FROM: Robert Thompson, General Manager
Originator: Wally Ritchie, Director of Finance
SUBJECT:
title
SERVER HARDWARE REFRESH FOR INDUSTRIAL CONTROL SYSTEM AND ENTERPRISE OFFICE NETWORKS
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GENERAL MANAGER'S RECOMMENDATION
recommendation
RECOMMENDATION: Recommend to the Board of Directors to:
A. Approve an Equipment Contract to Nth Generation Computing, Inc. for the procurement of HPE vSAN Ready Nodes for the Enterprise and SCADA Environment, Specification No. E-2026-743BD for a total amount not to exceed $7,557,229 plus applicable sales tax; and
B. Approve a contingency in the amount of $755,723 (10%).
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BACKGROUND
Orange County Sanitation District (OC San) operates separate server infrastructure for its Industrial Control System (ICS) and Enterprise Office networks. The ICS server hardware is approaching the end of its useful service life in July 2027, while the Office server hardware, purchased in February 2024, remains serviceable. However, significant increases in licensing costs for both the virtualization and hyperconverged infrastructure platforms prompted IT to re-evaluate its infrastructure strategy. IT determined that consolidating onto the existing virtualization platform, which now includes integrated storage capabilities, offers a more practical and cost-effective long-term approach while maintaining compatibility with existing systems.
RELEVANT STANDARDS
• Protect OC San assets
• Ensure the public’s money is wisely spent
• 24/7/365 treatment plant reliability
• Maintain a culture of improving efficiency to reduce the cost to provide the current service level or standard
PROBLEM
The ICS server hardware will reach end of life in July 2027 and must be replaced to maintain a reliable, supported environment for critical operational systems. Although the existing Office server hardware remains serviceable, it does not meet the requirements of the selected consolidated infrastructure platform. Maintaining the current configuration would require OC San to continue licensing and supporting two separate platforms, leading to higher ongoing costs and greater infrastructure complexity.
PROPOSED SOLUTION
Staff recommends purchasing new server hardware for the ICS and Office environments to establish a common infrastructure platform while maintaining the required separation between the two networks. This approach will replace aging ICS equipment, enable Office infrastructure consolidation, reduce ongoing licensing and support costs, and simplify future administration and maintenance.
The existing Office server hardware remains serviceable for approximately two more years; however, it does not meet the requirements of the selected consolidated infrastructure platform. Maintaining the current configuration would require us to continue licensing and supporting two separate platforms, resulting in higher ongoing costs and additional infrastructure complexity. As part of the consolidation, we will evaluate the existing Office server hardware for reuse in other appropriate applications to maximize OC San’s existing investment and reduce unnecessary equipment purchases.
TIMING CONCERNS
Adequate time is needed for equipment procurement, installation, system migration, and testing before July 2027 ICS hardware end-of-life date. In addition, increased global demand for memory and other components, driven in part by growth in AI computing infrastructure, has extended server delivery lead times to three to six months. Proceeding with the purchase will reduce the risk of supply-chain delays that could affect the planned implementation schedule.
RAMIFICATIONS OF NOT TAKING ACTION
Not purchasing the new hardware will keep the ICS environment operating on aging hardware beyond its planned service life, increasing the risk of equipment failure, limited manufacturer support, and potential service disruptions. Additionally, OC San would need to maintain separate infrastructure platforms, resulting in higher ongoing licensing and support costs.
PRIOR COMMITTEE/BOARD ACTIONS
N/A
ADDITIONAL INFORMATION
An invitation for bid was issued on September 1, 2026, via OpenGov. Bids were due on September 22, 2026, and OC San received three (3) bids.
The bid submitted by vPrime Tech Inc. was disqualified due to the absence of pricing information in OpenGov. Although vPrime Tech Inc. provided a quote as an attachment, it did not include pricing for all required line items.
The protest period ended on 9/30/2026 at 4:00 PM.
Bid Results
The following is a list of the firms who submitted a bid.
|
Company Name |
Bid |
Determination |
|
Nth Generation Computing, Inc. |
$7,557,228.80 |
Responsive |
|
Blue Source Group, Inc. |
$15,114,526.64 |
Responsive |
|
vPrime Tech Inc. |
$0.00 |
Non-Responsive |
Recommendation
Based on these results, staff recommends approving the Equipment Contract to Nth Generation Computing, Inc. The term of this Equipment Contract will begin upon effective date of the Notice to Proceed.
CEQA
N/A
FINANCIAL CONSIDERATIONS
This request complies with the authority levels of OC San's Purchasing Ordinance. This item has been budgeted (Budget FY 2026-27 and 2027-28, Section 8, Pages 4 and 6, Information Management Systems) and the budget is sufficient for the recommended action.
ATTACHMENT
• Equipment Contract