One Gateway Plaza

Los Angeles, CA 90012-2952

213.922.2ooo Tel
metro. net
55
EXECUTIVE MANAGEMENT COMMITTEE
FEBRUARY 21, 2013
SUBJECT: UNDERGROUND CELL PHONE AND DATA SERVICES PROVIDER
ACTION: APPROVE CONTRACT AWARD
RECOMMENDATION
Authorize the Chief Executive Officer to award a 20-year revenue-generating contract to
lnSite Wireless, LLC the highest-rated, responsive and responsible proposer to act as
Neutral Host Provider for the Underground Cell Phone and Data Services Provider for a
total minimum annual revenue guarantee of $360,000. This amount is subject to a 3%
annual escalation.
ISSUE
The Board requested staff provide a plan to provide cell phone service at all Metro Rail
stations and tunnels. The request stipulated that the service should be provided at no
cost to Metro. Wi-Fi service is also included under this contract.
DISCUSSION
Staff has performed investigations and interviews of other transit properties including
Bay Area Rapid Transit, Boston Metropolitan Transportation Authority, Washington
D.C., and Amtrak. On the basis of our investigation, Metro concluded that the transit
ridership experience is significantly enhanced and overall personnel and business
productivity has increased when patrons have cell phone and Wi-Fi access. In addition,
Amtrak reports a 2% increase in ridership since this type of service was installed on
their passenger trains.
New Revenues to LACMT A
This project, as demonstrated by the experiences of other transit properties, is likely to
be a new source of revenue to LACMTA. BART has reported that over $2,000,000 per
year in revenue is produced by having cell phone and data services available within
their stations and underground right-of-way.
A fair and reasonable revenue sharing agreement will be finalized to provide the best
possible financial outcome for the agency over a 20-year period. An outside financial
consultant has been retained for assistance in the analysis of all proposed revenue-
sharing plans. Revenue to Metro would begin during the initial installation and
implementation period and would increase as the underground cell phone system
matures and the number of cell phone and data users on the Metro system increases.
DETERMINATION OF SAFETY IMPACT
Providing cell phone service to Metro patrons will enhance response-time during
emergencies. It will also provide Metro patrons with more confidence regarding their
safety during an emergency on board Metro Rail Trains and Stations Platforms.
FINANCIAL IMPACT
The total labor costs are estimated at $800,000 over 24-months, the costs to Metro will
be reimbursed by the bidder when first cell carrier commences use of the lnSite
Wireless system. Funding of $66,666 will be absorbed in the FY13 budget in cost
centers 3920 Wayside Systems, 3922 Rail Communications, 3924 Wayside Systems
Facility Maintenance and 3928 Wayside Systems Traction Power, item number 50151
ATU Mechanic Normal Time, project 300044, Rail Operations - Red Line. Metro is
negotiating with the proposer to establish a fixed price for Metro support.
Revenue is expected to be collected after the two-year installation is complete, and
upon receiving a commitment from a service provider. The total minimum annual
revenue guarantee is $360,000, subject to 3% escalation.
Impact to Budget
The revenues earned from this contract will be eligible for any Metro operating or capital
use. The revenue from this project will be recognized as Miscellaneous Funds -
Enterprise Funds Rail.
ALTERNATIVES CONSIDERED
The alternative of not providing cell phone/Wi-Fi was considered, and was summarily
rejected due to the following considerations:
Enhanced public safety on Metro Rail Trains and Station Platforms through
availability of placing of a cell phone call in times of distress and emergency to
the appropriate responsible agency,
Potential for increased public ridership on Metro Rail due to the ability to work via
wireless phone and data connections while riding,
Potential for less impact to the environment if the public ridership is increased by
installation of cell phone and data networks,
Underground Cell Phone and Data Services Provider Page2
Other properties have working cell phone and data systems within their
underground rail systems,
Revenue Enhancement for Metro's Overall Budget
NEXT STEPS
Staff will issue a Notice to Proceed to lnSite Wireless, LLC for work to commence. The
implementation of the underground cell phone and data system will take two (2) years.
ATTACHMENT
A. Procurement Summary
Prepared by:
Questions:
Robert Fischer, Systems Project Manager
Daniel Lindstrom, Wayside Systems Manager
Michelle Stewart, Assistant Administrative Analyst
(213) 922-7270
Underground Cell Phone and Data Services Provider Page3
~ ~ l t ~ ~
Michelle Lopes Cal ell
Chief Administ tive Services Officer
/
F r a ~ Alejandro
Ch{ef Operations Officer
Arthur T. Leahy
Chief Executive Officer
ATTACHMENT A
PROCUREMENT SUMMARY
UNDERGROUND CELL PHONE AND DATA SERVICES PROVIDER
1. Contract Number: PS39222852
2. Recommended Vendor: lnSite Wireless, LLC
3. Type of Procurement (check one): D IFB [8] RFP D RFP-A&E
D Non-Competitive D Modification D Task Order
4. Procurement Dates:
A. Issued: 12/22/11
B. Advertised/Publicized: 12/22/11
C. Pre-proposal/Pre-Bid Conference: 01/09/12
D. Proposals/Bids Due: 7/20/12
E. Pre-Qualification Completed: 03/08/12
F. Conflict of Interest Form Submitted to Ethics: 01/31/13
G. Protest Period End Date: 03/04/13
5. Picked Bids/Proposals Received: 3
28
6. Contract Administrator: Telephone Number:
Kenneth Takahashi (213) 922-1047
7. Project Manager: Telephone Number:
Duane Martin (213) 922-7460
A. Procurement Background
This Board Action is to award a revenue producing contract to lnSite Wireless, LLC to
provide Underground Cell Phone and Data Services for Metro facilities. lnSite
Wireless is the highest rated, responsive and responsible proposer and offers the
highest guaranteed revenue.
The RFP was issued in accordance with Metro's Acquisition Policy and the contract is
a revenue type.
Four amendments were issued during the solicitation phase of this RFP:
Amendment No. 1 was issued on January 20, 2012 to provide clarification
concerning submittal requirements, specifications, and extended the proposal
due date to February 24, 2012.
Amendment No.2 was issued on January 31, 2012 to provide further
clarification on specifications.
Amendment No. 3 was issued on February 8, 2012 to clarify issues related to
the rail facilities.
Amendment No. 4 was issued to provide further clarification on facilities and
submittal requirements.
Underground Cell Phone and Data Services Provider Page 5
B. Evaluation of Proposals/Bids
A total of three (3) proposers responded to this solicitation. A Selection Committee
consisting of staff from Rail Communications, Systems Engineering, and Transit
Operations, Executive Office was convened and conducted a comprehensive
technical evaluation of the proposals received.
An outside financial consultant was also retained to review the revenue proposals,
including the financial realism of the proposed revenue amounts.
The proposals were evaluated based on the following evaluation criteria and
weights:
Proposer's Skills, Experience and Past Performance
Project Plan/Understanding of LACMTA's Requirements
Revenue Generation/Realism
35 points
35 points
30 points
The evaluation criteria are appropriate and consistent with criteria developed for
other, similar procurements. Several factors were considered when developing
these weights, giving the greatest importance to the technical capabilities of the
firms.
The Selection Committee reviewed each proposal in accordance with the stated
evaluation criteria. Each proposal addressed and met the minimum requirements of
the RFP and demonstrated experience with all aspects of the required tasks. In
addition, each proposer stressed their commitment to the success of the project.
Also reviewed were staffing plans, work plans, and perceived project issues.
The firms were all deemed within the competitive range and are listed below in
alphabetical order.
1 . Broadcast Australia Pty Ltd
2. Crown Castle Solutions Corp.
3. lnSite Wireless, LLC
All proposers took exception to Metro's standard contract template as being
inappropriate for this type of revenue contract. After review and discussions between
project management, procurement, and legal counsel, it was decided to seek Best
and Final Offer (BAFO) submittals based upon an industry-standard contract format.
BAFO proposals were submitted and evaluated according to the evaluation criteria.
Underground Cell Phone and Data Services Provider Page 6
Qualifications Summary of Firms:
Broadcast Australia Pty Limited (BAll
BAI through Transit Wireless, a New York registered BAI company, is currently
rolling out cellular and Wi-Fi communications within the 277 New York underground
subway system. BAI also is providing exclusive Wi-Fi service to the Bay Area Rapid
Transit ridership.
Crown Castle Solutions Corp. (Crown Castle)
Crown Castle has provided to the Washington Metropolitan Area Transit Authority
0JVMATA) upgrades and installation to the 800 MHz Bi-directional Amplifiers used in
the WMATA subway system. They have also provided wireless access to major
carriers on the Chicago Transit Authority subway.
lnSite Wireless LLC (lnSite)
lnSite has provided a neutral host Distributed Antenna System (DAS) in the 35
underground stations and connecting tunnels of the Massachusetts Bay
Transportation Authority. lnSite has also provided DAS services for the Moscone
Center in San Francisco and Target Field in Minneapolis.
Best and Final Offer Process
In preparation of a Best and Final Offer process, each proposer was requested to
submit sample contracts that existed with their current partners. Legal counsel
along with other staff reviewed the submitted samples and developed an industry-
based contract to be used in a Best and Final Offer (BAFO) process.
After revising the form of contract, the Request for BAFO was transmitted on
December 3, 2012 to the three firms. The BAFO requested updated revenue
proposals utilizing the new contract format that was developed. The new contract
format included terms covering licensing, sub-licensing of carriers, non-interference
with Metro operations, and reimbursement for Metro personnel costs related to the
project
On January 10, 2013, the BAFO responses were received. Staff reviewed each of
the three BAFO responses and performed a re-evaluation. The BAFO submittals
were also sent to the financial consultant for analysis and realism reviews.
The financial consultant summarized, evaluated, and assigned a realism factor to
each of the BAFO proposals:
Underground Cell Phone and Data Services Provider Page 7
BAI
BAI proposed minimum annual guarantee payments of $100,000 or an annual
payment of $64,800 per participating carrier. They did not propose any revenue
sharing.
Crown Castle
Crown Castle proposed, but also conditioned their proposal on negotiations of a
mutually acceptable final agreement, minimum annual guarantee payments of
$300,000, plus a 3% annual escalation. They also proposed a 25% share of the
gross revenues received from the participating carriers. Payments to Metro would
be based upon the higher of the minimum annual guarantee or the share of revenue.
In Site
lnSite proposed minimum annual guarantee payments of $360,000, plus a 3%
annual escalation. They also proposed a 53% share of the net revenues received
form the participating carriers (which excludes revenues to recover operating costs).
Payments to Metro would be based upon the higher of the minimum annual
guarantee or the share of revenue.
The tables below summarize the BAFO results:
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Proposer Rankings
Average
1 FIRM Score Rank
2 BAI
Proposer's Skills, Experience and Past
3 Performance 26.00
Project Plan/Understanding of LACMTA's
4 Requirements 25.50
5 Revenue Generation 3.19
6 Total 54.69 3
7 Crown Castle
Proposer's Skills, Experience and Past
8 Performance 28.50
Project Plan/Understanding of LACMTA's
9 Requirements 31.00
10 Revenue Generation 13.50
11 Total 73.00 2
12 lnSite Wireless
Proposer's Skills, Experience and Past
13 Performance 29.50
Project Plan/Understanding of LACMTA's
14 Requirements 29.50
15 Revenue Generation 16.55
16 Total 75.55 1
C. Cost/Price Analysis
The recommended price has been determined to be fair and reasonable based upon
revenue generation analysis performed by the financial consultant, price analysis,
and reference checks.
Underground Cell Phone and Data Services Provider Page 9
Minimum Annual Guarantee Amounts
Proposer Name Minimum Annual Guarantee Amount
1 Broadcast Australia Pty $100,000 or $64,800 per participating
Ltd carrier
2 Crown Castle Solutions $300,000
Corp
3 lnSite Wireless, LLC $360,000
As confirmed by reference checking, the minimum annual guarantee amounts
proposed in the BAFO process are determined to be a good indicator of the
revenues to be actually realized. Projected revenue sharing amounts were
considered less reliable.
Revenue projections for each proposer were reviewed by an outside consultant to
determine the reasonableness of each proposal. The consultant determined that the
revenue projections for both Broadcast Australia Pty, Ltd. and lnSite Wireless were
highly attainable and represented minimal risk to the Agency. The consultant
determined that the proposal from Crown Castle Solutions represented greater risk
because the proposed revenue amounts were not based upon experience with the
carriers but were based upon how much revenue it would take to justify their
investment.
D. Background on Recommended Contractor
The recommended firm, lnSite Wireless, LLC located in Alexandria, Virginia has
been in business for over twelve years and is a leader in the development,
ownership, and operation of wireless communication infrastructure facilities. They
have performed similar work for the Massachusetts Bay Transit Authority (Boston)
for their system.
E. Small Business Participation
The Diversity and Economic Opportunity Department (DEOD) did not recommend a
goal for this revenue generating contract.
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