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Nortel beats Cisco for IP telephony contract

Nortel announces that San Jose, Calif., has chosen its IP telephony gear over Cisco's products.

Nortel Networks beat out rival Cisco Systems in a deal to supply San Jose, Calif., with IP telephony gear for its new city hall complex.

Cisco had been awarded the contract last year through its reseller Unysis. But in August the city halted the Cisco installation and reopened the evaluation process after an investigation turned up irregularities in how the deal had been awarded.

Independent auditors discovered that technology officials for the city did not follow an appropriate process when they called on Cisco executives to help them design the request for proposal that was to be used by vendors and systems integrators bidding on the contract.

City officials said that because the city had not explicitly standardized on Cisco equipment for the contract, it was inappropriate for San Jose's technical team to be working so closely with Cisco.

The new contract using Nortel gear is worth $6 million, a $2 million savings over the bid from Unysis.

Cisco wasn't even considered in the second round of bidding, which opened in December, said Edward Shikada, deputy city manager for the city of San Jose. Cisco's partners had each been disqualified for various reasons, he added. SBC Communications had not met all of the requirements laid out in the RFP, and Unisys did not file all the necessary paper work on time.

"Nortel and Cisco didn't actually compete head to head on the latest request for proposal, since Cisco's partners were disqualified," he said. "But we are pleased with our selection. Nortel's solution provides the best value, end to end."

Nortel is expected to complete the city's new Internet voice network by June 9.