Time once again for another First Things First podcast. And this is a very special one because this marks season two. We have been doing this for over a year now, staying informed, getting involved, and making a difference. That's what we do here at the First Things First podcast. I am Dan O hanging out.

Across from me, Don Haviger, your executive director of First Things First. We got Dave Hannah hanging out with us. He's been here for, like, three, four shows now. Dave, you're basically a regular business owner here in town and very special guest in the studio. I'd like to welcome Chris Rushman.

He's owner of Snow Cloud Services and Mark Lukini, also owner of Snow Cloud Services, IT and Internet providers in town, and they've been doing it a long time around town. Don, welcome back to the studio. Here we are. I think this is a perfect way to kind of remind everybody about what First Things First is all about, and I think that'll be a good segue into our topics tonight.

Very good, Dano. It is a pleasure being back for season two. First things first, Alaska Foundation is a 501c3. We're local. Our board of directors is here in Juneau, and these are our stomping grounds.

As a five zero one(three), we are an educational foundation. That fits in well with today's podcast, which really is about a concern of the business community. And I've titled this one Juno Affordability, because we've talked about that recently. And the second half of that is making decisions that increase costs. And we're going to unwrap that in this podcast and see how we make decisions at the local level that could increase costs or increase costs.

I'm going to punt it over to Dave, because I want him to just address a little bit about affordability and how important that issue is to Juneau.

Yeah, thank you, Don. For those of you who don't know me, I'm a fifth generation Junoite. My family's been here since 1880. Kids, have sixth generation Junoites, only one of them still lives here because the other two couldn't find suitable job opportunities here in Juno. Affordability is a big issue.

I was part of a group that circulated petitions and we got a couple of ballot initiatives passed this year to make Juneau more affordable for people who live. And it was really interesting talking to the people as they came to sign our petitions because the one overriding concern was their lack of confidence in the city's ability to spend their money wisely and the lack of transparency in some of the decisions the city was making. And I think that's what we're gonna find today is a stellar example of how we had a procurement decision that was irresponsible, spent too much money and was not totally transparent. So I think our guests here today are really gonna open some people's eyes about some things that happen.

One thing I do love about this is we never know what happens behind the cities. This, the city just puts out these bids for these projects that they have around town. And I think what a lot of citizens don't know is basically what are these projects? How does it affect the people of Juneau? How do people even bid on this stuff?

So I think this goes into a perfect segue into what we're talking about tonight, and it's kind of what's important to everybody. Everybody wants Internet right now. That's why we have Chris and Mark right here because it's a big hot button topic, and that's what brought up this thing called the Maritime Industrial Zone, the MIZ Wi Fi Project.

With that, Dano, let's go back to our honored guests tonight, Chris and Mark. And so let's begin just about talking about the RFP process, a little bit about the timeline, and give our listening audience that overview, that 30,000 foot overview.

Well, I can start, Chris, you can jump in. The Maritime Industrial Zone WiFi project was put out as an RFI a couple years ago, and we responded to that. It was just some basic information about what it would take to do WiFi. And in the area from basically the rock dump going up to the whale sculpture, and then kind of over to the Baranov, so that sort of strip, you know, the main tourist area there in the downtown area. They ended up putting out an RFP back in late twenty twenty four, and we were one of six bidders who put in proposals for that.

It was basically to provide WiFi connectivity to all the public, people coming off the cruise ships at any point. The idea was to alleviate some of the cell phone congestion in the downtown area.

So we're gonna fix a problem. We're gonna make communications in the downtown corridor where we have our 1.3 or whatever million tourists coming so that Junoites get their communications as well as visitors. So in your response, what kinds of materials or services was the city asking for and what did you say you could provide?

It was a pretty big project that required quite a few entities in different trades, would say, to fulfill what they were looking for. To provide as big of a wireless coverage area as they're talking about providing, it required a lot of coordination between, I don't know, the docks in Harbor, DOT for pole access, it required, in certain circumstances, access to buildings, business owners. It was a very, very tough, challenging RFP to respond to, because of the amount of requirements to meet the RFP were challenging, right? So I mean, you needed electricians, because you needed to wire You needed to change out photocells on light poles so that the infrastructure that you're putting in can stay up during the day.

One of the things that caught my attention, Chris, and I just want you to kind of broaden the scope of the need here, is that there needed to be twenty four hour responsiveness to that service. In other words, this was not just set something up, walk away. This required your full time attention as a company. Is that correct?

No, that is correct. We, in the RFP, we effectively put in to have a full time employee that would be responsible for this project if we were to win it. But that would also be backed up by a whole team of people that we already have in town, that are fully capable of supporting this project as well. We employ almost 15 of us, and we do this stuff every day.

Now Chris, those 15 are local Junoites, is that not correct?

Correct, everybody there's one that lives in Huna, but yes.

Southeast Alaska, not a Southeast Alaska,

there you go.

Eventually, I wanna kinda talk about cost here, because we are talking about affordability and a decision that was made. First of all, we've established the fact that this is not a small project. Some of your competitors that responded, can you tell me some of these companies, big, small, or all over the board?

Oh, ACS was one of them, large companies from down south, a company called ICE, a company called Bolden. They do WiFi projects down south, so they're probably much bigger projects.

How long have you guys been in the IT business here in Juneau or Southeast? And can you kind of talk about your level expertise in this industry?

Snow Cloud Services started in 2004. Chris came to Snow Cloud, or Southeast Communication Services, right around 2010. We were longtime friends, we decided, you know, let's let's do this and make it work. So we became business partners in 2010. And then we started to develop from there.

Southeast Communication Services became Snow Cloud Services in 2017. But yeah, I would say it's 2025, so fifteen good years of our partnership.

And do you have infrastructure downtown already that relates to internet?

Yeah, and I think that goes to one thing I wanted to mention about this project is it required a company to deal with the unique challenges of downtown. Snow Cloud Services, I mean, the bulk of the Maritime Industrial Zone is our base of operations. Our office is right in the middle of it. We've been under all the docks at some point in time over over the years in every single building downtown. We know them very well.

And I think that was one of the things that we felt we had an an upper hand with bidding on this was that I mean, the the city in borough is actually getting WiFi from us downtown.

Today, now.

The original WiFi project that was funded by the libraries was in the Marine Park.

Marine Park.

So what we did is we went and installed internet in Marine Park for the library so they can get tourists out of the library. So they said, hey, why don't you go use the WiFi over at Hut over there and get out of the library?

I mean, was almost a precursor to this whole larger project. You And would have think they would have asked us and talked to us a little bit about it before they kinda went down

the road.

So Snow Cloud been involved in tourism for quite some time. You've been moving congestion points or friction points around the community in the downtown area already. Love that picture.

Large amounts. We were the provider that was always called, because GCI couldn't do it, or ACS couldn't do it. And everybody was like, well who's Snow Cloud? We don't advertise, we don't do any of that kind of stuff. So our presence in downtown is spread by word-of-mouth, and the reason why it's spread by word-of-mouth is because we did a very good job.

So we got lots of business owners, we got lots of residential people, they just didn't have any other options. So we exist because people like what we provide, right?

We have a general picture of the project, but I wanna take it to the next step because I wanna get to that decision making point, and we'll talk about the body that made that decision a bit later. But companies, I think you said several of them, maybe six Mark, responded, and then those responses were reviewed. Can you tell me, or the audience really, what happened after you submitted your response and the review process?

There was a lot that went into this, even before the RFP was to be put in, right? There was a couple of pre RFP submission meetings that were had with the city. The process is is with a project like this was was intense. We had to put in a lot of effort, and during the meetings that we had with the city, questions that we were trying to get so that we could answer the RFP correctly, they just couldn't answer them. And they told us, it's like, well, an example would be, we wanted to know more information about city resources that could be used for putting access points on and stuff like that.

And we were told that, well, we don't have answers for you. They didn't have anybody from like Docks and Harbors. They didn't have the streetlight people. They didn't have any of those people as part of these meetings to answer the questions to deploy this properly. They had just told us, well, that's all gonna happen after it's awarded.

We'll have those discussions after it's awarded. This was out of Chris Murray's mouth, he was driving around on his car during

I'm sorry, who is Chris Murray?

Oh, he's the IT director, he's the formulator of this RFP. He created it and

So he's a city employee?

Yes, he's the IT director We for the had all these questions and we couldn't get them answered and we were told that they'd be answered after it was awarded and that was frustrating. I had reached out to several people that I knew in the city. At one point I reached out to the harbor master, and I asked him, hey, can you help me? I'm trying to figure out information on this RP. And he said he had been instructed to not talk to anybody about this RP.

That was frustrating. I was like, okay, so I can't get any answers to formalize our RFP because nobody can talk to me. And the people that have put the RFP out don't have the answers that we need, right? They would just they would all come later, right? And I was like, well, how am I supposed to respond to an RFP if I can't get answers to things that are gonna

So Chris, what you're saying is, to a degree, your response to the city contains, we'll call them shots in the dark. In other words, you have to guess at what the city wants and you have to respond to that. So did other companies you think get the answers that they were seeking to any questions?

Nobody did. So in those pre proposal meetings, you know, ACS was involved, we were involved, I think ICE or Bolden was in there. When it got interesting for me, and this is of where this is why I say it gets a little bit more complicated. There was a company called North River that made their self known during one of the pre proposal meetings, and I was like, who is North River? And it like something like went out of my head.

Who's this North River IT company that's in this pre proposal meeting? And it took me a little while while to figure it out, and we could talk about that later. Don't have to go down that rabbit hole right now, but it it seemed to me that the city wasn't interested in helping anybody provide the best value RFP. They weren't able to give us the information that we needed, so that we can accurately provide numbers. They didn't have any of that information, they just figured that somebody was gonna give them some magical, you know, proposal, and they were gonna look at it, and they were gonna vote on it and say, yes, we want this, and they were gonna figure out all those nitty gritty details later.

It didn't make sense at the time, and there's a lot of hindsight that later on you kinda start to realize maybe why it didn't make sense.

Just for the listening audience, since they didn't see that, Chris, as you were mentioning the ambiguity there and other companies having the same issues you did. Mark, you were shaking your head. What was that head saying?

Well, I remember specifically in one of the pre proposal meetings, the main pre proposal meeting,

I think there

was actually just the one.

It was December 3, the Yeah. Big That was supposed to be big.

There were multiple vendors where you could tell that people were sort of shaking their head. I remember we were talking about the challenges of doing this and how it's not really that great of an idea to try to flood WiFi downtown and have it go into people's businesses who already have WiFi set up. There's gonna be interference and things like that, and I remember one of the other vendors, I think as soon as you kinda, Chris, had dove into the details of that challenge in particular, I mean, vendors just started saying, yeah, that's gonna be an issue. Like, yeah, this isn't a good idea. And that was one of the main challenges that we put in our protest was the winning bidder, if we're not there yet, to talk about that, but the winning bidder failed to even mention any of these challenges.

So we felt like

Let me take a step back, You're going exactly where I wanna go.

He is, he really is.

But the bids are submitted, an individual from the city actually awarded, well, they went through their scoring process, and they found what they perceived was the overall winner of the bid process. And so that was awarded to a company. Can you pick it up from that award process and then talk about your involvement immediately after that?

We felt like they had already chosen their vendor and they were just crossing Ts and dotting Is with this whole RFP process, frankly. We were ready to protest immediately once we kinda got confirmation.

What I'm after is this, that each of the companies provided their response to this RFP, which is a formal process. That formal process is regulated by city statutes, rules and regulations. So, and I wanna get that in your minds. It is a formal process. Part of that process is there's a review committee, there's score sheets, those score sheets are judged, each company gets a score, and based on that score, somebody is awarded that contract.

I'm gonna jump ahead. North River IT company won the bid. Now, after that, and this is what I wanted to get to Mark or Chris is what happened?

I think something that's very important for the people to understand is this RFP process was like a multi phase thing. So when everybody submitted their proposals, there's a proposal to initiate the process. In other words, put all the equipment in downtown, put together a system that will actually work, that's your first year and then there would be subsequent years where you would maintain the system, you would be providing a service. So it was like a multi tiered proposal and how that was configured and how it was awarded kind of plays a serious part in this and I think Mark can address that pretty well.

Maybe I'll take this over, because I think I know what you're saying. The RFP was awarded, it was ordered at the very end of the year, very, very close to the close of business that was gonna happen for a while. So we knew something was wrong, right? We read the numbers like, how did they win this? We read the proposals and we immediately started asking questions.

What were things that stuck out to you in that, that made you protest?

Well, the overall cost was one of them. It's like, how did they win with the cost as high as they were, And well, you look at how they did it and they tiered, they set it up to get the money over a longer period of time, right? So they did a real low initial, hey, we'll get this done for this much money, and it was 7 and $49,000. And you're like, $749,000? That's an important number.

It's a very important number.

1,000

It's dollars $1,000 less than what the city needs to bypass assembly approval for a project. You're like, okay, we didn't know that initially, we found it out later, when we all were sitting around a table talking about how this happened. We were 800 and what, $43,008.63. And that was like, we did it pretty much at cost, right? And that's with all the infrastructure and everything that we already have in the area, didn't quite understand how anybody can do it cheaper than us, because I mean, we worked with electrical companies, we worked with everybody to figure out what is the brass tax number of what this is going to cost to do it.

And we shaved as much off as we could to get to 800 and something thousand dollars, right?

And I think it's very important to note that you already had so much of this resource in place and you're already familiar with

all We had a lot of efficiency. And

absolutely nobody else had that.

Nobody. No. Nobody else. So we couldn't quite understand how somebody underbid us, for one. With not being in Juno, not being a local Juno company, not having any infrastructure here, not having anything that we already we already have the bandwidth.

Right? We're an ISP. We have more bandwidth than this project requires, and then some. I think you were out of town. Yeah, was talking He on vacation, I'm like, screw this.

I'm not I went through the city code and I was like, how do I stop this? Right? And I went through, and I was like, okay, well I gotta take a check for $500 to the purchasing department, and I gotta file a request to protest, I guess, is what it initially was. Right? And then so what that does is it allows you to stop the process.

Right? That what that does is it gives you a certain amount of time to pull back, take all that information, all that stuff that you you you you're wondering about, and then present it to the purchasing department and say, hey, these are all of the things that we think are wrong with this. And then they have to respond to that. Right? That was that was a very cumbersome process in itself.

Getting all the information to refute something that you think is wrong and then in a way that a purchasing department can respond to it, right? That's no easy task, especially when you didn't have a lot of time to prepare for it, right?

So just after the holidays, because you said it was at the December, and we're just into the New Year's, you had, if I remember right, something like five days to

You have twenty four hours from the time that the award was announced to submit your request to protest. Right? So you only have twenty four hours on, I think it was like on a Friday, in like a holiday weekend, and all those kind of stuff. So it was like, here I am, twenty four hours, we found out the email, we got the email and I had twenty four hours to get a check and figure out how to navigate through the city's code to go down there and say, here's my protest. I'm officially protesting, here's my check, take it.

And then that's when the clock starts ticking.

So as a business owner, you spent your holiday weekend working on your business, trying to essentially make what you perceived as an injustice right. I appreciate that. For business owners, we do that all the time, so.

Was a dropout

was a thing Do

it, But

going back to the process, so the protest was filed, you went through all the effort to get all that paperwork done and what happened next? And specifically, what did the city, either the procurement officer or somebody above that do with your information and just the results is all we need?

Well, denied our protest, they said that there was nothing wrong and everything was done according to laws and everything looked good and they see no reason why anything was weird.

Good, and I'm gonna interject this here because I also think it's important. In a memo, although it was months later, and this came from the city manager's office to the assembly, somewhere around April, I believe it was dated, it said that the CBJ had been already committed to paying 749,000 to North River IT. So we were, somebody had made the decision and we were on the hook already, but a protest was ongoing. So they denied the protest the first time, at least procurement officer did. And so Mark or Chris, what did you do next, and what was the result of that?

So that was me also. So they denied the protest, I was like, Oh, great, well what's next? So I go back through the city code, and I'm like, All right, what's next? Blah, blah, go through all this stuff, it's like, Oh, now I gotta request for a review, right? And this is something that I think is rarely done, and it's rarely successful from a standpoint of protesting an RFP, right?

So the clock now extends a little bit farther, right?

We should probably explain to the people in the audience that what you do is you file an appeal and it goes to a group of citizens, it's called a bidding review board. Correct. And these are very well schooled professionals who greatly understand this. I mean, we have it. We have an attorney on there.

We have a state procurement officer.

The lead state procurement officer.

We have the former city director of public works and state southeast region director, he's an engineer, yeah, these are people who are very well schooled and able to carry this process through. Well, I think really it's critical to quickly review what was presented to the bidding review board, and the thing that we were initially talking about at the start of this was affordability and how the numbers shook out in how this award was presented. And I think Mark or Chris can identify that, what the disparities were between all proposals and what the final result would have been.

The winning bidders' sort of five year total was just shy of $4,000,000,000 The second place proposal was 1.6. So you're talking a difference of 2 and a half million dollars. Technology's the same, process is the same. I mean, all the all the all the proposals were virtually the same in terms of how they went about the whole project. But the bidding review board bid, we basically made a quick speech to the bidding review board, and they agreed with us point for point.

Basically everything we brought up, they agreed with 100%, and said that they should not go through the recommendation was to grant the protester, I forget the verbiage.

And I think it's really important to note that as this was still going through the appeal process, The city arbitrarily decided to go ahead and send money to the North River IT folks and begin the process. This is directly in conflict with city process. You absolutely do not award a contract until you go through the appeal process. I've been in the construction industry my entire adult life and I've watched these processes play out numerous times. And for this rule to be violated is just appalling, and everybody I've mentioned it to that's in my industry is just aghast, they can't believe it even occurred.

Yeah, mean, and that's inevitably what led to this award being given to the original responder that won was Robert Barr with the city of Juneau, waved a hand and said he didn't like how long the process was taking to get through. He wanted this to get done. So he said, We're gonna move forward anyways, regardless of what the review process is doing or saying, and we're gonna get this company to start working on this project. And so they gave them money, and they said, Start, order stuff, get it here, get it coming. Meanwhile, this process is still going on.

And then when you fast forward, bidding review board sides with us, they say everything's good, right? These guys clearly had a better proposal, these guys were non responsive in their proposal, they didn't answer all the questions that needed to be answered, they were giving it to it wrongly.

Chris, quickly, what was the bidding review board's recommendation to the city? Do you remember that?

It was, I mean, verbatim? No,

just Like Dave had that ready

to Summary recommendation, BRB recommends that SCS's protest be granted and NRIT's bid be rejected pursuant to CBJ code fifty three fifty sixty two blah blah blah blah. Less formally, it is suggested that the PO either consider the second place proposer, which was Us, or cancel the IRP. The BRB believes NRIIT's proposal failed to address the necessary electrician requirements, failed to address the complexities and challenges of the job, and their proposal, including if statements, was non responsive to the request.

Perfect. In summary, they just said, do it again. Either give it to a local business or the individual that came in number two according to the bid sheets or do it again. And this is where I want to also get our audience to. That bidding review recommendation went to the city assembly.

And what did the city assembly do with that? Well, first of all, let me take a step back. The city manager's office, through Mr. Barr, recommended that the city assembly not take the Bidding Review Board, a citizen group's recommendation. And what did the city, after their executive session on this issue, come out with?

They voted to take no action.

That's correct. What I want the audience to understand is that the city has a formal process, it is well established. And this has to do with large contracts and that formal process was not adhered to in this particular case. And the net result is that we are on a track record to spend $4,000,000 when we could have got something done for $1,600,000 And so when we talk about affordability, we've got to understand that each of these decisions is important and we have to pay attention

to affordability. And one thing I'd like to get, one last point across, I'd ask Mark or Chris, when the city assistant manager decided to spend that money, can you tell me what the rationale for it was? Was it to expedite the process and get it in place for that season?

It was.

And is that process in place and is it working?

No, it is working, but it's not a 100%. It's not even close to a 100%.

What does that mean exactly when you say that?

It is a fraction of where it is supposed to be. If you look at their proposed zones A and zone B, this is the nobody can see it on the radio. But what is highlighted is what is complete. And this is according to the NRIT website that was confirmed today by Mr. Murray from the CBJIT.

Department.

That looks like an ink spill. Is that supposed to be bigger?

Maybe. We're looking at third of one zone.

Marine Park, maybe over to the Red Dog and the library up to the triangle.

So all the complexities of going down the dock and doing all these things, they just didn't do them. Are all like the meat and potatoes.

They pocketed the money is what we

really Pocketed the money,

is that correct?

They got fully paid out and they pocketed the money and now it's up for, For renewal. Renewal. So now they're potentially gonna get more money to maintain this system that they didn't complete in year one.

So I guess my question would be is if the city decided to cancel the contract at this point and award it to you or maybe even the next most responsive bidder, would it still be cheaper for the city borough in the long run?

They'd come out ahead. It would. I actually have the numbers here, even at our original bid for the first year of 863,000, if we took that, moved it to year two, and then even the next year after that, it's in place, it's up and running, they would still save over $500,000 just in the next two years.

So they didn't save anything by doing any

of And

over the course of the total four years, if we're gonna go that route, it would be a little over just under $2,000,000

That they would save.

That they would save.

And quite frankly, they didn't save anything, nor did they get what they paid for in the beginning, is that correct?

Correct. And they have the opportunity to keep waiting to do

And that's really the point, thank you, Dave. We make decisions that just increase cost. And our community just needs to do better. And in this case, when I say our community, this is an assembly decision, and the assembly has to make better decisions. We have to return to affordability for this community.

So gentlemen, thank you so much for your time, I appreciate it. This was a big issue, hard to get through it, but you did it.

The scary part is how many other bids have gone through something like this? How many other business owners out there have gone through something like this that Snow Cloud is going through? That's something to really think about.

I had one of these RFPs state processes, and I've gone through the process. So I'm not unfamiliar with it. In this case, I was the company that was called on the carpet, and the other company won.

All this information is publicly available online, this whole process is. You can search for RFP, what is it, 25Dash1 90, you'll find all kinds of information. You can also get information, you can watch the video of the bidding review board meeting that we're in, which has a very robust thirty plus minute data dump from us during this process, and it goes into extreme detail. And then you can also get access to the Bidding Review Board's response, which is also several pages.

This is public information, this is a public process, And in many respects, we did not do well.

And this just goes into our segue of what First Things First is all about and this podcast, staying informed, getting involved and making a difference. Remember, you can download this podcast, listen to it anytime you want at the First Things First website or at kinyradio.com. I wanna thank Don Habiger, executive director of First Things First. Dave Hanna, business owner, had some passion behind this one, Dave, today. Chris Rushman, owner of Snow Cloud Services, and Mark Luchini as well, owner of Snow Cloud Services.

Thank you guys for coming in and telling your story. Don, if people wanna get involved, how do they do it?

Thank you, Dan. The easiest way to get involved with Birds Things First is go right to our website. So it's ftfakfoundation.org. Again, our website, ftfakfoundation.org.