Nippon Electric Recommended in 2nd Round : Switch Is Pulled in Phone-Contract Choice

A second round of evaluations has produced a new winner in the bitter competition for a multimillion-dollar contract to provide telephone service to San Diego city government offices, the city’s data processing agency announced Monday.

A five-member panel of telecommunications experts selected Nippon Electric Corp. as the top firm and recommended opening negotiations with the firm for provision of 6,300 telephones and other communications equipment.

The report will be discussed today by the City Council, which in May forced San Diego Data Processing Corp. to reopen consideration of all seven firms bidding for the lucrative pact. Final authority for selection of a vendor rests with the data processing corporation, which was established by the council as a quasi-independent agency in 1979.

Process Called Flawed

Led by members Ron Roberts and Abbe Wolfsheimer, the council rejected the data processing agency’s tentative selection of Tel Plus Communications, contending that the selection process was flawed. The council at one point threatened to disband the corporation if it did not comply with the council’s wishes.

Tel Plus officials in San Diego and Pleasanton, Calif., were not available for comment Monday. In order to enter the second round of bidding, the firm and all its competitors signed agreements promising not to file lawsuits if they lose under the new selection process.

Whether the forced reconsideration will save the city any money, as Roberts contended it would, is still an open question, said Robert Metzger, the data processing agency’s executive vice president.

“I really can’t tell at this juncture,” Metzger said. “There’s a zillion decisions that have to be made.”

However, the cost of paying and accommodating the panel of out-of-town experts has reached an estimated $140,000, up from original estimates of $80,000, Metzger said.

Metzger valued the telephone contract at $11 million to $12 million over 10 years, down from earlier estimates of $12 million to $18 million. Pacific Bell, the only company that provides interconnecting phone lines, will receive about $19 million for that service.

Three firms chose to drop out of the bidding competition after the council vote, with one, Bell South Communications, contending that ground rules would still ensure that Tel Plus won the contract. A fourth company, AT&T;, was later eliminated by the panel, leaving Tel Plus, Pacific Bell and NEC bidding for the contract.

NEC was chosen on the basis of “best and final” offers and oral presentations that had not been allowed during the first round of bidding.

The panel recommended that officials continue to seek bids from vendors for additional communications services such as voice mail.