With public safety at the forefront, intense public scrutiny and international technology vendors responding, could the stakes be any higher? This article explores how a progressive Vancouver-based organization structured and conducted a procurement process for a major upgrade to its emergency communications system, incorporating significant market assessment and vendor input for an iterative refinement of technical and other specifications to be included in the contract.
E-COMM Emergency Communication for British Columbia Inc. (“E-COMM”), provides 9-1-1 service for Metro Vancouver and 24 other regional districts and communities spanning from Vancouver Island to the Alberta border and the U.S border to north of Prince George. E-COMM also provides emergency dispatch services for 35 police agencies and fire departments throughout British Columbia. They own and operate the wide-area radio network used throughout the Lower Mainland by police, fire and ambulance personnel. In 2013, E-COMM embarked on a multi-stage procurement process to define and plan a multi-year program – the Next Generation Radio Program (“NGRP”) – to refresh its existing radio system; this required both infrastructure and subscriber equipment and related products and services. The focus of this article is on the procurement of trunked land mobile radio infrastructure equipment and related services.
Governance Structure for the Project
Prior to embarking on this major procurement, E-COMM set up several layers of internal and external oversight, including its Board of Directors, senior executives and external users of the system and other stakeholders.
The Board Special Committee on NGRP involved a subset of the E-COMM Board of Directors representing a majority of the jurisdictions that fund the radio system, with a mandate to provide strategic oversight and guidance for the program.
The Internal Steering Committee was comprised of VPs, Directors and the Controller from E-COMM, with a mandate to provide executive oversight and governance of the procurement process.
The NGRP Working Group, established at the direction of the E-COMM User Committee, was made up of system user agency representatives and participated in an initial Proof of Concept process, subsequently signing off on the final technical specifications for inclusion in the RFP.
The Evaluation Committee was made up of E-COMM employees acting as subject matter experts comprised of representatives from technology and finance, as well as an external technical advisor. This group met regularly throughout the entire planning and subsequent procurement processes. Meetings were facilitated by the procurement advisor and the Controller (representing E-COMM procurement), who were not part of the formal Evaluation Committee.
In addition to technical and procurement advisors, External Fairness Advisors were engaged to provide oversight and advice on fairness-related issues at each significant stage of the procurement process.
Preliminary Research and Proof of Concept Stage
With rapidly changing technology and increasing demands from an expanding customer base, E-COMM staff understood the importance of thoroughly canvassing the marketplace to ensure they understood the most viable options for the next generation of infrastructure, before embarking on a competitive process for the NGRP. Preliminary investigation and RFI research showed that Project 25 (P25) technology in the 700 MHz band for the infrastructure was the most appropriate.
To validate this assumption, E-COMM selected a vendor through a sole source arrangement to participate in a Proof of Concept process, making it clear that this vendor could not be involved with the subsequent RFQ and RFP processes to actually supply the infrastructure. The purpose of the Proof of Concept stage was to validate the technical performance standards of P25 equipment, and to develop a level of comfort for the users so that they understood how and why the system would incorporate P25 technology. For a project of this magnitude and political sensitivity, E-COMM recognized the critical importance of securing user buy-in at the earliest preliminary planning stage, and thus invited significant input from the users via the NGRP Working Group before finalizing the technology to be used. During this phase, E-COMM erected one test site using the P25 technology so that the users could test the performance of the system in a live environment. The Proof of Concept stage was successfully completed, with the Working Group and User Committee formally signing off on proceeding with the procurement of 700 MHz P25 technology for the NGRP.
Stage 1: Request for Information
As an initial market engagement step, a Request for Information was conducted solely for the purpose of gathering market and other information related to technical and other capabilities, in order to inform the planning for this significant procurement process, and for the subsequent procurement process for subscriber equipment. On May 3rd, 2012, E-COMM’s RFI for the infrastructure for the ‘Next Generation Mission Critical Voice Radio System’ closed. E-COMM received RFI responses from numerous possible vendors for the provision of the radio system infrastructure and related services. The technologies proposed were P25 Phase 1, P25 Phase 2, and TETRA – a European solution. The RFI also solicited feedback on the preliminary functional and technical specifications in order to ascertain what the market could realistically provide.
Stage 2: Request for Qualifications
Following assessment of the RFI information, E-COMM determined that P25 technology in the 700 MHz band (both Phase 1 and Phase 2 variants) would be utilized. They then embarked on a Request for Qualifications process to identify suitably qualified vendors and to develop a refined set of technical specifications that would align E-COMM’s operational and technical requirements with the marketplace’s ability to satisfy the requirements in a competitive environment. The focus of the technical specifications was fourfold: performance, functionality, scalability and resiliency.
The RFQ, which made it clear that prior participation in the RFI was not a requirement for participating in the RFQ, was posted to BC Bid on March 28, 2013 and specified a set closing date and time of May 23, 2013. Likely partially attributable to the robust market research conducted during the RFI phase, no extension to the closing time was provided or requested, and five responses were received. The stated purpose of the RFQ process was “to eventually identify a respondent(s) to enter into a non-exclusive contract(s) for supply of 700 MHz, P25 trunked land mobile radio (LMR) infrastructure equipment and associated services.”
The RFQ included express language cautioning respondents that they were fully responsible for all costs and expenses related to the RFQ including preparing and submitting a response, attending interviewed or meetings with E-COMM during the evaluation of the response, site tours, and negotiation, finalization and execution of any contract. E-COMM reserved the express right to cancel, suspend or terminate the RFQ process at any time for any reason.
Specifically, the RFQ process objectives were twofold:
- To develop a shortlist of vendors interested in and capable of competing for the opportunity, based on the initial set of technical specifications which were subject to final approval by the NGRP Working Group and User Committee, and
- To gather additional information to assist with further refining the technical specifications for inclusion in the subsequent RFP for infrastructure equipment.
As this RFQ was not designed for the purpose of significant vendor screening or shortlisting, it included only very basic mandatory requirements for moving to the RFP stage, as follows:
- Ability to supply a complete 700 MHz P25 network with the necessary capacity and scale
- Received by closing time at specified location; and
- Must sign response, and sign and return with response the Acceptance of T&Cs for RFQ.
The RFQ responses were reviewed by the Evaluation Committee following the specified closing date. All respondents that submitted a response to the RFQ met these mandatory requirements.
Appendix C to the RFQ included 66 pages of optional and mandatory technical specifications that the infrastructure equipment should comply with (the Technical Specifications). These specifications were based on the preliminary research done by E-COMM and they fully expected to refine these specifications before the RFP. Respondents were advised they would be disqualified if they could not meet the mandatory specifications but would not be disqualified if they could not meet the optional specifications. Respondents were strongly encouraged to provide detailed comments for any optional specifications to which their equipment was not fully compliant, to enable E-COMM to assess the market’s ability to meet the preliminary specifications.
E-COMM reserved the right to independently validate the information in the RFQ responses through reference checks, site visits, testing, or by any other means they deemed appropriate. This was done at a cursory level during the RFQ and at a much more rigorous level during the RFP.
Following evaluation of the RFQ submissions, ECOMM held separate meetings with each respondent, including the respondent that indicated non-compliance with the mandatory requirements, with a view to finalizing the technical specifications. In particular, there were questions to vendors who indicated that their equipment only partially met, or did not meet, the technical specifications, with a view to ascertaining whether each specification was critical and capable of being supported by the marketplace.
The Evaluation Team members conducting these discussions on behalf of E-COMM were acutely aware of the critical importance of transparency, fairness and confidentiality during these discussions. There could be no bias, or perception of bias, and no cross-contamination of ideas and technical solutions during discussions with other RFQ vendors. Each meeting followed a similar structure, and vendors were provided with the list of questions in advance. Not all questions to all vendors were identical, given the different responses to compliance with the technical specifications. Care was taken to ensure that the discussions focused solely on the specific vendor’s response to the RFQ and subsequent clarifications. There were no discussions unrelated to the response under consideration, and the importance of the single point of contact for any general RFQ or other procurement related enquiries was reinforced. The Fairness Auditor’s report confirmed that all team members conducted themselves in a fully professional manner, with no favoritism or bias.
Following these meetings, the Evaluation Committee worked with the NGRP Working Group and User Committee to revise, refine and distill the partial and non-compliance issues in order to arrive at the broadest set of technical specifications possible while still meeting the operational needs of the NGRP. Following Internal Steering Committee and User Group approvals, this information was then used to develop Revised Technical Specifications which formed part of the subsequent RFP and final contract with the successful vendor.
Step 3: Request for Proposals
The RFP was issued May 22, 2014 to the RFQ respondents who had met the RFQ mandatory requirements. A mandatory proponents’ meeting was held via WebEx to discuss the objectives of the RFP. The RFP clearly identified the Authorized Contact for questions prior to closing and prohibited any other contact throughout the process. Proposal responses were to be physically delivered to the stated address by July 3, 2014. A term of the RFP was that proposals remain open for acceptance for 270 days from closing. Fax or email submissions would only be accepted with express consent and in advance of closing, for unusual circumstances such as unavoidable delays in physical delivery.
Under RFP Purpose and Objectives, E-COMM listed six high-level success measures for the radio system, under the headings: Communications Effectiveness; Interoperability and Compatibility; Radio Frequency Coverage Performance; System Reliability; and Security and Technology Sustainability.
The RFP contained a number of appendices:
- Receipt Confirmation Form (required)
- Acceptance of Terms and Conditions of the RFP (required)
- Technical Specifications
- Reference Documentation (obtained upon submission of executed Confidentiality Agreement)
- Proposal Evaluation Process and Criteria
- Mandatory Terms and Conditions for Any Resultant Contract
- Acceptance of Mandatory Terms and Conditions for Any Resultant Contract (required)
- E-COMM Form of Contract
- Acceptance of E-COMM Form of Contract (requested)
- Acceptance Tests and Payment Milestones (specifics to be negotiated with preferred proponent)
- Technical Specifications Compliance Response Workbook and Financial Evaluated Bid Price Workbook
- Confidentiality Agreement (required to obtain Reference Documentation)
As noted above, acceptance of E-COMM’s Form of Contract was not a mandatory requirement; however, the RFP made it clear that it was E-COMM’s preference to use that Form of Contract. Proposals not submitting such acceptance would still be evaluated but with “a negative impact on the evaluation of the Proponent’s proposal” and the parties were to negotiate in good faith, using the Form of Contract “generally as a template”. All four of the proponents were deemed to be compliant with the RFP requirements, and all compliant proponents agreed to the included terms and conditions in the proposed Form of Contract attached as an appendix to the RFP.
The RFP stated that all information pertaining to E-COMM and the project obtained by proponents as a result of participating in the RFP was confidential and not to be disclosed or copied for any other purpose than responding to the RFP. In addition, E-COMM prepared separate ‘Reference Documentation’ which was necessary for proponents to have, in order to submit a proposal. Because E-COMM determined that it was necessary to protect the confidentiality of the Reference Documentation in particular, proponents had to complete and submit a Confidentiality Agreement “as soon as possible after the RFP Issue Date” in order to receive the Reference Documentation.
In the RFP, E-COMM reserved a broad array of rights and privileges, including:
- The right to disqualify a proposal for conflict of interest;
- The right to waive non-compliance;
- The right to cancel, terminate or suspend the RFP at any time for any reason;
- The right to verify submitted proposal information and conduct due diligence checks related to security and financial capabilities;
- The right to negotiate modifications or variations to the goods and services set out in a proposal in order to satisfy operational or administrative requirements;
- Anticipated sequential negotiation starting with preferred proponent and reserving the right to cancel or negotiate with another proponent in the event negotiations with the frontrunner were not successful (alternatively, E-COMM reserved the right to conduct concurrent negotiations, at their discretion);
- If unable to conclude a contract with a proponent, E-COMM specifically reserved the right to terminate the RFP and negotiate directly with a non-participating vendor.
The RFP clearly stated that responses from the preferred proponent would be used to develop a Conformed Technical Specification that would form part of a final contract with the proponent, and that final approvals required by E-COMM, including the E-COMM Board, were conditions precedent to the execution of a contract.
Proponent presentations were held following the RFP closing for purposes of clarification of proposal information. Each proponent was provided in advance with a unique set of clarifying questions, submitted written responses to the clarifying questions by email, and then met individually with the Evaluation Committee for the purposes of presenting and further clarifying their response.
Proposal Evaluation Process
The evaluation process was clearly outlined in the RFP appendix, and consisted of three distinct phases: screening for compliance with the very few mandatory submission requirements; compliance with the mandatory technical specifications; evaluation of responses to the optional technical specifications; and evaluation of the Evaluated Bid Price workbook. Of particular emphasis for price evaluation was cost of the ongoing support, operation and maintenance for this new technology.
Compliance with Technical Specifications
A particularly challenging aspect for the Evaluation Committee, comprised of four E-COMM employees and one external technical advisor, was verifying compliance with the mandatory technical specifications for each proponent. Given the significant evaluation consequences of declaring one’s equipment non-compliant, E-COMM was well aware that proponents would all attest to compliance of their own solution. For example, one mandatory technical requirement was that “there cannot be a single point of failure in the architecture of the system”. Significant time and energy was spent on due diligence and compliance verification through extensive written questions and answers exchanged with the proponents. There was also a process for rating compliance with the optional technical specifications.
Evaluated Bid Price
As noted, an Evaluated Bid Price Workbook was included as an appendix to the RFP, to be completed and submitted by proponents. The Workbook listed items and quantities of Equipment and Services to be priced by proponents, along with a reference to the Technical Specification where the item’s capability requirements were specified. Proponents were instructed to provide the lowest level of granularity of Equipment and Services components for pricing. The RFP was clear that the proponent pricing in the EBP Workbook was to be used solely for evaluation purposes and that the final quantity and Equipment to be purchased would be negotiated with the preferred proponent prior to the execution of the contract. There was, however, a requirement for traceability back to the proposal pricing.
The price evaluation was very quantitative in nature. Not only were points allocated for pricing related to the mandatory and some of the rated technical specifications, but a life cycle cost adjustment was applied to each proponent’s price score solely for the purpose of evaluation. This Life Cycle cost analysis, overlaid onto the acquisition cost, was included to account for different costing among the proposals for things such as equipment performance, power and space usage. The total Evaluated Bid Price was determined by adding the proponent’s total bid price to the total life cycle cost adjustments. Using this methodology meant that the proposal with the lowest up front acquisition costs would not necessarily receive the overall highest score for pricing.
The combined scores from the technical and financial components of the evaluation process were tabulated and the highest scoring proponent was selected as the preferred proponent to negotiate the final contract details with E-COMM.
Despite the extremely complex nature of this procurement and the need for a multi-stage iterative process for distilling and refining the technical specifications, this procurement process was clearly conducted within the Contract A paradigm. The extensive privilege clauses gave E-COMM significant latitude to cancel or otherwise adapt the process as it unfolded, however the intent was clearly to stay within the traditional legal paradigm for procurement in Canada. The early RFI and other market exploration and assessment steps, coupled with locking down user buy-in to the new technology before formally approaching the market, were keys to success for this significant, important and highly politically sensitive procurement project. Fairness advisors and other external expert consultants engaged throughout helped to keep the process on track, to develop the Procurement Strategy Management Plan and RFP provisions, to demonstrate transparency and ensure that the infrastructure equipment ultimately selected was the best possible technical solution for the Next Generation Radio Program.
The parallel procurement process for subscriber equipment and related services was successfully concluded with the execution of Master Standing Offers with the three leading proponents from that process.
Nearly five years after initiation of this massive procurement project, the first RCMP radios went live on the new P25 system April 4, 2017. Acceptance testing milestones and payment milestones in the contract with Motorola Solutions Canada, the successful proponent for the infrastructure equipment, will coincide with the gradual rollout to the rest of the users over a year-long period. All proponents were successfully debriefed after contract award, and the NGRP Working Group will continue to meet monthly until all user agencies are up and seamlessly operating on the new system.
NECI extends many thanks to Mike Webb, P.Eng., Vice President, Technology Services at E-COMM for his help with this article. www.ecomm911.ca
Readers are cautioned not to rely upon this article as legal advice nor as an exhaustive discussion of the topic or case. For any particular legal problem, seek advice directly from your lawyer or in-house counsel. All dates, contact information and website addresses were current at the time of original publication.