The Municipal Services Committee met 01/22/2024. One of the items they spent a fair amount of time discussing was the request to approve the 2024 sole source purchase requests related to various traffic equipment and technologies.
Per the staff memo, “it is common in the traffic industry that complete traffic signal control assemblies are sole-source purchased as complete, functional systems. Another unfortunate reality is that each manufacturer’s equipment has its own proprietary firmware and controls, which makes it nearly impossible to competitively procure comparable equipment.”
Additionally, for areas of the city with specific stylistic design standards for street lights, the city needed to purchase items from specific manufacturers in order to maintain uniformity and quality.
The committee discussed with staff the economic reality of the traffic and street lighting world. There had been a lot of merging of companies. That, combined with the city’s need for traffic controllers to interoperate with the city’s centralized control software meant that there were not many options to acquire equipment.
After receiving assurances that staff was seeking the lowest cost options within the many limitations caused by proprietary software and monopolistic business practices, the committee voted unanimously to approve the 2024 sole source requests.
I’ve prepared a transcript of the discussion for download:
During the course of the discussion, Traffic Engineer Eric Lom noted that the city had somewhat exclusively used TAPCO as the distributor for many of its electronics and signal control needs over the years, but they were now in the process of evaluating moving away from them. Back in August of 2023, the city had applied for $220,750 in grant funds to cover the replacement of 21 existing traffic signal computers/controllers and software along Wis DOT connecting highways through Appleton. The existing technology has been provided by Siemens for the last 30 years, but the city’s experience with Siemens has degraded and continues to degrade, so the city hopes to transition away from them which would also include transitioning away from TAPCO.
The city does also buy some things through the state contract. Essentially, the state negotiates prices with distributors to get a lower price than individual municipalities can get through the bidding process and then the city is able to purchase through that state contract and enjoy a lower price on some items. Traffic Engineer Lom specifically mentioned using that state contract to purchase non-decorative streetlights as well as the red, yellow, and green LED modules for traffic signals. Additionally, if a specific brand happened to be a part of the state purchasing contract for a given year, then the city would purchase necessary items through the state contract, but if the brand the city needed was not part of the state contract then they would not purchase through the state.
Alderperson Katie Van Zeeland (District 5) asked specifically about the section of the memo that indicated the city used Cooper and Philips products for LED streetlight fixtures. “To comply with the City’s purchasing policy, we would have to competitively bid these two brands thru the electrical supply chains. While this would give the appearance of competitive bidding, it would actually amount to a mark-up on the product. Based on this, we feel sole source offers the best value of the City’s time and resources.”
She wanted to know more details about that. Traffic Engineer Lom said that the parts were distributed by both Cooper and Philips, but those companies both purchased the parts from the same manufacturer who would give them each the same price, so a bidding process would inherently not be competitive.
At the end of the discussion, Mr. Lom confirmed for the committee that city staff was always looking for lower costs on items. “Our budget is modest, and for every dollar that we can save by getting something off the state contract or by being able to do competitive pricing, we’re always extremely interested in doing it because it allows us to do more with the same amount of money.”
The committee voted unanimously to approve the sole source requests.
View full meeting details and video here: https://cityofappleton.legistar.com/MeetingDetail.aspx?ID=1165750&GUID=4CD762FF-D906-433A-B89D-312DA9CAA01C
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