District of Houston municipal office and council chambers.

IT service contract discussion at Houston council

Long standing relationships with contractors versus public dollars

On Sept. 19, 2017 District of Houston staff requested that council consider to waive the compliance of seeking two competitive quotes, required by the Purchasing &Tendering Policy, for the IT service contract so that the current IT services contractor from Smithers, Done Right Computers, can be awarded the contract directly.

The contract would be valid from Jan. 15, 2018 to Dec. 31, 2020 in the amount of $33,600 plus applicable sales taxes for the entire term of the agreement.

“We asked for the contractor for a retrieval contract [as the current contract has expired] given the nature of the IT services and that this person has access to a lot of our systems so a level of trust is there between the District of Houston and the consultant,” said Gerald Pinchbeck, Corporate Service Officer for the District of Houston.

Counsellor Rick Lundrigan said, “I am uncomfortable going against policy. I understand the merit behind it. But do we not have any local IT services, are IT services generally bonded?”

A bond is a form of contract security which is used to guarantee the performance of services. It can come in either the form of a builder’s lien/hold back or a performance bond equal to a percentage of the total contract value. These must be advertised to the vendor prior to concluding a contract and cannot be imposed after the fact.

“We did not investigate as to whether there are local IT service providers,” said Pinchbeck. “As I said, this was a sole source proposal from Done Right Computers.”

“As to whether or not the IT services are bonded, the current contract was not a bonded contract and was not included in this proposal,” said Pinchbeck. “I do not have any information on whether we require bonding in the past for these services.”

“Generally this is supposed to be tendered out, so when we waive a section of our policy without tendering, do we have any sort of risk matrix that can justify a certain level of legal agreement?” asked counsellor Jonathan Van Barneveld.

“Our behind the scene management procedure is to first have the contract initially negotiated by the manager responsible for that contract and then the third party provider. It then gets dispatched to myself and our director of finance who then review the contract and check off any liabilities that may incur from that contract. After that we proceed to the Chief Administrative Officer who decides how to proceed from there,” said Pinchbeck.

He added that with a contract under $25,000 the District of Houston’s normal procuring practice is to seek two vocations from qualified vendors.

“So the contract that the [District of Houston] is currently operating under, was that tendered?” asked counsellor Van Barneveld.

“It was a sole source contract,” said Pinchbeck. He confirmed that the IT service contract has not been tendered out for the past two contracts.

Counsellor Lundrigan asked, “At the end of the day, what measure do we have that we are getting the best bang for our buck?”

“It’s the relation we have built with the contractor over the four years now that we have worked with them,” said Pinchbeck.

He added that the contractor has been “very responsive to our requests, he is timely in ensuring that our requests are managed and handled, whether that is errors in a recent changed password, or our server shuts down and the [Houston Leisure Facility] looses access to ActiveNet.”

Pinchbeck said that the contractor has been lenient in providing the district with background research as to the costs of what it could take to procure software and computer hardware, and has not billed the district for that extra background research.

Lundrigan raised the question of whether that is measurable because the contract has not been tendered out for two years and there is no competitive comparison.

Counsellor Van Barneveld recommended that since the contract is not effective until January 2018 that there should be still some time for extra quotes be sought out because the financing of the contract is municipal public dollars.

“Is it possible to have this contract for one year instead of three?” asked counsellor John Siebenga.

“I would have to discuss that with the contractor,” said Pinchbeck.

The recommendation was motioned to be table the resolution until the next meeting on Oct. 3, 2017.

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