Concerns raised over bid process after Las Vegas contract with Switch

The call by Councilwoman Michele Fiore and Mayor Pro Tem Lois Tarkanian to revisit how the city handles requests for proposal came after the council unanimously approved a three-year lease this week to house sensitive city information inside a facility owned by data center company Switch.

The company, headquartered in Las Vegas, will house seven racks of city servers identical to those in City Hall, acting as the back-up for the city’s data storage.

If the city’s facility were to fail, city Information Technology Director Michael Lee Sherwood said “we need to have a secondary location that has the proper power, the proper security to continue our operations in any type of event.”

But the evaluations that led to city staff recommending Switch over eight other applicants drew consternation Wednesday among the two councilwomen over a simple premise: Switch was far from the lowest bidder.

Switch’s proposal of $604,287 over three years was nearly double the lowest bid. Fiore, who co-sponsored a bill as an assemblywoman to address subjective bid ratings, noted how all applicants had met city standards in the request-for-proposal issued in July.

The city underscored that the RFP was advertised as a best-value proposal, not low bid.

Pricing accounted for 30 percent of evaluation criteria, city documents show, with more weight given to 11 areas, including background, infrastructure, power, security, environmental controls, physical site location and facility and monitoring.

Switch was rated first in seven functional areas and second in four others by an internal committee, which consisted of city employees in public safety, finance and IT departments, resulting in an overall score of 0.8791 — five points higher than second-place finisher AT&T’s 0.8213.

Before voting to approve the deal, Fiore acknowledged she was “very conflicted” on the agreement and understood that Betsy Fretwell departed as the city’s top executive in July 2017 to become a senior vice president for Switch.

“Our previous city manager is a very important person with Switch, so I get that. OK? And I believe that Switch is offering us the best service to the city,” she said. “But I have a problem with the optics of the contract.”

In December, when the agreement first came before policymakers, Mayor Carolyn Goodman said the process appeared to have been “very, very thorough.”

Sherwood, the city’s IT director, said the agreement will also act as a cost-savings measure for Las Vegas.

The city now plans to decommission an outdated collocation facility, which may have cost as much as $2.5 million to retrofit, he said, adding that a city effort to match services offered by Switch could have cost up to $10 million.

Contact Shea Johnson at sjohnson@reviewjournal.com or 702-383-0272. Follow @Shea_LVRJ on Twitter.