Agenda Item Wording:
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Authorize the City Manager to award a sole source contract to AMCS Group, Inc. in the amount not to exceed $505,835 for the software integration, hardware upgrade and maintenance of twenty (20) on-board computers in Solid Waste front-load commercial trucks, including a 10-year maintenance contract comprised of an initial five (5) year term and five (5) additional 1-year renewal options. Also, authorize the appropriation of $61,936 for FY 22/23, and $54,165 for FY 23/24 from the Solid Waste Enterprise Fund (441).
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Deadline for Action: 4/3/2023
Submitting Department: Public Works
Contact Name and Phone Number: Jason Serpa, Public Works Manager, jason.serpa@visalia.city, 713-4533 Nick Bartsch, Public Works Director, nick.bartsch@visalia.city, 713-4052
Department Recommendation:
Staff recommends that City Council authorize the City Manager to award a 5-year sole source contract with an additional five 1-year renewals to AMCS Group, Inc. in the amount not to exceed $505,835 for the hardware upgrade and maintenance of twenty (20) on-board computers in Solid Waste front-load commercial trucks, along with the corresponding software integration, and appropriate $61,936 for FY 22/23 and $54,165 for FY 23/24 from the Solid Waste Enterprise Fund (441).
Background Discussion:
On September 8, 2015, City Council directed staff to pursue an in-house utility billing software and associated technology. At the same time, staff was directed to develop a plan for the implementation of a 3-can residential waste system. In October of 2016, staff requested proposals from qualified vendors for the purchase of a utility billing software that included technology upgrades for solid waste operations. The Request for Proposal was specifically written to provide a new utility account billing system and a full solid waste operations system that included on-board computers, cameras, and radio frequency identification (RFID) tags for the City’s various cans and bins.
On November 20, 2017, City Council authorized the City Manager to enter into contract with AMCS Group, Inc. for the purchase and implementation of a new utility billing system and a solid waste operations system. On January 1, 2019, the utility software became live, and all utility business operations became an in-house enterprise for the City of Visalia. At the same time, the technology and on-board computers were installed in the existing solid waste trucks. In the summer of 2019, the 3-can conversion for all residential services was completed.
Even though the hardware on the trucks was operational, unfortunately, the integration with the utility software was not completed at that time. Apart from realizing and implementing route efficiencies in the operations of the Solid Waste Division, the added benefit of the truck equipment is the ability to integrate operations with utility billing staff. This will allow for new accounts or services to be added and sent to the driver’s computer in the truck, thus automatically updating the route. It also allows utility staff and supervisors access to see what specific cans/bins have been serviced and the location of the truck in real-time. The original project, which budgeted funds to develop the software integration, was not completed in part due to the impacts of COVID-19 in early 2020. At that time, the project came to a halt and the remaining project funds were ultimately released back to the fund.
To be fully effective, the project needs to be completed. This includes the software integration along with upgrades to some of the hardware in the trucks. Replacement refuse vehicles have been purchased since the initial installation, and therefore some of the hardware will need to be upgraded and transferred to the new trucks. Finance Utility Billing staff has been working diligently to compile and import the required data into the AMCS Utility Software, which will then be integrated into the hardware in each truck. Solid Waste staff has have been working to ensure that routes are complete with RFID tags so the system is functional upon the completion of the remaining hardware installation and upgrades.
Past installation:
The installation that occurred in FY18/19 included all trucks in the Solid Waste fleet. This included residential and commercial trucks. The authorization currently being requested is for the re-installation and upgrade of the commercial trucks only. The commercial division currently has a total of 19 trucks out of the fleet of 59. In addition to the current 19 trucks, the cost of one additional truck installation and ongoing operations has been budgeted to cover the need for fleet expansion in the coming years. Staff will be revisiting the installation and upgrades to the Residential Division trucks after the successful upgrade and implementation of the Commercial Division fleet.
It is important to note that the current re-installation and upgrades include hardware that would have needed to be presently replaced in any event. For example, the previous devices installed in FY18/19 utilized 3G capability, which is no longer supported by wireless carriers.
AMCS Group, Inc has proposed a plan for necessary upgrades that considers the viable components from the previous install. These components include the RFID antenna, tilt sensor, the control unit for the tilt sensor, and the in-cab screen for driver operation. The components that are being replaced are the on-board computer, peripheral kit, and other items as needed such as frayed wiring or new connectors.
Fiscal Impact:
AMCS Group, Inc. has developed an agreement that the City can utilize to complete the upgrade and re-installation of the truck equipment, while also providing ongoing service. The City is able to take advantage of a Hardware as a Service Subscription (HaaS) model that lessens the initial cost of the equipment and includes installation and ongoing maintenance warranties. The proposed pricing considers the delays in implementation and integration from the past installation.
The Hardware as a Service (HaaS) model has many advantages, both in the initial cost and future obligations for installation and repairs. If the City were to subscribe to the HaaS model, AMCS assumes all future on-going maintenance costs.
Figure A illustrates the advantages of the HaaS model by comparing the year to year costs over the initial 5-year contract term. The initital term includes a one-time cost of $61,936 for equipment and software integration, and $$54,165 for the following year when accounting for possible truck installations. These initial amounts will be appropriated with the approval of this authorization, and future years will be appropriated through the normal budgeting process.
*Estimate based on projected future truck purchase installations.
Beginning in 2028 (contract term 6), an annual CPI increase is included per AMCS’s proposal. Figure B illustrates the final 5 years of contract, assuming the maximum 3% CPI increase allowed within the contract:
*Estimate based on projected future truck purchase installations.
With the HaaS model, the City would benefit from getting upgrades on hardware and software at no additional charge. In addition, all initial installation of equipment is included.
Figure C shows the total 10-year cost for the HaaS subscription method:
City staff also reviewed an alternative purchase option presented by AMCS that included all equipment for a one-time purchase price up front but did not provide ongoing service or warranties. The advantages to the HaaS subscription model far outweighed this option in the short and long term due to no cost equipment upgrades and warranty. Figure D below shows the yearly side by side comparison of purchasing the components versus the HaaS agreement:
Prior Council Action: September 8, 2015: Council directed staff to pursue an in-house utility billing software and associated technology; and bring back recommendations for a conversion to a 3-cart system. November 20, 2017: City Council authorized the City Manager to enter into contract with AMCS Group, Inc. for the purchase and implementation of a new Utility Billing System and a Solid Waste Operations System.
Other: N/A
Alternatives: Not approve the authorization to enter contract with AMCS Group, Inc. and direct staff to issue a new Request for Proposals for other vendors to participate. Not approve the authorization to enter contract with AMCS Group, Inc. and continue to operate Solid Waste routes with manual routines and procedures. (This alternative is not recommended by staff as truck upgrades are needed to realize efficiencies within the Commercial Solid Waste operation.)
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to authorize the City Manager to enter into a 5-year sole source contract with an additional five 1-year renewals to AMCS Group Inc, utilizing the Hardware as a Service (HaaS) model for the upgrade of twenty (20) on-board computers in Solid Waste front-load commercial trucks and corresponding software integration in the amount not to exceed $505,835 and appropriate $61,936 for FY 22/23 and $54,165 for FY 23/24 from the Solid Waste Enterprise Fund (441).
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Environmental Assessment Status: N/A
CEQA Review: N/A
Attachments: AMCS HaaS Proposal
AMCS Integration Proposal
AMCS Support Service Proposal
Sole Source Memo
AMCS HaaS Terms and Conditions