Toronto opens bidding for desktop replacement contract

The City of Toronto is currently considering bids from IT suppliers to replace the computers that caused a public scandal as a result of a leasing arrangement gone wrong.

The city and Mississauga, Ont.-based MFP Financial Services

came under scrutiny when it was determined that the city had paid almost twice the original budget of $43 million for the leased computers. A public inquiry, which began in December 2002, is scheduled to resume next month.

In March, the city issued a report recommending that it not pay more than $83.5 million to replace these machines. An estimated $20.44 million of that has been earmarked to pay for the remainder of the MFP leases.

According to the report, the city will replace approximately 15,400 desktop computers and 570 servers, and move from a Microsoft NT operating system environment to Microsoft XP. Also slated are upgraded productivity tools (such as an MS Office suite), the development of an integrated asset management system, and related services to install and oversee the migration.

The city posted an RFP (request for proposal) on its Web site on July 13 with a deadline for questions on July 23 and a closing date of July 28. A site meeting was conducted Tuesday in Toronto’s Metro Hall to evaluate the situation so far.

The leasing agreement with MFP is scheduled to terminate on March 31, 2005. According to John Davies, executive director of corporate information and technology, Toronto aims to get council approval for the transition in September and is planning on for a rollout towards the end of this year, assuming that a contract is in place soon.

Bids from resellers, vendors and integrators will be considered, he said, and the city will move from a leasing model to ownership of the technology.

Davies wasn’t around when the leasing agreement with MFP was struck (he started in March) but said, “”I think the feeling is that the city culture here is more supportive of ownership than leasing. I think that’s as simple as that. I think the past experience of leasing . . . was that the city preferred to buy its own equipment.””

The city requires the upgrade not only because its lease term with MFP is nearing conclusion but because of the age of those machines and the fact that Microsoft will no longer support NT operating systems beyond 2004. “”The equipment’s fairly old by PC standards. Most of the equipment is five years old already,”” said Davies.

In July 2003, the Commission Counsel for the Toronto Computer Leasing Inquiry retained Assetlinx Corp. to prepare a report outlining the city’s options. Assetlinx concluded that most of the leased assets were past their useful lifecycle and identified a risk associated with running city systems on outdated equipment.

Davies said that there have not been any significant problems to date with the city’s IT. “”We were mindful of running technology that no longer has official support. There are some risks associated with that (but) we have not had any problems,”” he said.

He acknowledged, however, that memory and processor speed is current machines is not sufficient to run current applications at optimum efficiency.

Once a supplier has been selected to provide and install new computers and servers, the city will handle the maintenance and service on the equipment on an ongoing basis, said Davies. There are approximately 325 IT professionals working for the city, not including services like the police and Toronto Transit Commission, which handle their own IT.

In light of the MFP scandal, Howard Grant a principal with Partnering and Procurement Inc., said he was surprised that the government had not taken extra steps to insure that this latest RFP was conducted with more transparency.

Grant was recently called by Madame Justice Denise Bellamy to appear before the Toronto Computer Leasing Inquiry as an expert witness.

The City of Toronto does not use Merx, a government e-tendering service that lists the majority of public sector RFPs in Canada. The current tender is available only on the city’s Web site or on hard copy.

“”When you look at what’s on the Web site, does that give you any indication of the size of (the contract)?”” said Grant. “”If you were the City of Toronto, going through what they have, why would you wouldn’t you post it?””

Grant recommended that the city retain a third party to act as fairness commissioner over this latest RFP. Margaret Dougherty, a spokesperson for the City of Toronto, said the city does not use such a mechanism for any of its RFPs. She said that the city has considered it in the past, but the current RFP is being handled in the same manner as any of the city’s other RFPs, from computers to road salt.

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