 | Board of Visitors minutes January 26, 1990 |  |
APPROVAL OF CONTRACT FOR EXTENDED MAINTENANCE SERVICES FOR
THE TELEPHONE SYSTEM NOT TO EXCEED FIVE MILLION DOLLARS
- The following resolution was adopted:
- RESOLVED that the Vice President for Business and Finance be and he is hereby authorized to contract on behalf of the University of Virginia for extended maintenance services for the telephone system in an amount in excess of $500,000 on a basis which is consistent with prescribed procurement policies and procedures and with the approval of the University's General Counsel.
THE EXTENDED MAINTENANCE OPTION
In 1980 the University signed a contract with ROLM Corporation for maintenance of the University's owned telephone system; that agreement will expire in 1997. Per-item maintenance rates were specified for the first two years the contract was in existence, but those costs have since been subject to negotiation. Historically, maintenance fees have increased approximately 10.75% per year.
In August 1989 ROLM announced a special maintenance payment plan, the Extended Maintenance Option (EMO). The EMO offers the customer discounted per-item maintenance fees, and those rates are frozen for a period of 60 months. To take advantage of the EMO the customer must prepay his maintenance costs for the five year term, and the payment is based on the customer's equipment configuration as it exists on the date the EMO becomes effective. New equipment added during the term of the EMO will be serviced at the discounted rate.
As it was originally presented, the EMO pertained solely to ROLM's newest switch (the 9751), and only those customers having standard maintenance agreements qualified for the program. While the University does own a 9751 switch, it comprises only 1/18 of the total system. Further, the University's maintenance contract is non-standard. ROLM, however, has agreed to offer the EMO to the University, and it will apply to the entire system, not just the 9751.
The University's EMO payment will be $5,000,000 and the cost is based on the equipment configuration that will be in place as of January 1, 1990. Equipment added during the term of the EMO will be serviced at $5.52 per item per month; the current rate is $6.12. Because there are insufficient cash reserves in Voice Communications' account to fund the initial payment, it will be necessary to obtain a loan from the University's Budget Office for the referenced amount. Equipment additions will not be financed; rather, they will be funded on a "pay as you go" basis.
| Board of Visitors minutes January 26, 1990 | |