Item Coversheet
City of Independence
BILL NO. 17-115Failed

Agenda Title:

17-115 - 2R. An ordinance authorizing execution of an agreement for advanced metering infrastructure contract services with Core & Main, LP in the amount of $29,698,667.00; and further authorizing execution of agreements for software, services, and support with Sensus Usa, Inc., N. Harris Computer Corporation, and Exeleron Software, LLC; and increasing appropriations in the amount of $10,467,362.00 from the Power & Light Fund, $15,618,390.00 from the Water Fund, and $1,735,377.00 from the Water Pollution Control Fund for the Electric and Water Advanced Metering Infrastructure Project and authorizing future minor change orders for an amount not to exceed $2,501,921.00 and/or time extensions.

Council action to approve issuance of these contracts.

On June 1, 2015, City Council passed Resolution 6013 that directed the City Manager to prepare a feasibility study to evaluate the benefits and costs of advanced metering infrastructure (“AMI”) for both the electric and water utilities. The Power & Light Department retained West Monroe Partners, Inc. to develop a Business Case Study including a Benefit/Cost Analysis. The AMI Business Case Study started September 1, 2015 and the results were submitted to City Council on February 8, 2016. The results showed a net positive benefit to the City.


On October 3, 2016, City Council approved a contract with West Monroe Partners, Inc. for the development of blueprint methodology and the creation of a Project Blueprint that would further define and de-risk the AMI Deployment Project. Through numerous detailed workshops, working sessions and AMI vendor presentations, West Monroe Partners, Inc. was able to collect information and provide an update to the Business Case Analysis (“BCA”) developed for the City of Independence. The revised analysis showed a significant improvement in the benefit to cost ratio from the previous study. This was due to a switch in strategy to proceed with a “Software as a Service” (“SaaS”) solution. These results of the Blueprint process were presented to City Council on March 13, 2017 and a recommendation was given to proceed with a Request for Proposal for Advanced Metering Infrastructure.


The Procurement Division issued a Request for Proposals (RFP) on April 3, 2017, for the purchase and implementation of Advanced Metering Infrastructure. The scope of the RFP included Advanced Meter Infrastructure (AMI) system services for the City’s Electric and Water utilities and a communications infrastructure to meet the City’s AMI strategic goals. It also specified services for the design and installation of the AMI system and all other supporting systems, using a Software as a Service (SaaS) solution for software applications provided by the Vendor. Additionally, it specified that the Vendors also provide a Managed Services solution that, when combined with the SaaS solution, would allow the City to pay monthly fees for AMI services for ten (10) years to the Managed Service Provider (MSP).


The RFP was published on Public Purchase, the City's e-procurement system. Approximately 469 potential respondents were notified of the RFP; 121 accessed the RFP.


A pre-proposal conference was held on April 19, 2017, to discuss the RFP requirements with potential respondents. The RFP closed on May 31, 2017, with receipt of 7 proposals: Itron, HD Supply Waterworks (Sensus), Honeywell, Landis+Gyr, Aclara, Graybar (Silver Spring Network), and Smart Energy Systems (SES). SES failed to submit a complete bid response and was removed from further consideration as a non-responsive bidder.


The City’s AMI evaluation committee, comprised of City staff from the Power & Light, Water, and Water Pollution Control Departments, evaluated the remaining 6 proposals. Evaluation criteria in the RFP included 1) Price, 2) Qualifications and Expertise, 3) References, and 4) Response to Requirements. The Response to Requirements Section represented the largest component (65%). This section contained 17 different categories with over 980 compliance requirements. From the proposals received, the evaluation committee selected the two top-ranking vendors to provide demonstrations of their products and services. The two vendors were Honeywell and HD Supply Waterworks.


Each firm provided a rigorous one-day demonstration before City staff from all City departments involved. During the presentations, each Vendor detailed specific areas of their proposal and through subsequent conversations received a better understanding of the City’s overall requirements. This enabled each Vendor to better clarify their responses to the Technical Requirements and also allowed them to consider pricing adjustments based upon a better understanding of the City’s preferred solution. At the conclusion of the presentations, each Vendor was asked to update and resubmit the technical compliance requirements document and pricing spreadsheet for further evaluation.


The updated compliance information and pricing updates were presented to the Evaluation Committee for consideration. Based on the final scoring, the Evaluation Committee then instructed the Purchasing Department to request a best and final offer from HD Supply Waterworks that included an electromagnetic water meter option. The best and final offer included a 1.4 million dollar reduction from the original pricing. Staff contacted references to learn more about the HD Supply Waterworks AMI solution, receiving satisfactory responses from each. Based on the final submittals, the Evaluation Committee determined that HD Supply Waterworks provided the most reliable and cost effective solution based on the established evaluation criteria and recommended this Vendor for award.


With the guidance of the City’s Legal Department and the project consultant West Monroe Partners, the agreement documents listed below and included in their entirety as attachments were negotiated for the purchase, implementation and support of Advanced Metering Infrastructure. During contract negotiations, HD Supply Waterworks notified the City that they had been sold by their parent company to Clayton, Dubilier, and Rice, a private equity firm. Staff determined that this sale represented little change to the proposal since the branch and local sales locations are to remain the same. All management personnel are to remain the same, all supplier relationships and agreements remain the same, and any current contracts are still in place and valid. As part of this transaction, HD Supply Waterworks became a standalone company with the name changed to Core & Main LP.


During a special meeting with the Public Utility Advisory Board (PUAB) on September 7, 2017, staff presented a summary of the AMI request for proposal process and the final offer from HD Supply Waterworks. The PUAB unanimously approved a motion to recommend to the City Council that the City Manager execute a contract with HD Supply Waterworks, with the understanding of the name change to Core & Main, LP.


The total price reflects the purchase and implementation of Advanced Metering Infrastructure including material, labor, software, support, annual recurring fees, and maintenance for 10 years. Upon approval of these contracts, a three-phased implementation will begin in November 2017, with a targeted deployment completion date of September 2020.


Approval authorizes the Procurement Manager to issue change orders up to a total of ten (10) percent of the original amount, providing appropriations are available.


Contracts that comprise the overall agreement package for the Electric and Water Advanced Metering Infrastructure Project are as follows:


• Agreement for Contractor Services with Core & Main LP f/k/a HD Supply  Waterworks, Ltd. in the amount of $29,698,667 for the purchase and implementation of Advanced Metering Infrastructure for the Electric and Water utilities.


• Advanced Metering Infrastructure Agreement with Sensus USA Inc. for FCC Licensing, Hosting and Managed Network Services. Costs for these services are included in the Contractor Services Agreement with Core & Main and will be invoiced by Core & Main over the 10 year term of the Agreement.


• Software as a Service Agreement with N. Harris Computer Corporation for integration services and software interfaces to access and manage hosted meter data to the City’s utility billing platform, customer web portals, and engineering applications. Costs for these services are included in the Contractor Services Agreement with Core & Main and will be invoiced by Core & Main over the 10 year term of the Agreement.


• Software Access Agreement with Exceleron Software, LLC for the setup, management and ongoing usage fees for the web based MyUsage pre-pay billing software. Exceleron will bill the City directly for these services.

Fiscal Impact:

Amount:        $29,698,667 over a 10-year period


The capital improvement portion of this project during the first three years will be allocated between the utilities as follows:


     IPL $ 7,960,055
     Water $12,994,744
     WPC $ 1,443,860
     SUBTOTAL $22,398,659

The operating budgets of each of the utilities will support the annual operating expenses during the ten year contract in the following amounts:


     IPL $ 6,570,007
     Water $ 657,001
     WPC $ 73,000
     SUBTOTAL $ 7,300,008

     Grand Total $29,698,667

The utilities are also requesting, via this ordinance, authorization for additional appropriations to be made in their respective capital improvement programs for the capital portions of this contract (Core & Main), the related 10% change order amounts, the project management contract with West Monroe Partners and make-ready telecommunications infrastructure work:

      IPL Project No. 70201512   $10,467,362
      Water Project No. 70401705   $15,618,390
      WPC  Project No. 70301708  $1,735,377
      TOTAL $ 27,821,129

Department:          Power & LightContact Person:          Andrew Boatright

City Clerk DepartmentApproved

Council Action:          Council Action:          Accepted

Core & Main OrdinanceOrdinance
Core & Main ContractContract
Exceleron ContractContract
Management Analyst Review AMI Backup Material