are projected to be $3,251,000 annually in years 1-5 and $1,230,000 annually in years 6-10 (per Table 4).

Table 4 – Allocation of Net Parking Operating Revenue
	Precise Contract
	Years 1-5 (Per year)	Years 6-10 (Per year)	Total (10 year term)
Net Parking Operating Revenue	5,960,000	5,960,000	59,600,000

Capital Payments	0	2,021,000	*12,155,000

Contribution to Parking Reserve Fund	5,960,000	3,939,000	47,445,000

Requirement for Costs Related to Facility Renewal and Equipment Replacement	2,709,000	2,709,000	27,090,000

Available Funds for New Initiatives	3,251,000	1,230,000	20,355,000

* Includes payment of outstanding capital balance ($2,050,000) at the end of Year-10

In examining their re-submitted proposal, Precise’s costing was subjected to a detailed review. During the ensuing discussions with Precise and in accordance with the reserved rights in the RFS, negotiations took place that resulted in price reductions. These came in response to various issues, including a requirement for more conservative inflation assumptions, adjustments to the approach to be taken in providing a Parking Smart Card, and an agreement to share the benefits derived from economies of scale. On this last point, certain costs of implementing the Payment Card Industry Data Security Standards (PCI DSS) requirements that will initially only serve the City of Ottawa and the City of Toronto will over time serve all Precise clients as they convert to on-line credit card transaction processing. The cost to the City of Ottawa was decreased on the assumption future users will pay a share of the costs, although no assurance was given to Precise that this will be the case.

The prices were also compared to those paid by other Precise clients during the due diligence process, providing some assurance they are consistent with the market.

Next Steps:

Subject to Council approval, the next step as it relates to the procurement will be to finalize the Parking Operations System Agreement. Once the contract is executed, all parties will begin to move forward with the implementation of the Parking Operations System. The timing of the implementation will depend on a number of factors, including the time required to finalize the Agreement, weather / snow cover conditions in March and April and the time required to undertake testing. Table 5 provides current expectations of the timing of the steps to follow. As the timing for implementation is clarified and/or specific milestones are reached, this will be further communicated to Council.

Table 5 -	Remaining Steps in Ottawa Option Procurement Process / Implementation Process
Finalize Agreement (Effective Date)		January 2010
Installation of First Machines and Beginning of Testing Phase		Beginning April 2010
Conclusion of Testing Phase (Final Acceptance of installed machines/ Start of Management Period)		Early June 2010
Installation of Balance of Machines		Mid-June 2010 – End of August 2010
Implementation of Parking Facility Payment Systems		Starting September 2010

As is noted in Table 5, there are to be two installation phases for Pay and Display machines. The testing phase that is expected to start in April 2010 will involve the installation of approximately 100 Pay and Display machines (out of approximately 600 Pay and Display machines to be installed). The purpose of this installation will be to carry out the comprehensive testing protocols, as detailed in the system specifications (Schedule 5). These testing protocols are intended to ensure that the equipment and back office services being provided to the City meet all system specifications, are installed and configured properly, and perform in accordance with the standards outlined in the Parking Operations System Agreement. It will also enable the City to receive feedback from stakeholders such as BIA`s, places of worship, etc. on any communications/implementation issues and react accordingly. Only upon completion of all prescribed tests on the initial 100 machines (to the City’s satisfaction) will these installed machines be accepted by the City and the Management Period start. The rest of the machines will also be subjected to testing protocols that will allow the City to validate their functionality and performance prior to their ‘Final Acceptance’. The installation of the balance of the machines will be undertaken in the second installation phase that is expected to commence in June 2010 and conclude by the end of August 2010.

Installation details regarding sequencing, machine locations, etc. are being considered and will be finalized following consultation with stakeholders (including BIAs). Of note, the City will consider retaining parking meters in specific locations or areas where there are single-occurring meters or the utilization of paid parking is very low.

It has been identified that there is a considerable communication requirement involved with the roll-out of wide spread Pay and Display technology in Ottawa. A public education process will be required to ensure that prior to and during machine installation, residents will be properly informed of the change and on how to use the new technology. Staff have talked to a number of other municipalities that have undertaken similar installations to determine their ‘lessons learned’. This information will assist in the development of a comprehensive Communication Plan that will be in effect prior to the start of implementation.

As part of the City’s contract management function, monitoring and auditing procedures will also be established, which will enable the City to ensure that the service standards defined in the Agreement are met and that a high level of customer service is provided to residents.

Pay-by-Cell Technology:

City staff have investigated the potential for adopting additional technology that would allow people using municipal parking in Ottawa to pay for their purchases by way of their cell phone. This would provide an added convenience and is something that the City can pursue independent of the procurement for a Parking Operations System.

In August 2009, a Request for Information was posted to MERX. The intent in doing this was to determine the various types of technologies and options that exist to provide the City with this type of service. In response, the City received several submissions. In addition, Precise has identified their ability to provide a Pay-by-Cell solution.

Staff have begun to clarify the City’s requirements for a Pay-by-Cell system and determine the best way to proceed towards acquiring this technology. While there are a number of factors that could influence the timing for implementation of this technology, it is currently expected that a fully developed and tested system will be launched in Q4 2010. The interim period is required to allow for full development of the City’s requirements followed by the appropriate procurement process and finally the development and testing of the system.

Based on similar systems that have been researched in other municipalities, it is anticipated that this would operate on a user-funded model and at no cost to the City. For each transaction, the user would be charged a convenience fee that would cover system costs. It is not known exactly what this fee will be, but standard convenience fees within the industry are currently between $0.25 and $0.35.

The only expenditures to the City that are anticipated as a result of implementing a Pay-by-Cell system relate to signage, communications, etc. These are estimated to be one-time costs of approximately $20,000.

Of note, implementation of such a system could have an impact on the revenue guarantee that is provided for by the Parking Operations System Contractor. This impact is not expected to be significant, but further discussions with Precise will be required prior to the finalization of the Agreement to properly clarify this.

Staff will engage and update the Parking Stakeholders Consultation Group as the process moves forward and will also provide updates to Council as warranted.

Other Technological Considerations:

There are additional performance aspects and technologies that have been considered through this procurement process. The following discusses specific issues/options that have been considered and accounted for:

Cold Weather Performance:

The system specifications require that the Pay and Display machines being purchased:

“shall provide continuous service, operating in the temperature and humidity conditions found outdoors in Ottawa”.

Further to that, there is a requirement that the machines are to be fully functional for 99.8% of their services hours.

That notwithstanding, potential concerns have arisen with respect to the performance of Pay and Display machines in general during cold weather conditions. Specifically, there is the potential for the display screen to either slow or stop working as well as issues related to the printer. Part of the due diligence process involved fully investigating these concerns.

The Pay and Display machines currently in use in Winnipeg are provided by Precise and represent a similar, albeit slightly different (older) model of machine. Before purchasing its Pay and Display equipment, the Winnipeg Parking Authority subjected Precise’s machines to cold weather testing at the University of Manitoba. The results of these tests and discussions with the Winnipeg Parking Authority have been valuable in determining the extent of any issue and what the implications could be in Ottawa. Through the testing and implementation process in Winnipeg, issues were identified, most of which Precise has been able to resolve through equipment upgrades.

One apparently irresolvable issue relates to the display screen. The Pay and Display machines that are being offered by Precise utilize a Liquid Crystal Display (LCD) screen. This is a feature that appears to be standard amongst Pay and Display machines available from other suppliers. This is also the same type of display that is used in the City’s existing electronic parking meters.

The following are excerpts from the results of the most recent University of Manitoba cold weather test that relate to the performance of the machine and the LCD screen in cold conditions:

· The unit successfully operated processing payment using coin or credit card and it used a printed receipt down to –37° C;

· As the temperatures extended down between –32° C to –36° C, the time taken for the LCD to format took from about 3 seconds to 10 seconds; and,

· At –37° C, components continued to operate well with the exception of the LCD display, which could no longer form a customer instruction in under 10 seconds.

While it has been demonstrated that Precise’s Pay and Display technology has the capacity to continue to operate when extreme cold weather conditions are experienced, there is the potential for reduced display screen performance when temperatures drop below a certain level. During the Field Test, staff will closely monitor both the general performance of the Pay and Display machines, as well as the performance of the display screen during cold weather conditions and expect to work with Precise to address any concerns and identify possible solutions. If any issues arise, the City will not proceed with the contract until they are resolved to the City’s satisfaction.

During cold weather events (both during the field test and during the term of the Agreement), staff from the Parking Operations, Maintenance and Development Branch will ensure closer communication with the Contractor and closer monitoring of the system to identify issues related to the machine functionality. As problems are identified, By-law Enforcement will be advised and enforcement activities will be adjusted so as to ensure that tickets aren’t given where machines are experiencing significant issues. Prior to system implementation, specific procedures and protocols will be developed to define these activities.

Credit Card Verification/Processing:

As defined in the system specifications, the machines and system being implemented must have the capacity to carry out on-line verification of credit cards. Credit cards that are subjected to on-line verification are confirmed to be valid and the payment is processed during the transaction. When in effect, this will ensure that only valid credit cards can be used for parking purchases.

The machines also have the potential to store credit card transactions for later processing – an option the City can authorize when the machines’ wireless communication is temporarily interrupted for any reason.

The system specifications also require that the credit card processing system is compliant with the highest level of Payment Card Industry Data Security Standards (PCI DSS). These represent a set of comprehensive requirements for enhancing payment account data security, which includes requirements for security management, policies, procedures, network architecture, software design and other critical protective measures.

Smart Cards:

Presently, the City operates a Parking Smart Card program to provide parking customers with a convenient way to pay for parking use at on-street meters and at City-owned off-street lots and garages. To maintain this functionality, the City will require the Contractor to implement a new Smart Card program. This will involve establishing a replacement program to enable customers to transfer the outstanding value of their old cards.

In the future, it is possible for the Smart Card payment system being developed for OC Transpo may be expanded to provide a program that could be used for multiple city services. However, that program has not yet identified how other uses (such as Pay and Display machines), will be accommodated. Once the specifications for use of these cards with secondary applications are known, it should be possible to enable them to work with the parking payment machines with development of a suitable link to the transit back office.

Evolving Credit Card Technologies:

Credit card technology has the potential to evolve considerably over the term of this agreement. There is currently a move towards a chip-enabled card with features for a personal identification number (PIN). Known as ‘EMV’ (which stands for Europay, Mastercard and VISA), all new cards have an embedded chip and the capacity to use a PIN for authorization at the point of sale. Using the CHIP & PIN features of EMV cards therefore requires an appropriate card reader and a keypad to accommodate entry of the PIN.

There is also an increasing use of contact less credit cards. These handle low value transactions (like parking) well and simply require a different type of card reader (and not a keypad). However, the United States has not adopted either of these new technologies, so all Canadian cards continue to be issued with magnetic strips as well as chips and/or contact less features, so they can continue to be used whether or not the readers and keypad are added. This is expected to be the case for the foreseeable future.

With regard to the contactless credit cards, the Contractor has committed to retrofit all Pay and Display machines with this technology once the technology is available from Precise to its other users. This is included under the Warranty and Renewal Program and will represent an additional convenience to all users of parking payment machines.

Recognizing that unanticipated changes could transpire during the term of this 10-year agreement, the City has ensured that the Warranty and Renewal Program obligates the Contractor to provide any upgrades as they are required. In particular, the Warranty and Renewal Program will cover changes required to accommodate any credit card put in general circulation in Canada that does not include a magnetic stripe.

RURAL IMPLICATIONS

Currently, there is no paid parking that is Municipally owned or managed in rural Ottawa.

CONSULTATION

Consultations have been held with the Parking Stakeholders Consultation Group which includes representation from BIA`s, places of worship, Community Associations, the tourism industry, the field of Transportation Demand Management and the Building Owners and Managers Association. Additionally, CUPE 503, and various city departments including Information Technology Services, Communications and Customer Services, By-Law and Regulatory Services and Labour Relations have been consulted. The development of the system specifications was also reflective of the Parking Management Strategy and input from the BIAs and other stakeholders received during the public discussions on parking-related issues prior to the April 2008 City Council meeting.

Most recently, the Parking Stakeholders Consultation Group was consulted on October 27, 2009, at which time they were provided with a full briefing of procurement and implementation plans. No significant issues with the procurement were identified at that time. There was general consensus towards moving forward with Pay and Display technology and with respect to the broad terms of the pending contract.

The following summarizes the key points of feedback from this meeting with the Parking Stakeholder Consultation Group:

· The Pay and Display machines should be clearly visible. Ideas to accomplish this included ensuring there was a parking “P” on all four sides and the addition of reflective tape/decals;

· Clarity is required with respect to instructions provided and the parking ticket and receipt that are issued (e.g. it should be stated which part is the ticket and which side should face up in the windshield);

· There should be consistency in the appearance of the machines across the City;

· Consultation should take place with the BIAs with respect to the general aesthetics of the machines, and the approval of the BIA and Ward Councillor should be required before any change is made to the machine aesthetics;

· Advertising should not be considered, unless it is approved by the BIA and Ward Councillor;

· There are foreseeable issues with having to climb snow banks and the City should review snow clearance practises and service levels;

· Maintenance issues need to be closely monitored, especially in the winter due to the possibility for performance issues related to the screen, printer and battery power;

· An appropriate supply of bicycle parking (to reflect current and future demand) should be retained following the removal of parking meter posts; and,

· Where there are identified ‘problem areas’ with respect to vandalism, enhanced monitoring should occur;

· Staff are committed to reviewing implementation timing, locations, etc. with Ward Councillors and the BIA`s.

The City will ensure that all feedback from the Parking Stakeholder Consultation Group is addressed through the testing, implementation and communication processes. Moving forward, the Parking Stakeholder Consultation Group will continue to be engaged on various components of the implementation and communication planning components of this process

LEGAL / RISK MANAGEMENT IMPLICATIONS

There are no legal/risk management impediments to implementing the recommendation in this Report.

FINANCIAL IMPLICATIONS

The 2010 Operating Budget, along with future operating and capital budgets, will be adjusted to accommodate the implementation of the Parking Operations System and the Pay-by-Cell system and contract requirements.

SUPPORTING DOCUMENTATION

Document 1 - Ottawa Option Policy (Immediately follows the report)

Document 2 - Summary of Parking Operations System Specifications (Immediately follows the report)

Document 3 - Report of the Fairness Commissioner (Immediately follows the report)

DISPOSITION

Staff from Public Works, Supply Management and Financial Services will carry out Council’s direction and the recommended processes in line with the Ottawa Option procurement process.

Document 1

Ottawa Option Policy

As approved by Council October 23, 2002

THE OTTAWA OPTION

Unsolicited Proposals

The Ottawa Option provides the City of Ottawa with a method for receiving unsolicited bids for projects and then offer others an opportunity to improve and bid on the proposal, while at the same time protecting the ability of the original proponent to match any other competing proposal.

Adopting this approach overcomes many problems associated with traditional unsolicited bids. Typically, it is recommended that local governments should not consider unsolicited bids for a variety of reasons. For instance, the benefits of P3s are that they take advantage of competition among partners. Unsolicited proposals cannot be compared to proposals from other potential partners. Another possible concern with unsolicited bids is the potential for the perception of bias and unfair procurement procedures.

The Ottawa Option overcomes these concerns by providing an approach whereby the City of Ottawa can receive unsolicited proposals for a project in a fair and practical manner. The process is as follows:

Ø A Private Sector Participant submits an Unsolicited Proposal for a project, which is innovative and, which was not initiated or is not planned to be initiated by the City of Ottawa. The submission must include:

i. Details of the technical, commercial, managerial and financial capability of the participant;

ii. Technical, financial and commercial details of the proposal;

iii. Draft contract principles for undertaking the project.

Ø The Private Sector Participant is advised of the “The Ottawa Option” process that the City follows and is requested to confirm that he/she is prepared to continue to participate in accordance with this process;

Ø The City of Ottawa would evaluate the Private Sector Participant’s technical, commercial, managerial and financial capability to determine whether the participant’s capabilities are adequate for undertaking the project;

Ø The City of Ottawa would then weigh the technical, commercial, managerial and financial aspects of the Private Sector Participant’s proposal and the Contract Proposal and determine if the scale and scope of the project is in line with the requirements, the funding ability, or the interests of the City. Also being determined is whether the sharing of risks as proposed in the Contract Proposal is acceptable to the City and if the project is in conformity with long-term objectives;

Ø Based on this assessment, the City may decide to reject the proposal, to request amendments to the proposal, or to continue with the process;

Ø If the City recommends any modification in the technical, scale, scope and risk sharing of the proposal, the Original Private Sector Participant will be allowed to consider the recommendations and re-submit its proposal within a given time period;

Ø The City of Ottawa will then invite competing counter proposals giving adequate notice. The proposal and contract principles of the Original Private Sector Participant will be made available to any interested applicants. (Proprietary information contained in the original proposal would remain confidential and would not be disclosed);

Ø The Original Private Sector Participant will be given an opportunity to match any competing counter proposals that may be superior to the Original Proposal. In the case the Original Private Sector Participant matches or improves on the competing counter proposal, the Project will be awarded to the Original Private Sector Participant; and

Ø In the event the Original Private Sector Participant does not match or improve on the competing counter proposal, the City can award the project to others, and the Contract Proposal prepared by the Original Private Sector Participant becomes the property of the City of Ottawa.

The City of Ottawa will assemble a review committee who will evaluate the proposals:

“The Ottawa Option provides a framework for effective and fair competition when addressing unsolicited proposals. It also complements the City of Ottawa’s organizational culture, which advocates dynamic innovation and proactively encourages suggestions from the private sector.”

Document 2

Summary of Parking Operations System specifications

This document provides a summary of the System Specifications for the Parking Operations System. It is intended to provide a quick reference for many of the various requirements and provisions. (The reader should not rely on this summary for key information, but rather refer to the System Specifications included within the Request for Submission documentation.)

Summary of System Specifications

Pay & Display Machines - Schedule 1

Identifies the minimum requirements for Pay and Display machines:

· Bilingual instructions and messaging;

· Clear and accessible customer interface which complies with the Ontarians with Disabilities Act, 2001 and the Canadian Standards Association;

· Accept payment by coin, City parking tokens, credit card, and Parking Smart Card;

· Real time credit card payment authorization;

· Provide paper tickets indicting payment made and time of expiry;

· Accept modification to add capability to accept EMV Chip cards, contact less cards, transit smart cards and number pads;

· Communicate with a Central Management System;

· Re-programmable either centrally through communication with the Central Management System, or on-site;

· Ability to apply different rate structures at different times, and at different machines;

· Accommodate permanent or temporary changes to rate structures and hours of paid parking;

· Internal monitoring system that will look for and signal to the Central Management System when a malfunction has occurred;

· Equipped with a security and alarm system; and,

· Vandal resistant and able to operate continuously in Ottawa’s climate.

Parking Facility Payment Systems (PFPS) - Schedule 2

Identifies the minimum requirements for Parking Facility Payment Systems:

· The three major garages (City Hall, 70 Clarence Street and 141 Clarence Street) will have Parking Facility Payment Systems that include Pay-on-Foot machines, entry and exit terminals, gates, card readers, intercoms, security cameras, signage, a host computer to co-ordinate the components;

· Attendant cash registers will be required at City Hall;

· Most Pay and Display machine requirements apply, but must also accept payment by bills and provide change;

· Real time credit card payment authorization; and,

· Pay-on-Foot machines will have the additional feature of an intercom button that is linked with an overhead security camera for 24/7 monitoring.

Central Management System (CMS) - Schedule 3

Identifies the minimum requirements for the Central Management System:

· Communicate with Pay and Display machines and Parking Facility Payment Systems;

· Process credit card and smart card payments and make all deposits to the credit of the City;

· Receive, store and report data on transactions and machine status;

· Maintain compliance with the PCI DSS standard for security and protection of data related to credit card transactions;

· Monitor performance across the system and dispatch staff when required;

· Manage and operate Parking Smart Card and Monthly Parking Pass programs;

· Take customer complaints or inquiries, provide appropriate response, issue and manage all refunds to parking customers;

· Implement system or policy changes to parking rates, hours, locations and signage, as directed by the City;

· Generate reports on system activity relating to revenue, maintenance, malfunctions, and anything else as the City may require;

· Retention of all data for a period of at least seven years following termination of the contract; and,

· The City may, at any time, audit the operations of the Contractor.

Licence - Schedule 4

Describes the licence the City will receive to allow it to use the software required to operate the Pay and Display parking system, including the Central Management System. The Software License provides the opportunity to continue using the software at the end of the contract if the City wishes to continue operating the system.

System Acceptance and Testing - Schedule 5

Identifies the testing requirements and the process to be used in certifying the system before ‘final acceptance’. A series of tests are required, including 30 days uninterrupted operation meeting system specifications.

Warranty and Renewal Program - Schedule 6

Identifies the Warranty and Renewal Plan minimum requirements:

· To be maintained for the 10 year term of the contract;

· Contractor must ensure all machines continue to meet or exceed the levels of performance achieved at Final Acceptance, regardless of changes in the environment, including changes in government or industry regulations, specifications, or practices, or the introduction of new units of money;

· To provide all consumables, parts, components and software as needed;

· Contractor to develop a Preventative Maintenance Plan, and provide required parts; and,

· Changes to extend functionality, such as the introduction of pay-by-space, pay-by-phone, or other services are not included, but there is a process to carry out such changes if desired.

On-Site Support Services - Schedule 7

Identifies the minimum requirements for the On-Site Support Services and staffing:

a) Cash Collection

· Must collect coins and paper currency from P&D and POF Machines as regularly as is required to maintain cash payment and dispensing functions in those machines;

· Revenue must be counted, reconciled and deposited to the credit of the City’s bank account within one business day of the collection taking place;

· Contractor will be liable for all cash deposited in the machine and credit card transactions that are not processed, and stands to lose any cash (or machines) that are stolen;

· City retains the right to audit machines at any point in time; and,

· Detailed reporting requirements.

b) On-Site Maintenance

· Regular program of preventative maintenance with replacement of parts and subsystem elements in the parking payment machines to ensure reliability;

· Replace consumables, primarily the paper used to print tickets;

· Program maintenance, such as spring cleaning of solar panels;

· Response to and correction of any machine malfunction, whether reported by a customer or detected by the CMS monitoring functions, with clear performance standards for response;

· Removal of all graffiti from machines within a forty-eight hour period of the graffiti being identified;

· Repair damage to machines from accidents or other causes (with right to seek compensation from the party responsible);

· Liquidated damages shall apply to the contractor for failure to achieve compliance within the maximum response times;

· Required to hood parking payment machines when out of service or during construction, and to update machine signage as rates, hours and locations for paid parking change; and,

· Must conduct weekly audits of parking payment machines.

c) Off-street Lot Management

· Management of off-street lots will be handled on a ‘cost-plus’ basis;

· City will identify the scope of services required to support off-street operations and can change as required with appropriate notice; and,

· Staffing of City Hall parking lot included. Other lots could be staffed if required by City.

d) Residual Parking Meters

· Some parking meters may remain, at least for some time; and,

· Contractor will provide coin collection and maintenance services until meters are removed.

e) Staffing

· Contractor is required to accept transfer of existing staff or pay the estimated costs associated with an org and tech process training, transfer or severance of existing staff;

· Either action must be in accordance with requirements of Collective Agreement, and relevant labour laws; and,

· Costs related to org and tech process have been estimated at $500,000 and Contractor required to pay this amount if staff are not transferred. Actual costs may differ, but amount set conservatively to ensure actual costs are covered.

N/A – Schedule 8

The material originally in Schedule 8 was consolidated into other schedules.

Performance - Schedule 9

Sets out the framework for managing the performance of the Parking Operations System, and describes a reasonable order of liquidated damages which the City may seek from the Contractor in the event of non-performance.

· Performance will be assessed on a series of outcomes, leaving the contractor to determine the most effective and efficient means to deliver the service;

· Among the many performance standards:

o parking payment machines must function properly during at least 99.8% of service hours;

o 90-95% of maintenance responses, depending on the nature of the incident, must occur within the stated response times; and,

o the City must receive fewer than 5 complaints per month relating to the customer relations of the contractor; and,

· The liquidated damage amounts are specific to each aspect of non-compliance or non-performance, and escalate based on the recurrence and severity of incident(s).

Escrow - Schedule 10

Requires that the software involved in delivering the system be held in escrow, by a third party commercial escrow agent, so the City can access it in the event of a Contractor insolvency or other default.

Financial Terms - Schedule 11

Outlines the financial terms of the proposed contract:

· Contractor must bid with fixed prices for all equipment, including equipment delivered in future years;

· No payments and no interest on equipment purchases for first 5 years;

· In years 6-10 interest accrues at 4.5% and payments based on a percent of the incremental revenues that the City enjoys due to implementing on-street Pay and Display;

· City may return equipment with no further payment at end of 10 years, or pay balance and keep equipment;

· Contractor guarantees revenues will increase by at least 22% (to be revised to 25%) where parking meters are replaced by Pay and Display machines. City must maintain parking enforcement levels;

· Central Management System, Warranty and Renewal Program and other support services to be paid for by monthly fee per machine. Fees may only increase at three-quarters of the inflation rate over the 10 years;

· Provision for fee reduction if Contractor’s third party costs decrease significantly; and,

· Off-street lot management compensated based on actual out of pocket expenses, plus a management fee.

Bill of Sale - Schedule 12

Draft of Bill of Sale Contractor will execute on final acceptance of the Pay and Display machines by the City.

Implementation Schedule - Schedule 13

Identifies key timeframes Contractor must meet.

· First 100 P&D machines to be in place and pass Final Acceptance testing within 6 months of contract execution;

· The rest of the initial batch of P&D machines are to receive Final Acceptance within one year of the contract execution; and,

· The Parking Garage Payment Systems are to be installed within 18 months of contract execution.

Blueprint of Specifications - Schedule 14

Contractor is required to submit details of the equipment they will provide as part of their bid. These details will be included in the contract as Schedule 14.

Performance Security - Schedule 15

This schedule shows the form to be used by the bank providing performance security for the Contractor.

Insurance - Schedule 16

This schedule identifies the insurance the Contractor is required to provide.

· $5,000,000 Commercial General Liability; and,

· $5,000,000 for Motor Vehicles.

Document 3

REPORT of the Fairness Commissioner

City of Ottawa

Pay & Display Parking Operations System

Ottawa Option Procurement Process

Fairness Commissioner’s

Interim Report

October 29^th, 2009

Mr. Dan Farrell

City of Ottawa

100 Constellation Drive

Ottawa, Ontario

Subject: Fairness Commissioner – Pay and Display Parking Operations System Ottawa Option Procurement Process (Interim Report)

Dear Mr. Farrell:

Following our engagement by the City, in accordance with RFS # 00406-91887-SO1, in May 2008 as the Fairness Commissioner for the Pay and Display Parking Operation Ottawa Option Process; we are pleased to provide our interim report on the process to date.

Objectives

P3 Advisors acts as the Fairness Commissioner to review and monitor communications, procurement documentation and decision-making processes associated with the Pay & Display Parking Operations Ottawa Option procurement process in terms of ensuring fairness, equity, objectivity, transparency, consistency and adequate documentation of the process. To date, in particular, in our role as Fairness Commissioner, we ensured that the following steps were taken to ensure a fair and open process:

· Prevention of any conflict of interest amongst Project Team members

· Adherence to the City of Ottawa’s Ottawa Option policy and process

· Address fairness issues as they arose

· Ensure adherence to the City’s requisite procurement policies and procedures and laws of tendering in the execution of the Ottawa Option procurement process

· Ensure the City’s recommended ‘changes to the technical, scale, scope, and risk sharing’ of the proposal where/are consistent with the original intention of the unsolicited proposal

· Procurement process and documents do not show bias

· Clear evaluation criteria/requirements are established prior to opening of proposal(s)

· Proposal(s) and any information received with respect to the proposal(s), are and will be treated as confidential

· Monitor evaluation process including ensuring evaluators are informed related to evaluation process and tools will be used correctly

· There are no conflict of interest issues amongst evaluators

· Monitor all communication to ensure a fair, open and transparent process

· Compliance of project participants with strict requirements of conflict of interest and confidentiality during the procurement and evaluation processes

Project Background Information

We were provided with and reviewed copies of the:

· Original unsolicited proposal by Precise Parklink Inc. based on the Ottawa Option Process

· Process to be followed based on Council approved directives

· Pay and Display Parking Operations Specifications (in the form of Schedules)

· Draft and final Parking Operation System Agreement (POSA)

· Draft and final Request for Submissions (RFS) including evaluation methodology and requirements

· Draft and Final Net Present Value pro forma spreadsheet

· Reports to Committee and Council

· Evaluation process framework outlining evaluation process, members, roles and responsibilities, and individuals obligations including code of conducts, confidentiality and conflict of interest declarations

· All clarification questions and responses which were considered as part of the evaluation

· Final evaluation process results including evaluation and sub committee recommendations

Participation in Ottawa Option Procurement Process

We attended the following:

· Review session(s) of the draft and final Schedules

· Review session(s) of the draft and final POSA

· Review session(s) of the draft and final RFS

· Commercial Confidential Meetings with Original Private Sector Proponent (Precise) (Note: no Commercial Confidential Meetings were requested by any competing Proponent(s))

· Business Improvement Area information session (February 20^th, 2009)

· Receipt of all proposal submissions and completeness review including Precise re-submitted proposal

· All evaluation sub-committee committee meetings which included legal, technical and financial

· All evaluation committee meetings where sub-committee recommendations were presented

· Representations to Councilors in accordance with established protocol

· Participation at the Parking Stakeholder Consultation Group (October 27^th)

We also provided fairness advice to the City with relation to any potential representations made to City officials or Councilors by actual and prospective Proponents.

Evaluation Process

The Evaluation Committee submitted a recommendation to Council to proceed with the next phase of the Ottawa Option procurement process, being the solicitation competing proposals, based on the RFS and POSA including Schedules documentation.

We attended all evaluation sessions for both the Original Proponent’s re-submitted proposal and competing proposal(s). The evaluation process included, more specifically, the following phases:

Stage 1: Compliance with the Minimum Response Requirements per Annex “A”

· Receipt of submitted proposals and a completeness reviews

· All evaluation sub-committee committee meetings which included legal, technical and financial

· All evaluation committee meetings where sub-committee recommendations were presented

· Reviewed and monitored all correspondence to Proponent(s) including clarifications

The Evaluation Committee deemed Vinci Park Services (Canada) Inc. to be non-compliant to the minimum response requirements; therefore stages 2,3, and 4 of the evaluation where not undertaken. As such, consistent with Stage 5, Precise was identified as the ‘Final Preferred Proponent’.

Stage 2: Evaluation of Financial Proposals

· Attended evaluation of Precise’s financial proposal

Stage 3: Selection of an Initial Preferred Proponent

· Non applicable

Stage 4: Soliciting and receiving a final offer from the original Ottawa Option Proponent (if required)

· Non applicable

Stage 5: Selection of the Final Preferred Proponent

· Reviewed letter to Precise to proceed to Stage 6: Due Diligence

Stage 6: Due Diligence

· Review of all documentation

· Review session(s) of the draft reference check questions

· Participation on all reference check calls

· Review of all field test documentation

· Review of all financial updates

· Review of all product demonstration documents

· Participation at Product Demonstrations

We also attended preliminary negotiation sessions to finalize re-submitted priced proposal undertaken to date.

Debriefing

We attended the debriefing session for the unsuccessful Proponent.

Next Steps

Where the recommendation to proceed by Council is approved (Stage 8), the next steps would include the execution of agreement; review of the final agreement successful Proponent to ensure that it is still consistent with the RFS expected outcomes and intended process (i.e. no material deviation from the RFS mandatory and rated requirements).

Summary

As the Fairness Commissioner for the Pay and Display Parking Operation System Ottawa Option Process, we certify, in our opinion, that the process to date has been undertaken in a fair, open, consistent and transparent manner.

If you require additional information, please do not hesitate to contact the undersigned.

Louise Panneton Patricia Tessier

Lead Fairness Commissioner Fairness Commissioner

Committee Recommendations As Amended

Recommandations Modifiées du comité

Report to/Rapport au :

SUBJECT:

OBJET :

AFFICHEZ ET PAYEZ – PROCESSUS D’ACQUISITION d’option ottawa

REPORT RECOMMENDATIONS

RECOMMANDATIONS DU RAPPORT

EXECUTIVE SUMMARY

Subsequently, the Parking Operations System RFS was posted on MERX for the purpose of soliciting competing proposals. The final submission closing date was July 30, 2009 upon which the City received one (1) submission from Vinci Park Services Canada Inc. (Vinci Park).

RÉSUMÉ

Le budget de fonctionnement de 2010 ainsi que les prochains budgets de fonctionnement et d’immobilisation seront révisés en vue de la mise en place du système d’exploitation de stationnement et du système de paiement par cellulaire et du respect des obligations contractuelles.

DISCUSSION

Whereas there were no compliant competing bids, the evaluation process proceeded directly to Stage 5 with Precise being identified as the ‘Final Preferred Proponent’.

Status Quo

Years 1-5

Years 1-5

Years 6-10

Total

Table 4 – Allocation of Net Parking Operating Revenue

Precise Contract

Years 1-5

RURAL IMPLICATIONS

FINANCIAL IMPLICATIONS

SUPPORTING DOCUMENTATION

DISPOSITION

Objectives

Project Background Information

Participation in Ottawa Option Procurement Process

Summary