Without inviting competitive bids, Kansas officials awarded Motorola a $50 million deal to build a new statewide emergency radio network by crafting it as an amendment to a contract signed 14 years earlier.
State law requires competitive bidding on major contracts, but officials at the Kansas Department of Transportation used an exemption to bypass that mandate.
The 2005 decision handed a big score to Illinois-based Motorola Inc. and enabled the company to prolong its supremacy over Kansas’ emergency two-way radio market.
State officials have agreed to extend or modify the 1991 contract at least a dozen times without competitive bidding, including a separate amendment that permitted upgrades to newer Motorola radios.
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Chuck Miller, procurement officer at KDOT, said the contract was competitively bid because price proposals were taken in 1991 before Motorola built the previous system. In that bidding, no other competitor submitted a complete proposal, officials said.
A spokesman for Motorola Solutions, the public safety communications arm Motorola spun off in 2011, would not comment on the Kansas contract.
State officials said they needed to stick with Motorola because of compatibility issues – concerns that another manufacturer’s equipment couldn’t tie in to Motorola’s proprietary dispatcher consoles or to its systems in Johnson and Shawnee counties. However, electronic bridges to connect disparate systems, also known as “gateways” or “patches,” have been available for years, and KDOT officials acknowledged using them.
Sedgwick County, however, severed its long relationship with the company in 2011 – and saved as much as $11 million – when Motorola’s biggest European competitor, Cassidian Communications, made a play for the county’s business.
Sedgwick County officials said tying into the state system would have forced them to buy Motorola equipment based on prices negotiated in the noncompetitive state contract and locked them into potentially costly long-term maintenance contracts with Motorola.
Bob Lamkey, who was Sedgwick County’s public safety director at the time, said the county overrode the recommendation of a consultant in part because its managers “value market competition wherever possible.”
Motorola’s proprietary features
There’s no evidence that the state deal resulted from cozy relationships. Rather, Kansas’ decision may serve as a reminder of the degree to which Motorola has reigned over the nation’s public safety radio market.
Back in 1991, competition for the Kansas contract was so weak that only Motorola submitted a complete proposal.
Thomas Kearns, a former St. Louis police officer who became a major account manager for Motorola rival Ericsson GE Mobile Communications in 1994, expressed concern about bias toward Motorola in a letter that year to the state attorney general, Bob Stephan, according to records obtained under the state open records law.
“It would appear ... that a tax-supported State of Kansas agency is desirous of perpetuating a proprietary vendor relationship,” he wrote, referring to a memo from the Kansas Highway Patrol to local law enforcement administrators advocating for Motorola.
The then-director of the state’s division of purchases was dismissive of Ericsson GE’s complaint in a May 12, 1994, memo. He wrote the contracting officer that, “in my opinion, the bottom line to the complaint from GE is that they could not, and did not, provide a responsive bid.”
By 2005, Motorola had built all but five of the nation’s statewide emergency radio systems, and few other companies were in position to bid on a project the size of the 80-tower Kansas system.
Department officials said they were unaware of any effort in 2005 to sound out whether Virginia-based M/A-Com Inc., the only other firm to have built a statewide system, might be interested in competing for the project.
The state already owned all but four towers needed for the system, a big cost saver. But Motorola had embedded proprietary features in the existing system, so it couldn’t interact with non-Motorola equipment.
While all equipment was to be replaced, keeping the system fully operational during a transition to a new, non-Motorola system threatened to pose big headaches, KDOT spokesman Steve Swartz said.
There was pressure from Washington to move quickly to build a system that would create “interoperability” – that is, connect as many first responders as possible, he said.
“It was a post-9/11 environment, and we were rolling out an interoperable public safety communications system for the entire state to use. We didn’t feel we could afford to experiment to see if it would work,” Swartz said.
Chuck Knapp, a former top official for the Kansas Department of Administration, also defended the decision to stick with Motorola. “We believe that the taxpayers have been well-served with a statewide emergency communications system that has proven itself time and time again” during tornadoes and other emergencies, he said.
KDOT did consider opening up Motorola’s contract to new bidding in 2013, but plans to call for bids didn’t get “communicated” to the agency’s purchasing department, Knapp said.
“It got so late in the year, we didn’t want to risk putting our communication system in jeopardy,” he said, so the agency put off competitive bidding until June 2015.
Ed Geer, communications systems administrator for KDOT, said the state has held down equipment costs because the contract provided discounted prices.
Motorola has sold its radios for as much as $7,500 apiece, but its prices have dropped as uniform standards for equipment design, known as P25, have taken hold nationally. The standards have brought double benefits: enabling all brands of radios to interact and encouraging competition that drives down prices.
However, even after the standards took hold, Motorola sold equipment with proprietary features, including its own version of encryption for secure communications, priced at a few dollars per radio. Kansas is among several states that bought Motorola’s encryption, which Geer dubbed “poor man’s encryption,” rather than the P25 version that costs several hundred dollars.
The problem is that Motorola’s encryption won’t work with other radio brands. Experts say its use could complicate communications in fast-moving investigations of suspected narcotics traffickers or terrorists that involve multiple state and federal agencies. As a result, recipients of U.S. Department of Homeland Security grants for new radio systems are now required to buy the P25 encryption feature for any radio outfitted with a proprietary version.
The Motorola system that Kansas bought in 2005 was billed as meeting P25 standards, but the contract called for the state to buy all of the first 1,947 radios from Motorola. All but 254 of the radios were models averaging more than $4,000 apiece. Radios that could perform the same functions were available for significantly less money.
Motorola’s deal has the potential to grow in value if local jurisdictions elect to tie into the network. Geer said that he and other department officials have persuaded about half a dozen counties to join the system, which serves numerous state agencies including KDOT, the Kansas Highway Patrol, the Kansas Bureau of Investigations, the Kansas Adjutant General’s Department and the Department of Wildlife, Parks and Tourism. EMS providers, local law enforcement, rural fire departments, hospitals, schools and local transit agencies also use the system.
Sedgwick County opted not to be part of the statewide system, in part because the state’s contract had not been opened to other bidders for years.
In a June 2011 e-mail to commissioners, Lamkey, the former public safety director, also said that joining the state system would have “some significant downsides,” including that the county would have to depend on the state to maintain the equipment and finance future enhancements. The county also would have to pay “nominal” annual fees for each radio on the network.
The county awarded Cassidian Communications, a subsidiary of aerospace and electronics giant Airbus Group, a contract for a new countywide digital radio system projected to cost $19 million to $23 million during its 15-year life. Motorola bid $29.8 million to $30.3 million, while a third vendor, Florida-based Harris Corp., bid $31.6 million. The county’s deal with Cassidian ended up costing just less than $19 million.
Cassidian also priced about 3,600 portable and vehicle-mounted radios for the Sedgwick County system at $13.5 million – $10.8 million if the radios were purchased when it was built.
Motorola put on a full-court press over the county contract, Lamkey said.
“In the world of emergency radio systems, Motorola has been the big dog for a long time,” he said. “Cassidian was really trying to get into that marketplace.”
The county hired Louisiana-based Tusa Consulting Services to provide technical assistance in choosing a bidder.
Tusa recommended Motorola’s bid, even though it was as much as $10 million more.
A Motorola lobbyist pressed hard to sway county officials to tie into the statewide network, citing the consultant’s recommendation. The lobbyist, Tom Bruno, also told a county commissioner that he could arrange for Geer, the communications systems administrator for KDOT, to meet with him and describe the merits of Motorola’s statewide system, according to e-mails obtained under the Kansas Open Records Act.
Asked about Bruno’s pitch, Geer said, “That was nice of him.”
Motorola would not comment on the Sedgwick County contract.
Nick Tusa, president of the consulting firm, said in e-mail exchanges that his firm ranked Cassidian’s initial proposal “dead last” because Cassidian had “absolutely zero experience” in designing a P25 system with simulcast capability – meaning that a commander could simultaneously broadcast the same message over multiple radio transmitters.
Tusa said his firm agreed to help the county negotiate a deal with Cassidian but only with county authorization to require a “solution more technically in line” with the project specifications.
He said the county took “a leap of faith” in dealing with the European firm, but it appears the network will work.
Lamkey said that the consultants “felt that there was risk involved in not going with Motorola,” but they expressed opinions, rather than offering data. Every time he “asked the hard questions about capability and capacity,” Tusa’s team acknowledged that Cassidian “could do that,” Lamkey said.
When it became clear that Cassidian was on the verge of winning the competition, Motorola offered to match Cassidian’s price, county officials said.
“Motorola came back, and they basically offered us less service for the same price. What they were trying to do was maintain our business but not give us the product that we were asking for,” Lamkey said.
In an e-mail to county commissioners at the time, he wrote: “I certainly understand ... Motorola’s desire to retain our business – they are a good company, but I believe we have done our homework, understand what our needs and risks are – and that the bid board recommendation is informed and fair.”
“We got good service and support from Motorola over the years,” Lamkey said. “But it’s about getting the best value for the taxpayers’ dollar.”
Cassidian, whose website boasts that it produces “the industry’s only true nonproprietary P25 network offering,” said in a statement that the platform it sold Sedgwick County “is compatible with components from multiple vendors and costs significantly less than the competing system.”
The company said that it had successfully completed the switch to its system by February. Kim Pennington, director of 911, said there have been a few kinks with audio cutting out on Motorola radios. Cassidian engineers and Motorola staff members are working on the problem, she said.
“I need it fixed before it becomes a big problem,” she said last week.