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Z15.1 Bid Bond: Enclosed is a check payable to the City of Santa Ana that represents ten percent (10%) of the total amount of the proposed solution (without provisions for cost of Performance Bond) provided by Linear Systems. (Attachment #3) See: 2.13 Amendments and/or Exceptions to RFP/Contract Bid/Performance Bond 2.15.2 Performance Bond: Linear Systems will comply with the requirement for a Performance Bond within the allotted time. We do not recommend this as an option for the city. In the Bid Instructions on www.ci.santa-ana.ca.us, there is a provision that states `Bonds: When deemed necessary by the City..." (Attachment #4) This indicates that a bond is not necessary for all City business. Linear Systems has been in the integration business since 1988 and has sold and completed tens of millions of dollars in federal, state, and local government projects and has never been required to submit a Bid Bond or Performance Bond. None of the associated companies that we deal with have ever been required. There is a very high cost to Linear Systems for these bonds and therefore some of that cost must be passed on to the City. This cost will easily exceed ten percent (10%) of the total cost of the system. There are many factors for this including the cost of the bond, cost for the line of credit to replace the funds placed into the bond, cost for the time to comply with the bond documentation, and many other soft costs. In addition, there is additional risk for Linear since there is a hard cutoff date on the bond and there is a remote possibility that work will continue past that cutoff date due to backorders, software customization, or delays beyond our control. In addition, if Linear needs to encumber a large portion of our funds for the bonds, Linear will need to require the City to pay an additional post award, pre install deposit for hardware. Unlike construction, a Bid Bond and/or Performance Bond are not necessary, not accepted business practice, and very costly to the City, therefore Linear Systems respectfully requests that the post award requirement for these bonds be eliminated. See: 2.13 Amendments and/or Exceptions to RFP/Contract Bid/Performance Bond 2.16.2 Ability to Meet Production Schedule: Linear Systems is capable of meeting the production schedule within the required timeline. Linear has the advantage of having a hardware and software solution that already exists that exceeds the requirements and specifications of this RFP. This will allow Linear to provide and integrate the solution in the shortest amount of time. The ability of Linear to meet the production schedule greatly depends on the City of Santa Ana. The Purchasing Department, the City Attorney, and Police Department will need to "fast track" the proposal evaluation, bid award, negotiation of a Contract purchase order, and equipment deposit in order to meet the very strict deadline for completion of the project as per the FY04 Urban Areas Security Initiative Grant. 2.16.2 Implementation Schedule System delivery will start thirty (30) days after execution of Contract and receipt of purchase order. Completion of installation would be approximately sixty (60) days after delivery. System testing can begin ten (10) days before completion of the installation. Completion of contractual training would be approximately thirty days after installation. "Go Live" can be sixty (60) days after beginning of testing and after Policies and Procedures are approved Additional follow-up training will be available as needed. These are estimates based on many factors including availability of required resources at Santa Ana Police Department and date of payment of equipment deposit. Delays will also cause conflicts with other commitments by Linear Systems for installation and support of new and existing system installations. See: 4.4 Training Definition and Limits 2.17 Bindine Proposal: This proposal shall be valid for one hundred eighty (180) days after submission on June 6, 2005. See: 2.13 Terms and Conditions linear Systems Confidential Page #13 of 66 Sema Nie PD P Wp f 060405.doc