6h Memo Vessel Moorage System
COMMISSION AGENDA MEMORANDUM Item No. 6h ACTION ITEM Date of Meeting September 22, 2020 DATE: September 15, 2020 TO: Stephen P. Metruck, Executive Director FROM: Kenneth Lyles, Director Maritime Operations and Security Krista Sadler, Director Technology Delivery SUBJECT: Vessel Moorage System (CIP #C800729) Amount of this request: $410,000 Total estimated project cost: $960,000 ACTION REQUESTED Request Commission authorization for the Executive Director to proceed with the Vessel Moorage System project with an additional authorization of $410,000 for a total project cost not to exceed $960,000. EXECUTIVE SUMMARY A project to competitively procure and implement a vessel moorage system to support marina and terminal operations was approved in January 2016 with a total project cost not-to-exceed $550,000. Due to a lack of systems on the market that meet Port of Seattle requirements, two lengthy procurement processes were completed before a vendor was selected. This contract was canceled during implementation when information security concerns could not be resolved. After further research into possible solutions yielded no alternatives, a decision was made in 2020 to develop the system internally for a total development cost of $760,000. This request is for additional authorization of $410,000 to fully fund the development of the new system. Following is a table describing the financial requirement for the new authorization. Original Authorization $550,000 Less: Amount Expensed with Failed Solution -$191,684 Authorized Funds Remaining for New $358,316 Solution Project Cost for Developed Solution $768,316 Additional Authorization for New Solution $410,000 Project Cost less Remaining Funds Total Authorization $960,000 Project Cost plus Amount Expensed The existing system, used by Harbor Services, was deployed in 2009. It no longer meets Port requirements for modern Marina operations, has compatibility issues with newer technology, Template revised January 10, 2019. COMMISSION AGENDA Action Item No. 6h Page 2 of 5 Meeting Date: September 22, 2020 provides little capability for customer self-service, and doesn't support the management of non-leased terminal operations. When this project is complete, the Maritime organization will have a system to manage slip, berth, and storage assignments, calculate billing, process credit card payments securely, and more efficiently communicate with customers; improving operational excellence. Maritime customers will have more capability to self-manage reservations, payments, and access account information. Information and Communication Technology (ICT), Maritime, and Accounting and Financial Reporting (AFR) resources will complete the project. Funds of $550,000 are included in the 2020-2024 capital budget and plan of finance. The additional $210,000 required for the total system cost will be included in the 2021-2025 capital budget and plan of finance. Maintenance will be budgeted in the ICT Operating Budget. JUSTIFICATION Because the aging system does not meet current business requirements for marina operations and was not designed to support terminal operations, many manual processes are in place which result in reducing the efficiency of operations. This includes waitlist management, moorage mapping, and all management of operations and rates for the non-leased terminals. A system that meets requirements, is easily updated as industry offerings and customer service needs evolve and satisfies Port technology standards and security requirements will best support the Maritime Divisions goals. Diversity in Contracting Should contract resources be required to augment internal development staff, ICT will utilize an existing Indefinite Delivery Indefinite Quantity (IDIQ) contract with a minority-owned business enterprise. DETAILS Scope of Work ICT, Maritime, and AFR will deliver a system that supports marina and terminal operations and includes: (1) Customer Self-Service Features. (2) Payment Card Industry (PCI) Compliance. (3) Interface to Port systems for billing and access control. (4) Utilization of current Port systems for Customer Relationship Management (CRM), Financials, and Inspections. Schedule Commission Authorization September 2020 Initial Implementation 4th Quarter 2021 Project Complete 2nd Quarter 2022 Template revised June 27, 2019 (Diversity in Contracting). COMMISSION AGENDA Action Item No. 6h Page 3 of 5 Meeting Date: September 22, 2020 Cost Breakdown This Request Total Project Design/Development/Test $410,000 $960,000 Total $410,000 $960,000 ALTERNATIVES AND IMPLICATIONS CONSIDERED Alternative 1 Cancel Project and Continue to Use Existing System Cost Implications: $0 Capital Pros: (1) Capital funds could be saved or allocated to another effort. (2) The current system is familiar to marina staff. Cons: (1) Due to the age of the existing system, technical incompatibility with current technology will hamper needed updates for security and consistency. (2) Customers today expect modern self-service capabilities when working with businesses. With no self-service capabilities, customers may choose other options and staff costs for unnecessary customer service touchpoints, remain high. (3) New requirements over time are implemented with manual processes, increasing costs and opportunities for errors. This is not the recommended alternative. Alternative 2 Continue to look for a solution available for the remaining authorized funds Cost Implications: $358,000 Pros: (1) No additional authorization or funding is required above what has already been authorized. Cons: (1) Two procurements and many Request For Information (RFI) have been completed over the past several years looking for a system that meets most requirements. While there are a few that meet some needs, there have been none that will support the management of several marinas and non-leased terminal operations, interface with our financial system, and meet information security and Payment Card Industry (PCI) mandatory requirements. This is not the recommended alternative. Template revised June 27, 2019 (Diversity in Contracting). COMMISSION AGENDA Action Item No. 6h Page 4 of 5 Meeting Date: September 22, 2020 Alternative 3 Authorize additional funds to complete Port development Cost Implications: $410,000 Pros: (1) Maritime organization will have a system to support operations, meet security expectations, and enhance customer communication. (2) Self-service capability will be built into the system to delight customers and maximize efficiency. (3) Recurring maintenance costs for Port developed software are significantly lower than most off-the-shelf alternatives. Future enhancements to keep the software current can be completed with smaller capital efforts. Cons: (1) Additional capital will not be available for other efforts or savings. This is the recommended alternative. FINANCIAL IMPLICATIONS Approximately $200,000 was expensed in 2019 when the previously selected contract for software was canceled due to information security concerns. Cost Estimate/Authorization Summary Capital Expense Total COST ESTIMATE Original estimate $550,000 $0 $550,000 Current change $210,000 0 $210,000 Revised estimate $760,000 0 $760,000 AUTHORIZATION Previous authorizations $550,000 0 $550,000 Current request for authorization $410,000 0 $410,000 Total authorizations, including this request $960,000 0 $960,000 Remaining amount to be authorized $0 $0 $0 Annual Budget Status and Source of Funds This project, C800729, was included in the 2020-2024 capital budget and plan of finance at an amount of $550,000. An additional $210,000 will be added to the 2021-2025 capital budget and plan of finance for a total amount of $760,000. Recurring maintenance will be budgeted in the ICT operating budget. Financial Analysis and Summary Project cost for analysis $760,000 Business Unit (BU) Maritime Template revised June 27, 2019 (Diversity in Contracting). COMMISSION AGENDA Action Item No. 6h Page 5 of 5 Meeting Date: September 22, 2020 Effect on business performance N/A (NOI after depreciation) IRR/NPV (if relevant) N/A CPE Impact N/A Future Revenues and Expenses (Total cost of ownership) Port labor for maintenance will be budgeted in the ICT operating budget. Future enhancements after completion to keep the software current will be funded through small capital efforts. ATTACHMENTS TO THIS MEMO None PREVIOUS COMMISSION ACTIONS OR BRIEFINGS January 5, 2016 The Commission authorized the Chief Executive Officer to (1) proceed with the Vessel Moorage System project; (2) authorize the procurement of required hardware, software, and vendor services; (3) authorize the use of Port staff for implementation; and (4) authorize the procurement of vendors services for maintenance, for a total project cost not to exceed $550,000 and maintenance costs estimated at $200,000 over five years. Template revised June 27, 2019 (Diversity in Contracting).
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