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The Board of Water Commissioners for the City of Detroit, Water and Sewerage Department authorizes the Director to approve Amendment No. 4 to DWSD Contract 6001088 (CS-1804) with Diversified Data Processing and Consulting, Inc. dba DivDat for Bill Payment Kiosk Services by extending the term by 5 years, through 9/9/28 and adding additional funds of $5,000,000.00 for a total amended contract not-to-exceed amount of $10,695,125.00 This also authorizes the Director to take such other action as may be necessary to accomplish the intent of this vote.
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Agenda of September 20, 2023
Item No.: 2023-202
Proposed Amendment No. 4
Contract No.: 6001088 (CS-1804)
Contractor: Diversified Data Processing and Consulting, Inc. dba DivDat
Contractor Address: 2111 Woodward Ave., Suite 702, Detroit, MI 48201
Current Contract Amount: $5,695,125.00
Proposed Amendment No. 4 Amount: $5,000,000.00
Proposed New Contract Amount: $10,695,125.00
Current Contract Term: 9/9/16 - 9/9/23
Proposed Amendment No. 3 Extension: 9/10/23 - 9/9/28
Proposed New Contract Term: 9/9/16 - 9/9/28
TO: The Honorable
Board of Water Commissioners
City of Detroit, Michigan
FROM: Gary Brown, Director
Water and Sewerage Department
RE: Proposed Amendment No. 4 for DWSD Contract No. 6001088 (CS-1804)
For Bill Payment Kiosk Services
Diversified Data Processing and Consulting, Inc. dba DivDat
MOTION
Upon recommendation of Marqaicha Welch, Procurement Manager, the Board of Water Commissioners for the City of Detroit, Water and Sewerage Department authorizes the Director to approve Amendment No. 4 to DWSD Contract 6001088 (CS-1804) with Diversified Data Processing and Consulting, Inc. dba DivDat for Bill Payment Kiosk Services by extending the term by 5 years, through 9/9/28 and adding additional funds of $5,000,000.00 for a total amended contract not-to-exceed amount of $10,695,125.00. The BOWC also authorizes the Director to take such other action as may be necessary to accomplish the intent of this vote.
BACKGROUND/JUSTIFICATION
The use of DivDat Kiosks and DWSD’s mobile pay application has increased since its inception in 2016. Kiosk usage has been recently growing at a rate of over 2,000 new users every month and now stands at just over 18,000 kiosk transactions per month. Web usage jumped 50% between March and May to just over 25,000 transactions and as DWSD migrates off of its current payment processor, Invoice Cloud will approach 50,000 payments per month. IVR was added in March (it uses the same technology as the Web) and now accounts for over 18,000 transactions per month.
DWSD uses Divdat to process credit card, check and cash transactions from all payment channels. Charges are calculated on a monthly maintenance fee plus per transaction basis. This contract has been stable for the past 5 years with no cost increase to the per transaction rates. During the COVID-19 pandemic, DWSD made a large push to direct customers to self-service payment channels which increased usage. As usage increased the costs Divdat was responsible for, such as Armored Car transport from the Kiosks and staffing costs, have increased. Therefore, per transaction charges and the monthly maintenance fees have increased an average of approximately 9%.
PROCUREMENT
In August 2016, DWSD and Diversified Data Processing and Consulting, Inc (DivDat) entered into an agreement that provided 40 kiosk stations across the City where DWSD customers could pay their bill via, cash, check or credit card.
Amendment No. 1: In July 2017 the agreement was amended to add the City of Detroit’s treasury department as an additional kiosk tenant and to add the capability to extend the kiosk technology to the web.
Amendment No. 2: In June of 2018, the agreement was amended by $270,125 to account for additional transaction costs due to an increase in usage of the kiosks and web payment channels and to give the parties needed time to finalize an amendment that consolidates all of the DWSD payment channels to DivDat.
Amendment No. 3: In 2019 a Change Order was created to add $4,925,000 and extend the term to September 9, 2023.
Proposed Amendment 4: The DWSD IT Department submitted requisition #510510, which was approved by Budget on 9/1/23. Amendment No. 4 is a request to add $5,000,000.00 and extend the term to 9/9/28 (5 years). The additional funds will cover the contract term extension of five years. The funds and extension allow DivDat to continue providing Bill Payment Kiosk Services to DWSD.
Diversified Data clearances expire 1/10/24. An amendment to the service contract will be routed for signatures.
SUMMARY
A. Contract No.: 6001088 (CS-1804)
B. Initial Term: 9/9/16 - 9/9/18
C. Amendment 1: (Expanded scope)
D. Amendment 2 Extension: 9/10/18 - 9/9/20
E. Amendment 3 Extension: 9/10/20 - 9/9/23
F. Proposed Amendment 4 Extension: 9/10/23 - 9/9/28
G. Initial Contract Amount: $500,000.00
H. Amendment 1 Amount: N/A
I. Amendment 2 Amount: $270,125.00
J. Amendment 3 Amount: $4,925,000.00
K. Proposed Amendment 4 Amount: $5,000,000.00
L. Proposed New Total Contract Amount: $10,695,125.00
M. Funding Source: O&M Funds
N. GL Strings:
5720-20168-483301-622302-000205-10790-0000-000000 - 38.2% Water
5820-20179-493301-622302-000226-15805-0000-000000 - 61.8% Sewer
O. Anticipated Fiscal Year Spend: FY 23-24: $1,000,000.00
FY 24-25: $1,000,000.00
FY 25-26: $1,000,000.00
FY 26-27: $1,000,000.00
FY 27-28: $1,000,000.00
This contract was presented to the BOWC Finance Subcommittee on September 6, 2023. Per DWSD procurement protocol, Mayoral Review will also be obtained.