2.             pay and display – Ottawa Option Procurement Process

 

distributrices de billets de stationnement - processus d’achat d’option ottawa  

 

 

 

committee recommendation

 

 

That Council approve the attached Request for Submission which will serve as the basis for the next phase of the Ottawa Option procurement process.

 

 

Recommandation du comité

 

 

Que le Conseil d’approuver que la Demande de soumission ci-jointe serve de point de départ ŕ l’étape suivante du processus d’achat d’Option Ottawa.

 

 

 

 

 

 

 

 

Documentation

 

1.         Deputy City Manager, City Operations, Report dated 1 April 2009 (ACS2009-COS-PWS-0008).

 

2.         Extract of Draft Minute, 15 April 2009, to be distributed prior to Council

 

Report to/Rapport au :

 

Transportation Committee

Comité des transports

 

and Council / et au Conseil

 

1 April 2009 / le 1 avril 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 générale, Public Works/Travaux publics

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

 

City Wide/Ŕ L’échelle de la Ville

Ref N°: ACS2009-COS-PWS-0008

 

 

SUBJECT:

pay and display – Ottawa Option Procurement Process

 

 

OBJET :

distributrices de billets de stationnement - processus d’achat d’option ottawa  

 

 

REPORT RECOMMENDATION:

 

 That Transportation Committee recommend Council approve the attached Request for Submission which will serve as the basis for the next phase of the Ottawa Option procurement process.

 

RECOMMANDATION DU RAPPORT:

 

Que le Comité sur les transports recommande au Conseil d’approuver que la Demande de soumission ci-jointe serve de point de départ ŕ l’étape suivante du processus d’achat d’Option Ottawa.

 

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.  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.

 

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”.

 

Following receipt of this direction from Council, staff proceeded in a manner consistent with the 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.  These documents are contained in the Request for Submission, document 3 and which is held on file with City Clerk’s office.

 

The City will retain responsibility for policy development (determining where and when paid parking will apply, the rates to be charged and the maximum parking periods permitted), by-law enforcement (ensuring the parking regulations are enforced), and management of the contract (ensuring the Contractor provides the services in accordance with the appropriate terms and conditions).

 

Precise has re-submitted a proposal that is in accordance with the City’s requirements as set out in the Request for Submission.  This report outlines the proposed Parking Operations System, provides a summary of the re-submitted proposal received from Precise, reports on the assessment of that proposal, and outlines the steps required to proceed with the competitive portion of the Ottawa Option procurement process.

 

A key piece of the proposed Parking Operations System will be the implementation of a network of Pay and Display machines, which will likely replace a significant number (if not all) of the existing on-street parking meters, as well as off-street parking meters and existing Pay and Display machines.

 

The introduction of widespread Pay and Display technology offers convenient payment options (including credit cards and Smart Cards), provides customers with a receipt, increases the number of on-street parking spaces available and provides improved flexibility and ease in implementing different payment requirements in different areas and at different times.  Pay and Display will digitize the parking payment and operation process, and, with the introduction of a Central Management System, will centralize many support functions leading to greater efficiency and simplicity, and easier identification and rectification of any associated problems with the parking system.

 

Pay and Display technology, along with the Central Management System, will provide for more detailed financial reporting of parking revenues.  The technology will also provide for detailed reports relating to parking usage, which will assist with planning and policy development consistent with the City’s 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.

 

System adaptability to incorporate additional technological and/or functional features is a key component of this process. The system specifications require adaptability with respect to various new technological options.  In addition, proponents are invited to propose extra services or features, as “options” that they believe will improve the City’s parking system.  The proposals for optional features or services will not be evaluated in the selection of the final preferred proponent but rather will be evaluated on a cost-benefit basis after the final preferred proponent is selected.  They will be presented to Council for final consideration (as appropriate). 

 

Provided that Council approves proceeding with the Ottawa Option procurement process, the next step would be the solicitation of competing proposals.  All proposals that meet the minimum response requirements specified in the Request for Submission document will be evaluated on the basis of a Net Present Value (NPV).  The NPV of a given proposal will be determined by calculating the cost of all elements of the proposal (including equipment and services) as well as the net incremental revenue the City can expect based on the timing of the implementation plan proposed.  As each proposal will incorporate many different prices for different elements of the project, this enables an equitable comparison of the proposals.

 

The proponent, who, having met the minimum response requirements, submits the lowest bid, will be identified as the initial preferred proponent. If the initial preferred proponent is not Precise, Precise will be given the opportunity to match the initial preferred proponent’s NPV or propose a lower NPV, following which staff will identify the final preferred proponent and prepare a report to Council recommending that Council accept the final preferred proponent.  Council will then be given the opportunity to accept the final preferred proponent as the successful proponent and to authorize staff to proceed with the finalization of the Agreement and the implementation of the Parking Operations System. 

 

In the event that Council does not accept staff’s recommendation, a partial list of options for Council could include:  (1) the re-assessment of the final preferred proponent’s proposal by staff and the preparation and presentation of revised recommendations to Council, (2) the rejection of the final preferred proponent’s proposal and the selection of the next lowest NPV proposal that has met the minimum response requirements, or (3) the cancellation of the Ottawa Option procurement process.

 

Pursuant to Council direction, a Fairness Commissioner has been (and will continue to be) involved in all aspects of this Ottawa Option procurement process.  To date, the Fairness Commissioner has helped to ensure a transparent, open and fair procurement process.  In addition, the Fairness Commissioner has prepared an interim report (dated 6 March 2009) which is available as Document 4 and certifies the Ottawa Option process has thus far been undertaken in a fair, open and transparent manner. 

 

RÉSUMÉ

 

En décembre 2007, la direction générale de la Ville a reçu une proposition non sollicitée de Precise Parklink Inc. (« Precise ») concernant la mise en śuvre, le fonctionnement et l’entretien de distributrices de billets de stationnement ŕ Ottawa. La proposition a été jugée « innovante » et, par conséquent, satisfaisait aux exigences de la politique municipale d’Option Ottawa. La raison principale en était que l’installation des distributrices de billets de stationnement garantit ŕ la Ville une augmentation minimale des revenus générés par le stationnement sur rue.

 

En avril 2008, le Conseil municipal a enjoint au personnel « d’entreprendre des négociations avec Precise concernant sa proposition d’implanter les distributrices de billets de stationnement dans la Ville d’Ottawa, en confiant le dossier ŕ Option Ottawa ».

 

Aprčs avoir reçu cette directive du Conseil, le personnel s’est mis au travail dans le respect de la politique d’Option Ottawa, en précisant les exigences de la Ville relatives ŕ un systčme de stationnement automatisé et en produisant une série exhaustive de documents ŕ ce sujet. Ces documents se trouvent dans la Demande de soumission ci-jointe (Document 3), qui a été versée aux dossiers du Bureau du greffier municipal.

 

La Ville se réserve la responsabilité de définir la politique (déterminer les emplacements et les périodes oů le stationnement payant sera en vigueur, la tarification et les durées de stationnement maximales), l’application du rčglement (veiller au respect des rčglements sur le stationnement) et la gestion du contrat (veiller ŕ ce que l’entrepreneur fournisse les services conformément aux conditions du contrat).

 

Precise a déposé une nouvelle proposition conforme aux exigences de la Ville telles qu’elles sont exposées dans la Demande de soumission. Ce rapport décrit le systčme de stationnement automatisé, résume la nouvelle proposition de Precise, commente l’évaluation de la proposition et décrit les étapes exigées pour satisfaire ŕ la portion qui a trait ŕ la concurrence du processus d’achat d’Option Ottawa.

 

L’élément crucial du systčme de stationnement automatisé sera la mise en place d’un réseau de distributrices de billets de stationnement qui remplaceront probablement plusieurs – ou męme la totalité – des parcomčtres sur et hors rue et des distributrices de billets de stationnement actuellement en service.

 

Les distributrices de billets de stationnement offrent divers modes de paiement pratiques (notamment par cartes de crédit et cartes ŕ puce), émettent un reçu aux usagers, permettent d’augmenter le nombre d’emplacements de stationnement sur rue et offrent une flexibilité accrue qui facilite l’application de tarifs qui varient en fonction des endroits et des heures. Les distributrices numériseront le paiement du stationnement et le traitement de la demande et, par la mise en service d’un systčme central de gestion, plusieurs fonctions de soutien seront centralisées. Il en résultera une efficacité et une simplicité supérieures, et une facilité ŕ détecter et ŕ corriger tout problčme relié au systčme de stationnement.

 

Les distributrices de billets de stationnement, jumelées au systčme central de gestion, permettront de produire des rapports détaillés des revenus de stationnement. Cette technologie fournira aussi des données détaillées concernant l’utilisation du stationnement, ce qui aidera ŕ planifier et ŕ élaborer des politiques en accord avec la Stratégie municipale de gestion du stationnement. Ensemble, ces améliorations permettront ŕ la Ville de régler plusieurs problčmes que le vérificateur général a relevés dans sa Vérification de la fonction stationnement de 2008.

 

La flexibilité du systčme ŕ assimiler de nouveaux éléments technologiques ou fonctionnels constitue une composante importante du processus d’achat. Le systčme doit ętre flexible afin de permettre l’ajout de nouvelles options technologiques. De plus, on demande aux promoteurs de proposer des caractéristiques ou des services additionnels, comme des « options » qui pourraient, selon eux, améliorer le systčme de stationnement de la Ville. Ces propositions de caractéristiques ou de services additionnels ne seront pas considérées lors de la sélection du promoteur, mais seront évaluées en fonction de leur rentabilité une fois que le promoteur aura été sélectionné. Elles seront présentées au Conseil pour évaluation finale (s’il y a lieu).

 

Si le Conseil approuve les étapes du processus d’achat d’Option Ottawa, la prochaine étape serait la sollicitation de propositions concurrentes. Toutes les propositions qui satisfont aux exigences minimales indiquées dans la Demande de soumission seront évaluées sur la base de la valeur actualisée nette (VAN). La VAN d’une proposition sera définie en calculant le coűt de tous les éléments de la proposition (y compris les équipements et les services) ainsi que les recettes nettes supplémentaires que la Ville peut espérer réaliser en se fondant sur l’échéancier du plan de mise en service proposé. Comme chaque proposition affichera plusieurs prix différents pour différents éléments du projet, cela permettra de faire une évaluation équitable des propositions.

 

Le promoteur qui satisfait aux exigences minimales et qui s’avčre le moins-disant sera retenu en premier lieu. Si le promoteur retenu en premier lieu n’est pas Precise, on donnera la possibilité ŕ Precise d’égaler la proposition ou de soumissionner ŕ un prix plus bas. Ensuite, le personnel désignera le promoteur retenu en dernier lieu et soumettra un rapport au Conseil lui recommandant d’accepter ce promoteur. Le Conseil pourra alors accepter ce promoteur et autoriser le personnel ŕ finaliser l’entente et la mise en śuvre du systčme de stationnement automatisé.

 

Si le Conseil n’accepte pas la recommandation du personnel, plusieurs possibilités s’offriraient ŕ lui, notamment : (1) la réévaluation de la proposition du promoteur retenu en dernier lieu par le personnel, et la préparation et la présentation au Conseil de recommandations révisées; (2) le rejet de la proposition du promoteur retenu en dernier lieu et le choix de la proposition suivante qui satisfait aux exigences minimales; ou (3) l’annulation du processus d’achat d’Option Ottawa.

 

Conformément aux directives du Conseil, un commissaire ŕ l’équité a été consulté dans tous les aspects de ce processus d’achat d’Option Ottawa (et continuera de l’ętre). Ŕ ce jour, le commissaire ŕ l’équité a veillé ŕ ce que le processus d’achat soit transparent, ouvert et équitable. De plus, le commissaire ŕ l’équité a préparé un rapport d’étape (daté du 6 mars 2009) que l’on peut consulter (Document 4) et qui atteste que le processus d’achat d’Option Ottawa s’est déroulé jusqu’ŕ maintenant de façon transparente, ouverte et équitable.

 

BACKGROUND

 

In December 2007, the City Manager received an unsolicited proposal from 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”.

The report presented to City Council on 23 April 2008 provided the following outline of Precise’s unsolicited proposal.  Precise would:

 

 

The same report noted that proceeding with the Precise proposal, under the Ottawa Option Policy, would involve:

 

 

Since receiving Council approval to proceed with the Ottawa Option Policy on 23 April 2008, a Fairness Commissioner has been engaged, and staff has clearly identified the City’s parking requirements for a Parking Operations System.  A working group was formed, which included representation from Legal Services, Finance, Supply Management, Parking Operations as well as external resources. 

 

Additional staff from By-Law Services, Labour Relations, Treasury and Client Services were engaged as required through the process.  This process has resulted in the production of a comprehensive series of documents, developed by the City, which represent the fundamental pieces of the Ottawa Option procurement that is ready to go forward.  These documents are contained in the Request for Submission, Document 3 as held on file with the City Clerk’s office and includes the following:

 

 

This report outlines the proposed Parking Operations System, provides a summary of the re-submitted proposal received from Precise, reports on staff’s assessment of that proposal and outlines the steps required to proceed with the competitive process under the Ottawa Option Policy.

 

DISCUSSION

 

In response to Precise’s unsolicited proposal, the City is considering procuring an integrated Parking Operations System under the Ottawa Option Policy.

 

A representation of such a 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 credit cards and Smart Cards), provides customers with a receipt, increases the number of on-street parking spaces available and provides improved flexibility and ease in implementing different payment requirements in different areas and at different times.  Pay and Display will digitize the parking payment and operation process, and, with the introduction of a Central Management System, will centralize many support functions leading to greater efficiency and simplicity, and easier identification and rectification of any problems with the Parking Operations System.

 

Pay and Display technology, along with the Central Management System, will provide for more detailed financial reporting of parking revenues.  The technology will also provide for detailed reports relating to parking usage, which will assist with planning and policy development consistent with the City’s 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);

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

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

 

Contractor Responsibilities:

·         Supply Pay and Display and Pay on Foot machines as well as other infrastructure as required;

·         Operate and maintain the Pay and Display machines and off-street parking facilities (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 10 years;

·         Provide a revenue guarantee, ensuring a 22% increase in on-street revenue when 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 will be required to be met by the Contractor and to provide clarity on the various roles and responsibilities of the parties during the term of the Agreement.  In addition to the Schedules, the Agreement includes the contractual terms and conditions that the Contractor will be required to be bound to.  For the purposes of the Ottawa Option procurement process, the Agreement has been included as a component of the Request for Submission document.  The Request for Submission also outlines the evaluation methodology that will be used to select the final preferred proponent and contains all relevant documentation.

 

All documents have been carefully assembled to ensure that the resulting product, services and binding Agreement will represent the City’s best interests for the duration of the Agreement.  The Request for Submission document 3 (including the Agreement and system specifications) is held on file with the City Clerk’s office.  For a summary of the system specifications, please refer to Document 2.

 

The Request for Submission and attached documents were provided to Precise, they have in turn re-submitted their proposal including a firm price commitment for all the equipment and services required for a Parking Operations System. 

 

In accordance with the Ottawa Option Policy, should Council approve the recommendations of this report, the Request for Submission will be publicly issued to provide an opportunity for other proponents to submit bids for the same equipment and services.  If the City receives a proposal, which meets the minimum response requirements and has a lower Net Present Value (NPV), Precise will have the opportunity to match or propose a lower NPV.

 

Additional details of the process, including discussion of the requirements, the process for union consultation, the evaluation framework that will be used to assess bids submitted under the Request for Submission, and the anticipated process for finalization and implementation, are provided in this report.

 

System Specifications and Terms of the Agreement

 

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 operations, replacing current parking meters and Pay on Foot 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 the machines is maintained regardless of changes in the environment, such as evolving industry requirements or standards.  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.  This is consistent with the Asset Protection and Renewal Program from Precise’s original proposal.

 

·         Provide on-site maintenance of the parking payment machines including removal of graffiti, coin collection from the machines, and provide staff and services as required to support the City’s off-street parking operation.

 

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

 

·         Ensure that all machines accept coins, City parking tokens, credit cards, and Parking Smart Cards (which the Contractor is responsible to issue and manage).  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 planned service hours, and there are required response times for various types of malfunctions.  (The Contractor must pay the City liquidated damages if it fails to meet the performance standards).

 

Some municipal staff in the existing Parking Operations unit carry out functions similar to those identified above.  The changes proposed in this report directly affect 18 positions in the Parking Operations unit (all of which are CUPE 503 positions).  Proponents participating in this Ottawa Option procurement process are provided with the option to transfer the affected staff to their employment or reimburse the City for the estimated costs of transferring, retraining and/or severing the employees under the organizational and technological change provisions of the collective agreement.  In either case, the 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 also provides two months for the union to provide a detailed written proposal with respect to all services being proposed.  Staff has been in consultation with CUPE with respect to this project and will proceed with consultations in a manner that will meet the requirements of the collective agreement.

 

Financial Arrangements

 

The following represents the financial elements that are identified as requirements in the Request for Submission documentation, upon which all proponents have and will be basing their proposals:

 

·         The proponent must guarantee that on-street revenues will increase by at least 22% where Pay and Display machines replace parking meters.  This 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 as they occur.  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 about 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 in 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 on these costs for the first five years of the ten-year Agreement. 

 

·         Starting in the sixth year, interest will begin to accrue at 4.5% per year, and the City will begin to make payments from a portion of the increased revenue the City is receiving as a result of the use of Pay and Display Machines on the street.  The portion to be paid will be identified in the bid submission and may vary by bidder.

 

·         During the term of the Agreement, the City may make additional payments at any time.

 

·         At the conclusion of the agreement, the City may keep the equipment and pay the outstanding balance owed, return the equipment to the Contractor without making any further payments or keep some of the equipment, pay 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.  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.

 

·         For off-street parking operations, the Contractor will charge the City its actual out-of-pocket expenses for operation of the parking lots and garages, plus a mark-up to cover management and administration costs.  The City may add or remove work to be done by the Contractor, and all expenses must be approved by the City in advance.

 

Technological Considerations / Options

 

At the City Council meeting of 23 April 2008, there was a motion regarding system adaptability to new technologies or technological change.  Motion 35/19 directed that:

 

“Staff also include in any competitive procurement process a requirement that all applicants provide for future adaptability with respect to new technologies, both with respect to current technologies (such as cell phone/text notification to individual parking meter customers of pending expiration of paid parking periods, along with the ability to replenish their time on the meter via cell phone and/or text messaging and the acceptance by meters of comprehensive "smart" cards, including a card that is used to pay/acquire service in multiple city service areas (e.g.: transit, library, parks and recreation), and any technological innovations that are not yet in use but which could become available over the course of the contract and could improve efficiency of service to Ottawa parking meters”.

 

In response to this direction, staff has included a number of requirements to account for various potential technological changes and upgrades.  The following discusses specific options that have been considered.  Each option and the respective strategy to account for the option is outlined in turn:

 

Smart Cards

Presently, the City operates a Parking Smart Card program to provide parking customers with a convenient way to track and pay for parking use at City-owned off-street lots and garages.  To maintain this functionality, the City will require the Contractor to select a Smart Card technology which best interacts with their machines and make the Smart Cards available for sale.  In the event the Contractor selects a technology that is not compatible with the type of card currently in circulation, a replacement program will be established so customers can transfer the outstanding value of their old cards.

 

With respect to a Smart Card used for ‘multiple city services’, the Smart Card payment system being developed for OC Transpo has such potential in the short- to medium-term.  However that project has not yet identified how other uses (such as the Pay and Display machines), will be accommodated.  The parking payment machines are therefore required to have Smart Card readers compatible with the Smart Cards being introduced on OC Transpo.  Once the specifications for use of these cards with secondary applications are known, it will be possible to enable them to work with the parking payment machines. 

 

EMV Chip Cards

The credit card industry has been evolving toward 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.  The EMV cards therefore require an appropriate 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 well and simply require a different type of card reader.  However, the United States has not adopted 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.  The minimum specifications require the successful proponent to work with the City in the development of any corresponding upgrades.  The City will retain the right to determine whether to proceed with any upgrades at any given time.

 

Pay-by-Phone

Pay-by-Phone systems allow customers to buy parking services by making a cell phone call or text message transmission.  They generally require customers to be pre-registered, setting up an account with a credit card to which charges will be applied.  Customers can then be notified of the pending expiry of their parking purchase and the customer is generally allowed to extend the purchase (parking time limits would still apply).

 

While Pay-by-Phone systems provide some additional options for customers, they also introduce new costs (e.g. back office operation, communications and additional enforcement costs).  There are also complications for enforcement as officers must now check the vehicle for a Pay and Display payment ticket and use a mobile device capable of interacting with a real-time database for the Pay-by-Phone system to see if the vehicle has time remaining that has been paid for by phone.  Some systems shift at least some of the costs back to the user as a convenience fee.

 

The minimum requirements within the Request for Submission specify that the final preferred proponent must provide a system that is adaptable to Pay-by-Phone technology.  This is something that will require careful consideration on the part of the City.  Once the successful proponent has been selected, details of potential Pay-by-Phone systems will be discussed and a full cost-benefit analysis will be conducted, the results of which will be presented to Council.

 

Pay-by-Space

Pay-by-Space is used in Montreal where it has been integrated into a Pay and Display system.  This system retains the painted lines that delineate each regulated on-street parking space at which paid parking can be purchased (as with Ottawa’s current parking meter infrastructure).  A customer enters the parking space number at the Pay and Display machines and receives a ticket specifically for that space.  The advantage is that the customer need not return to the vehicle to display the ticket.  However, using marked parking spaces requires each space to accommodate all vehicles, large and small.  This eliminates the potential increase in the parking capacity that would otherwise result if cars were allowed to fill the available space.  With a trend toward more compact vehicles, this could result in substantial inefficiency in parking management and a loss in capacity and foregone revenue.  Proponents may propose Pay-by-Space as an option, but there is no specific requirement in the Request for Submission that this approach be included as part of their submission.

 

Pay-by-Plate / Photo Tracking

As the name suggests, Pay-by-Plate associates the purchase of paid parking with a parking customer’s license plate number.  This is primarily for the benefit of parking enforcement, which can then automate the process with photo tracking.  It also allows the customer to leave the parking payment machine after payment without returning to the vehicle, although the payment process itself takes longer.  In Calgary, parking enforcement vehicles have been outfitted with a series of panoramic cameras.  As the enforcement vehicle passes along a street, a photo of each license plate is captured, along with a timestamp and GPS reading.   The information is then correlated with the Central Management System payment data to determine whether the customer has paid for parking at that time.  When it is determined that an infraction has occurred, a fine is issued to the vehicle registrant by mail with a copy of the photo evidence.

 

Two concerns arise with the use of Pay-by-Plate and photo enforcement in Ontario.  The most practical concern is that Ontario law requires that a parking ticket be placed on the illegally parked vehicle or served to the driver at the time of the infraction.  Mailing the ticket is not an allowable means of service.  A review of the Provincial Offences Act was recently conducted and it recommended that mailing tickets should be allowed, but only when necessary to reduce risk (for example, the risk of a Parking Enforcement Officer trying to serve a ticket to a motorist who chooses to drive away). 

 

The second concern relates to the collection of a customer’s licence plate number at the point of each sale and during each enforcement pass.  This creates a database of personal information with references to locations and times.  This could in turn raise important privacy concerns.  Significant controls would need to be developed to ensure the proper use and disposal of this information. 

 

Proponents may propose Pay-by-Plate as an option, but there is no specific requirement in the Request for Submission that this approach be included as part of their submission.

 

With regards to the enhancements and features discussed above, proponents are invited to propose any of these extra services or features as “options”.  They are also invited to provide information on any other options they believe will improve the City’s parking system.  The proposals for optional features or services will not be evaluated in the selection of the final preferred proponent.  Any options proposed by the final preferred proponent will be evaluated after the awarding of the contract using a cost-benefit basis and presented to Council for final consideration (if appropriate). 

 

Contract Management and Risk

The Agreement as presented contains a number of provisions to facilitate effective contract management.   The specifications include a series of performance standards relating to such things as machine downtime and maintenance response times.  The Contractor is required to provide regular reports documenting whether performance standards are being met and liquidated damages must be paid to the City when the performance standards are not met.  The City will also have access to the Central Management System, allowing it to determine the status of machines and prepare ad hoc reports as and when required.

 

In addition to liquidated damages, the Agreement contains a number of clauses to protect the City in the event of a contractor default, including failing to meet bonding and insurance requirements.  The default provisions allow the City to terminate the Agreement if the Contractor fails to achieve final acceptance of the first 100 machines within six months of executing the Agreement, abandons the work, or is in substantial breach of its performance obligations or has consistently been non-compliant.  In the event of default, the City may, among other things, terminate the Agreement, recover the contractor’s performance security ($2 million upon execution of the Agreement and declining to $500,000 upon final acceptance), return the machines to the contractor (wiping out the outstanding balance of payments owed on the machines), or keep the machines and off-set any additional costs against the balance outstanding on the machines. 

 

There are also provisions to resolve any disputes that may arise, and provisions to facilitate transition at the conclusion of the Agreement.  Remedies for dispute resolution include escalation, eventually to the Deputy City Manager, and subsequent mediation and binding arbitration if necessary. 

 

At the expiration of the term of the Agreement, should the parties not wish to approve an extension, an orderly transition process has been set out with both parties agreeing to submit to a Transition Plan to unwind the system infrastructure and dispose of the assets.  The City will have the option at this point of continuing to operate the system, or switching to a new system if appropriate.

 

During the term of the Agreement, the Contractor will be responsible for all aspects of the Parking Operations System, from supply of hardware and software, to operations and maintenance of the system.  This allows for clear accountability should there be any issues with respect to the operation of the system, and allows clear allocation of risk to the Contractor.  The table below (Table 1) provides a summary of how the proposed Agreement allocates risk between the City and the Contractor.

 

Table 1 – Risk Allocation

 

Risk

Contractor

City

Parking Policy

Policy change could effect ability to capture capital costs

Decides policy

Revenue

Guarantees 22% increase in on-street revenues (with base adjusted for any policy changes)

Only loses revenue if it changes parking policies

Capital Costs

Must absorb any unexpected costs

Prices guaranteed for 10 years

Operating costs

Must absorb any unexpected costs, protected to the extent that costs paid by the City will increase at 75% of the CPI

 

Prices guaranteed for 10 years, subject to increases at 75% of CPI

Financing Costs

Must arrange financing

Cost of financing guaranteed for 10 years

 

Poor performance of system

Responsible to correct problems, regardless of cost, liable for liquidated damages if performance standards not met

Revenue guaranteed. May cancel contract if repeated breach of performance standards

Vandalism, theft of cash

Responsible to repair or replace machines, compensate City for any cash stolen

No Risk

Credit Card fraud

Required to provide real time verification of cards except when City directs otherwise, responsible for any fraud resulting from ineffectiveness of real time verification

Only when contractor directed to use batch processing, (e.g. to maintain customer service during communications failure)

Damage to or theft of machines

Required to repair or replace machines

Has liability for damage caused by City forces (e.g. winter operations) and to help Contractor identify City contractor that causes damages

 

 

The Ottawa Option Procurement Process

 

As has been outlined, the Ottawa Option procurement process is proceeding under the Ottawa Option Policy.  To this point, it has involved the initial receipt of Precise’s unsolicited proposal, the identification and clarification of the City’s requirements, the preparation of the comprehensive documents found in the Request for Submission, Document 3 as held on file with the City Clerk’s office and finally the receipt and evaluation of Precise’s re-submitted priced proposal.

 

The following table (Table 2) outlines the remaining steps in this process and provides the anticipated timeframes to follow.  Note that there is one more report scheduled for Transportation Committee and Council.  This will occur once staff has identified the final preferred proponent and has prepared a report to Council recommending that Council accept the final preferred proponent.  Council will then decide on whether to accept the final preferred proponent as the successful proponent and to authorize staff to proceed with the finalization of the Agreement and the implementation of the Parking Operations System. 

 

In the event that Council does not accept staff’s recommendation, a partial list of options for Council could include:  (1) the re-assessment of the final preferred proponent’s proposal by staff and the preparation and presentation of revised recommendations to Council, (2) the rejection of the final preferred proponent’s proposal and the selection of the next lowest NPV proposal that has met the minimum response requirements, or (3) the cancellation of the Ottawa Option procurement process.

 

Table 2 – Remaining Steps in Ottawa Option Procurement/Implementation Process

 

Time Period

Milestone

2009

April

Report to Council on Request for Submission and re-submitted bid from Precise.

April – July

Union review of and response to Precise’s proposal.

July - August

Issue Request for Submission to marketplace (via Merx).

August - September

Receive and evaluate bids.

October

Identify the initial preferred proponent; Precise is provided the opportunity to match or beat the lowest bid (if a lower one exists)

December

Final report to Council for approval to proceed with the final preferred proponent.

2010

January

Finalize and execute of agreement with successful proponent and installation of first 100 machines of the primary order.

March - April

Final Acceptance and realization of System Start Date.

Spring

Installation of remaining units in primary order.

 

 

Once all competing submissions are evaluated, the proposal that meets all requirements and has the lowest Net Present Value (NPV) will be the initial preferred proponent. 

 

The NPV figure of a given proponent is determined by calculating the cost of all elements of the proposal (including equipment and services) as well as the net incremental revenue the City can expect based on the timing of  the proposed implementation plan.  The NPV calculation does not incorporate elements the bidders will not directly influence; for example, the reduced costs of City operations.  As each proposal will incorporate many different prices for different elements of the project, this enables an equitable comparison of the proposals.

 

Pursuant to the Ottawa Option Policy, if a proponent other than Precise submits a proposal, which meets the Minimum Response Requirements and which has a lower NPV, Precise will then be provided the opportunity to match the NPV of the initial preferred proponent or to propose a lower NPV.  If Precise matches or submits a lower NPV than the initial preferred proponent, it will be designated the final preferred proponent.  Should Precise not match or submit a lower NPV than the initial preferred proponent, then the latter will be designated as the final preferred proponent.

 

Whatever the outcome, the specified evaluation process includes provisions for the City to conduct due diligence as required to ensure the final preferred proponent is capable of meeting its commitments to deliver the Parking Operations System.

 

Once the Ottawa Option procurement process has concluded with the execution of the Agreement, the next step will be the installation of the Pay and Display machines and implementation of the Parking Operations System.  It should be noted that how the Ottawa Option procurement process unfolds could potentially influence the timing of implementation.  The preceding table (Table 2) outlines a tentative schedule, but the actual implementation date could be earlier or later.  Staff will continue to work to ensure that the equipment and related systems are implemented in a timely manner.

 

 Protocol For Making Representations to Councillors and City Officials

 

Although the City does not regulate interaction between proponents and Councillors or City officials during a procurement process, the framework set out in the Ottawa Option Policy presents a unique situation.  In accordance with that framework, Precise is currently the only proponent actively engaged in the procurement process.  As such, Precise is prohibited from making representations to Councillors or City officials due to the “no lobbying” provision contained in Clause 1.13 of the Request for Submission.  That clause specifically states that “prospective proponents and proponents or anyone acting on their behalf shall not engage in any form of political or other lobbying whatsoever with respect to this procurement or attempt to influence the outcome of the RFS evaluation process.”  However, other prospective proponents who have not yet submitted proposals and are therefore not bound by the restriction in the Request for Submission could make representations to Councillors or City officials.

 

In light of the foregoing, and in fairness to all proponents involved in this Ottawa Option procurement process, the following proposals constitute a protocol to address this unique situation.  Any representations that may be made to Councillors or City officials, by actual or prospective proponents, will be limited to a two week period beginning on April 8, 2009 and ending on the day before the report is considered by Council (e.g. April 21, 2009).  Following Council’s decision, all proponents (including Precise) and prospective proponents will be prevented from making any further representations to Councillors or City officials (except the authorized City representative identified in the Request for Submission).   

 

Traditionally, Councillors are not obligated to accept representations from, or meet with, any potential proponent in a procurement process.  That being said, the short timeline in this instance as well as the unintended effects of the “no lobbying” restriction in the Request for Submission imposed on Precise have required a rather unique, proposed resolution.  Therefore, if prospective and actual proponents are provided the opportunity to make representations to, or have meetings with, Councillors or City officials, the proponents are required to abide by a strict protocol as proposed by the Fairness Commissioner.  All actual and prospective proponents will be briefed on the following protocol:

 

·        No unauthorized communication may take place during proposal preparation and evaluation;

·        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 potential proponents, or provided by City officials or Councillors during the information exchanges;   

·        All potential proponents must provide reasonable notice of a request to meet with City officials or Councillors; and

·        Meetings are not to be exclusive with reasonable access provided to City officials and Councillors to all potential proponents.

 

The Fairness Commissioner has been (and will continue to be) involved in all aspects of this Ottawa Option procurement process including the development of the above-noted protocol.  To date, this has helped to ensure a transparent, open and fair procurement process.  The Fairness Commissioner has prepared an interim report (dated March 6, 2009), which is attached as Document 4 and certifies the process to date has been undertaken in a fair, open and transparent manner. 

 

Consideration of Submissions

A re-submitted proposal from Precise was received by the City on 2 March 2009.  It has been assessed by the City’s Evaluation Team to ensure that the minimum requirements of the Request for Submission and the Agreement are satisfied.  The financial component of the Precise’s submission, including the Net Present Value, was also assessed.

 

The Net Present Value of Precise’s proposal is $12,454,019.  NPV has been used as the basis for evaluation, as per the Council report of 3 April 2008.  As such, no specific financial information relating to Precise’s re-submitted proposal has been presented in this report.  This also reflects the commercial confidential and proprietary nature of the information and aids to ensure the integrity of the process.

 

Competing submissions will be solicited, received and evaluated in the same manner as conducted for Precise including an assessment of their respective Net Present Values.  Proponents will be given the spreadsheet used to calculate the NPV so they can create their bids on an informed basis.

 

In order to ensure that the City of Ottawa is entering into an arrangement that best represents its financial interests, a series of business case analyses will need to be completed before proceeding with the implementation of the full Parking Operations System.  While there are advantages to having one party responsible for all aspects of the Parking Operating System, alternative options will be examined to determine if there would be savings by altering the approach to this arrangement.  In presenting the subsequent report to Transportation Committee and Council, staff will address whether the project is in conformity with the City’s long-term objectives, including financial and strategic.

 

It should be noted that the City of Ottawa has reserved the right to reduce the scope of this Agreement if it is deemed in its best interest to do so.  In particular, the City may reduce the scope of the Agreement following discussion with the Union or following the financial analysis discussed above.

 

CONSULTATION

 

Consultations have been held with CUPE 503, the Business Improvement Areas (BIAs) and others involved in the review of parking policy in the preparation of this report.  In addition, the development of the system specifications was reflective of the public discussions on 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.

 

LEGAL / RISK MANAGEMENT IMPLICATIONS

 

The Ottawa Option Policy is an exception to the existing processes in the City of Ottawa pertaining to the purchase of goods and services.  The procurement process has a number of features that differentiate it from more traditional procurement processes undertaken by the City.  All steps possible have been taken to minimize any legal risks by ensuring, through the oversight of the Fairness Commissioner, that all proponents will be treated fairly.

 

FINANCIAL IMPLICATIONS

 

In the April 2008 report to Council regarding the receipt of an unsolicited proposal, it was estimated that conversion to Pay and Display technology would result in a net gain of $1.595 M annually. Due to the current expected timing of implementation of Pay & Display equipment, the forecasted revenue gain of $300,000 in 2009 will likely not occur.  Future budget submissions will be adjusted for the impacts of a Pay and Display based Parking Operations System beginning in 2010.

 

The subsequent report that will be forthcoming to Transportation Committee and Council will identify the final preferred proponent as well as the details of their financial submission.  In turn, a complete internal analysis will be presented at that time.

 

Apart from the NPV, no specific financial information relating to Precise’s re-submitted proposal will be disclosed in this report.  This reflects the commercial confidential and proprietary nature of the information and aids to ensure the integrity of the process.

 

In advance of the next report to Transportation Committee and Council, staff will also fully consider options relating to how the revenues and capital payments will be handled through the term of this agreement.  Based on the nature of the proposal, net revenues could vary broadly between the first five years of the agreement and the latter five years (due to capital payments starting in year six). 

 

In the next report, staff will propose a method of approaching any variations in revenue and capital repayments such as setting aside funds annually for future obligations such as at termination or reserving funds for complete pay out of the capital account. Consideration will also be given to setting aside funds in the parking reserve for future replacement of parking equipment technology both on and off-street including back office technology.

 

SUPPORTING DOCUMENTATION

 

Document 1 - Ottawa Option Policy

Document 2 - Summary of Parking Operations System Specifications

Document 3 – Draft Request for Submission and Supporting Documents that include:

                        Draft Request for Submission (including System Specifications)

Draft Parking Operations System Agreement (including System Specifications) Request for Submission- Addendum No. 1

                        NPV evaluation tool

All 4 sections of Document 3 are held on file with City Clerk’s office

Document 4 - Fairness Commissioner Report

 

DISPOSITION

 

Staff from Public Works, Supply Management and Financial Services will carry out 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:

 

Ř    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.

Ř    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;

Ř    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;

Ř    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;

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

Ř    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; 

Ř    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);

Ř    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

Ř    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;

·        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.

·        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;

·         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;

·         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; 

·         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. 

·         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. 

·        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% 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.

·        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

·        $5,000,000 for Motor Vehicles

 

Document 4- REPORT of the Fairness Commissioner

 

 

City of Ottawa

Pay & Display Parking Operations System

Ottawa Option Procurement Process

 

 

Fairness Commissioner’s

Interim Report

 

March 6, 2009

 

 


March 6th, 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 scale, scope, technical’ 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

·         Evaluators are informed related to evaluation process and tools will be used correctly

·         There are no conflict of interest issues amongst evaluators

·         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:

 

·                     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 Parking Operation System Agreement (POSA)

·                     Draft Request for Submissions (RFF) 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 Process

 

We attended the following:

·         Review session(s) of the draft Schedules

·         Review session(s) of the draft POSA

·         Review session(s) of the draft RFS

·         Commercial Confidential Meetings with Original Private Sector Proponent (Precise)

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

·         Receipt of Precise re-submitted proposal and completeness review

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

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

 

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.

 

Next Steps

 

The Evaluation Committee will submit 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.

 

Where the recommendation is approved, the next steps would include issue RFS to solicit competing proposals; receive and evaluate submissions; selection of successful Proponent and 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); and debriefing sessions for unsuccessful proponents.

 

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.

 

Original signed by
Louise Panneton

 

 

Original signed by
Patricia Tessier

 

Louise Panneton                                                            Patricia Tessier                                       

Lead Fairness Commissioner                                        Fairness Commissioner