Xirrus, Inc Contract - Wireless Network Equipment for Residence Halls
April 1, 2008
Mr. Bob W. Storey
Hamilton, Laughlin, Barker, Johnson & Watson
3649 SW Burlingame Road
Topeka KS 66611
Dear Mr. Storey:
On March 21, 2008, members of the Washburn University Board of Regents approved a $97,213 contract with Xirrus, Inc for installation of wireless network equipment in the residence halls. Several questions were asked and answered at the board meeting regarding the lack of a bid for this contract.
Competitive Bidding at WU - Fact or Fiction?
The agenda item for this action contained the following information:
The University conducted a competitive bidding process from June 14 through July 18 of 2007 requesting proposals for a campus wide wireless network infrastructure. Following a review and evaluation of the proposals received, the ISS Department determined all proposals received were technically nonresponsive and the total amount of any individual proposal exceeded the available funding allocated for the project. The Request for Proposal was canceled.
The ISS Department determined there was only one vendor which could provide the wireless network equipment required, Xirrus, Inc. The University requires a wireless network solution capable of deployment over the entire campus. This will be performed in phases, building by building, over a period of time. ISS determined that Xirrus, Inc. met the following requirements: high user density (250+ users per access point); gigabit ethernet for wired uplinks; power over ethernet; multi-radio access points; and access points which are 802.11n (final) capable or upgradeable.
Prompted by the administration’s responses to various questions asked by different board members, I reviewed the bid documents and all e-mail correspondence with the vendors, including Xirrus, Inc. These documents were provided to me in response to a Kansas Open Records Act request.
I think you might find the actual bid process to be quite interesting, and not as straight forward as portrayed by the administration.
A Failed Bidding Process
The bidding process for Wireless Network Infrastructure began when RFP 70058 was issued on June 14, 2007. The scope of the project, as stated in the RFP, was broader than putting in new equipment in the residence halls. In fact, the scope of the project was to replace the existing wireless network infrastructure “sidewalk-to-sidewalk over the University’s 160 acre campus.”
Responses were received from four vendors, with the cost for both phases of the project ranging from $539,640 to $2,699,849. I have enclosed a summary of the bids submitted in response to RFP 70058. An undated note “To: File” was included with the bid documents that included an evaluation of the proposals presumably prepared solely by Mike Gunter, Director of ISS. The note states that “the proposal pricing submitted by the vendors exceeds the funding available for the project and that all proposals received are technically non-responsive.”
In September, 2007 an e-mail from Mel Ragar, Purchasing Director, went out to some of the vendors that submitted proposals to the RFP. The email stated:
“After reviewing the proposals submitted for a University Wireless Network Infrastructure, it has been determined that the University does not have the necessary funding available to proceed with the project. As a result, RFP 70058 will be canceled. The University will be reviewing and re-evaluating its wireless network needs before proceeding with any future requests.”
It appears that this e-mail was not sent to one of the vendors, since Mike Reece, of ISG Technology, Inc. contacted Mel Ragar via e-mail on October 1, 2007 in “hope of getting a better idea” of what was going on with awarding the bid. Mr. Ragar’s response to Mr. Reece indicated that he had had a telephone discussion with Jon Freeman of Xirrus regarding the cancellation.
From Bids to Quotes
That is the last correspondence in the file with any of the four vendors that responded to the RFP. It is also the first reference to Jon Freeman of Xirrus, Inc. Although Xirrus, Inc was included on the vendor list, there is no indication that Xirrus, Inc responded to the RFP. However, the response from ISG Technology, Inc did include Xirrus equipment.
An e-mail from Xirrus, dated November 30, 2007, indicated that Xirrus, Inc had formally cancelled relationships with over 40 resellers. In fact, since January 1, 2007, Xirrus, Inc is the manufacturer and sole source procurement vehicle of Xirrus Array’s and the management system and accessories associated with the Xirrus product line. While Xirrus is the sole source for Xirrus products, it is not the only solution available to Washburn University’s need to provide wireless network equipment in the residence halls.
Documents included in the RFP 70058 file give no indication that the vendors were made aware that the University had identified a funding source, changed the scope of the project and entered into negotiations with Xirrus, Inc to provide the wireless network equipment for the residence halls. After the vendors were notified on September 19, 2007 that RFP 70058 was cancelled, Xirrus quickly got to work on providing a quote for various projects with more limited scopes.
Personnel from Xirrus, Inc performed two campus site surveys for the wireless network equipment installation. The first survey, completed on September 27, 2007, included the Living Learning Center, Nursing, and the Science buildings. The second survey, completed on October 18, 2007, included West Hall and Washburn Village Apartments. Numerous e-mails were exchanged between Washburn University personnel and Xirrus, Inc sales personnel beginning on September 27, 2007.
Sum of the Parts May Be Greater Than The Whole
Numerous quotes for various projects, including Stoffer Hall, KTWU, Mabee Library, and the residence halls, have been received from Xirrus. There has been no bidding for any of these jobs. In fact, checks were written to Xirrus on:
- February 11, 2008 for “Model XS-3500-4, Qty 3” in the amount of $12,574.75, and
- February 14, 2008 for “4 radio Wi-Fi array, Qty 13” in the amount of $30,759.39.
It appears that the project that was bid in June, 2007 has now been broken down into smaller projects that will be implemented in response to quotes submitted by Xirrus, Inc. There is no competitive bidding process involved and the board cannot possibly determine, in this environment, whether the University is acting prudently.
While Xirrus, Inc may be the sole source for its own product, numerous vendors could be addressing Washburn University’s wireless network equipment requirements.
Reliance on Management Substitutes For Fiduciary Duty
In the action taken by the Board on March 21, 2008, each board member has become complicit in avoiding the fiduciary duty that is assumed in the role of “Regent”. You should take no comfort from the staff’s comfort with doing business the WU way.
Sincerely,
Mary Lou Herring