REPORT TO THE CITY COUNCIL FROM: GREGORY A. BARFIELD, M.A., Interim Director Department of Transportation THROUGH: CAROLINA ILIC, AICP, Assistant Director Department of Transportation BY: SUSAN ROGERS, IS Supervisor Information Services Department/ FAX IS Division SUBJECT ..Title Actions related to the award of a Maintenance Agreement with DILAX Systems US Inc., in the amount of $228,855.00: 1. Affirm the City Manager's determination that DILAX Systems, Inc., is uniquely qualified to perform maintenance services for the Department of Transportation, FAX Division, on the Automatic Passenger Counter system (APC). 2. Affirm the City Manager's determination that DILAX Systems, Inc., is uniquely capable as defined by the Federal Transit Administration for sole source non-competitive procurements, to perform software maintenance services for the Department of Transportation. 3. Award a three (3) year contract with two (2) 1-year optional extensions for an Annual Hardware and Software Maintenance Agreement as part of the Automatic Passenger Counters (APC) Project to DILAX Systems US Inc., in the amount of $228,855.00. 4. Authorize the Director of Transportation or designee to execute all related documents. ..Body RECOMMENDATION Staff recommends Council affirm the City Manager's determination that DILAX Systems US Inc., (DILAX) is uniquely qualified and uniquely capable to perform maintenance on existing DILAX software products, authorize the Director of Transportation/Fresno Area Express (FAX) or designee, to execute all related documents, and award a services agreement with DILAX in the amount of $228,855.00 as part of the Automatic Passenger Counter (APC) Project for the Department of Transportation. This contract is for a three-year period with two 1-year optional extensions. EXECUTIVE SUMMARY Fresno Area Express (FAX) has maintained an annual hardware and software maintenance agreement with DILAX since 2011. The annual maintenance agreement currently in place on 123 transit buses across the Transportation Department provides access to security fixes, updates, service and feature releases, and new software versions as they are released. The current maintenance agreement expired on July 31, 2023. Without an active agreement, the City of Fresno Information Services Department (ISD) and FAX Information Services (IS) staff would not have access to these security fixes, updates, and new version releases. Additionally, if an issue arises, FAX will have to pay additional fees for technical assistance. BACKGROUND In July 2011, through the City of Fresno bidding process Bid File 9620, the Department of Transportation/FAX awarded a state-of-the-art Automatic Passenger Counter (APC) system to DILAX This technology enabled FAX to automate passenger counts and enhance data collection required for the National Transit Database (NTD) reporting, as required by the Federal Transit Administration (FTA). NTD also certified FAX's APC system. The DILAX technology, which FAX utilizes in the APC applications, is proprietary and only accessible to its original vendor, DILAX. To continue to receive support for its APC applications, FAX seeks to enter into a hardware and software maintenance service agreement with DILAX. The resulting action is defined by the FTA as a sole source non-competitive procurement. This finding is supported by DILAX's unique capability to service the proprietary software through restricted data rights and patents. An award to any other source would result in substantial duplication of cost to FAX that could not be expected to be recovered through competition. FAX seeks to enter into a hardware and software maintenance service agreement for three (3) years, with two 1-year optional extensions. This maintenance service agreement is integral for maintaining hardware and software integrity and can only be sole-sourced from the manufacturer of the hardware and software. FAX is seeking to enter into an annual maintenance service agreement with DILAX through a sole-source procurement. The FTA requires that when "other than full and open competition" is used, the City shall provide a sole source justification for that purchase. Chapter VI, page 18 of FTA C 4220.1F stipulates two criteria that a sole source must meet to justify a sole source procurement: (1) the vendor or product must have "unique capability or availability," or (2) the procurement must be the result of a "single bid or proposal". Due to the manufacturer's restrictive data rights, FAX finds that DILAX is both uniquely qualified and uniquely capable, therefore meeting the FTA's definition of a sole source procurement. In July 2011, City Council approved a sole-source product purchase contract with DILAX for the purchase of APC equipment, along with a one-year hardware and software maintenance agreement. Since then, multiple maintenance agreements have been approved. The annual maintenance agreement currently in place on 123 transit buses across the Transportation Department provides access to security fixes, updates, service and feature releases, and new software versions as they are released. The current maintenance agreement expired on July 31, 2023. Without an active agreement in place, City of Fresno/ISD and FAX IS staff would not have access to these security fixes, updates, and new version releases, and FAX would have to pay additional fees for technical assistance. ENVIRONMENTAL FINDINGS By the definition provided in the California Environmental Quality Act Guidelines Section 15378, the award of this contract is exempt from the California Environmental Quality Act requirements. LOCAL PREFERENCE The City's Local Preference Ordinance (FMC 4-108) was not applied because this is a sole source agreement. FISCAL IMPACT There is no fiscal impact to the General Fund from this request. This purchase is funded by FTA funds and capital funding appropriated in the Department's FY24 capital budget. Attachments: Uniquely Qualified Memorandum to the City Manager Service Contract