Prison Phone Justice

INMATE AND PUBLIC PAYPHONE BID
Invitation-to-Bid (ITB) Number 07-X-2170936
Period of Contract - Three years fixed; with two, one year extension
options
Award Method - Awarded by highest revenue percentage to State
Revenue Projections - Projections between highest apparent bidder and
next awarded bidder for one year would be $394,002, for three fixed years
would be $1,182,006, and for additional two, one year extensions would be
$1,970,010.
Reasons for not awarding to highest apparent bidThere exist many requirements within the published ITB that uses the
word "must" - This means that this requirement must be met (no options). It
is the State's long standing policy, to make an award strictly upon meeting
all the published requirements in an ITB.
The evaluation team found several items that were identified as
"must contain" in the ITB, but were not located within the bid at the public
opening (these items are identified on the attached Award Recommendation
letter). Below is a brief defmition and explanation of these items.

1. Financial Statements - The Annual Financial Statement is usually
requested to determine the stability of a suppler. In the past, some
suppliers have not been able to support the financial investment
necessary to service the State.
2. Commission Reports - This is a sample report of the revenues - how
commissions are determined and how they will be distributed. The
State must see these reports in advance of award, to ensure that it can
properly distribute revenue.
3. Management Information and Reports - This is a battery of four
management reports detailed within the ITB. These reports are used
in the administration of the services obtained by this bid. In the past,
some suppliers have not been able to supply such requirements, after
being awarded an ITB.

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STATE OF ALABAMA

DEPARTMENT OF FINANCE
INFORMATION SERVICES DIVISION
64 North Union Street, Suite 200
Montgomery, Alabama 36130-2626
Telephone (334) 242-3800
Fax (334) 242-7002
BOBRILBY
Governor

ANDY HORNSBY
Assistant Finance Director

JAMBS ALLEN MAIN
Director ofFinance

JIM BURNS
Chief Information Officer

MEMORANDUM
TO:

Isaac Kervin, Director
State Purchasing Division

SUBJECT.:

Invitation-to-Bid #07-X-2170936 (TA497) "Inmate and Public Payphone" Award
Recommendation

Bid responses to ITB #07-X-2170936, Inmate and Public Payphone, have been evaluated. Three
vendors submitted responses and pricing for this ITB, as follows:
Vendor

Amount Bid

Line 1 %

Line 2 %

T-Netix

$6,925,302
$6,531,300
$6,510,090

65.21 %
61.5 %
60.858 %

65.21 %
61.5 %
100%

GTL
Talton

Evaluation of the bid responses was performed by Julie Robertson (Finance ISD), Art Bess
(Finance ISD) and Rachel Lee (Dept. of Corrections).
After analysis of the T-Netix bid response, we found the following discrepancies:
1. T-Netix did not include Financial Statements in the bid response as required in 5.3
2. T-Netix did not include a sample commission report as required in 8.12.1
3. T-Netix did not include all sample Information Management reports: Revenues
and Commissions report (lOA. 1), Service Outage report (1004.3), Change of
Telephone Numbers report (10.4.4), Periodic Inventory report (10.4.5).
Analysis of the next highest vendor, GTL (Global Tel Link), found the bid response to meet all
requirements. Therefore, we recommend award of the Inmate and Public Payphone contract to
Global Tel Link (GTL).

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March 13, 2007
MEMO TO FILE RE: Department of Corrections Pay Phone Service ITB
By:
RHCIMS
BACKGROUND
On October II, 2006, the State of Alabama opened bids submitted in response to
Invitation to Bid (ITB) 07-X-2170936 seeking to award a contract for the provision of
prison and public pay telephone service statewide. This ITB proposed to award what
amounts to an "exclusive franchise" to the successful bidder based on the highest
commission rate paid to the State on revenues received from users of the pay phones.
The ITB included standard language expressing the policies and procedures of the
Department of Finance Purchasing Division, including the following:
"The following is a partial list whereby a bid will be disqualified:
Required Information not submitted with bid."
Three bids were received and submitted to an evaluation committee comprised of
representatives from Corrections and ISD. The evaluation was addressed to the level of
commission offered by the bidder, then compliance with the technical requirements of the
bid and then to technical elements of the bid.
It was determined that the most favorable bid was from T-Netix, a subsidiary of
Securus. However, the evaluation committee determined that T-Netix's bid was not
qualified because it did not include financial statements and specified reports.
The next most favorable bid was from Global Tel-Link (GTL). The evaluation
committee recommended to the Purchasing Director that the award be made to GTL,
which was done in December, 2006.
The third bidder was Talton. In conformance with the standard operating
procedures of Purchasing, after determining that the commission offered was less than
the other bidders, no further evaluation was made of the Talton bid.
T-Netix protested the award to GTL on the grounds that the GTL bid was also
technically deficient in a number of aspects; primarily that it did not include required
documents.
In the course of a meeting between T-Netix representatives Rad Gaines, Sonny
Callahan and others with Department of Finance representatives, T-Netix's lawyer
submitted a table of deficiencies it found with the bids of all three bidders. By a
subsequent letter, legal counsel for T-Netix argues that application of the law to the facts

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can only lead to the conclusion that the award to GTL must be set aside and the purchase
be re-bid.
The evaluation committee re-evaluated the GTL bid in light of the assertions
provided by T-Netix. The committee substantiated some of the deficiencies with the
GTL bid that were asserted by T-Netix. The committee also found deficiencies with the
bid of the third and final bidder, Talton Communications.
On February 14, 2007, Mose Stuart, Richard Cater, and Isaac Kervin met with
representatives of GTL Steve Windom, Claire Austin and its legal counsel, Joe Espy. It
was Espy's position, on behalf of GTL, that disregarding the technical deficiencies of a
bid is within the discretion of the Purchasing Director, as awarding authority. Espy's
legal opinion is that any defects in the bid were waived when the award was made and
thereafter contract law, not the bid law, governs the transaction. In support of his
conclusions of the law, he submitted a number of Alabama Supreme Court (and one 11 th
Circuit) opinions dealing with the bid law and the discretion vested in the awarding
authority in determining the lowest responsible bidder. In addition, Espy offered that
GTL had expended $400,000-700,000 preparing to execute the contract before it had
received a directive to cease and desist further action.
The ITB provides that the contract period is 3 yrs from the date the contract is
issued by the State. The Award notice specifies a contract period of 12/19/06 through
12/18/09. The current contract does not ex ire until A ril 200 Neither the ITB nor the
Award Notice a ress the four month overlap or provide 1:1 revenue distribution during
V;ft~
the transition period.

/r

A meeting was held with the evaluation committee to review the process followed
in evaluating the bids. The committee concluded that it had made a mistake in not
analyzing the Global bid for compliance with all requirements of the ITB, including the
failure to provide all required reports. They were not able to offer a rationale for the
disregard of requirement that a bid must include all required information.
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