Kansas gives Motorola $50 million contact, based on bids from 1991

McClatchy Washington BureauMarch 30, 2014 

— 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., whose public safety communications arm was spun off as Motorola Solutions in 2011, 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.

Chuck Miller, a procurement officer at KDOT, said in a phone interview that 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 declined to 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 state Transportation Department officials acknowledged using them.

Motorola has dominated the Kansas radio market for as long as anyone can remember, with police, firefighters and medics across the state carrying its walkie-talkies.

There’s no evidence that the 2005 deal resulted from cozy relationships, but Kansas’ decision may serve as another reminder of the degree to which Motorola has reigned over the nation’s public safety radio market.

Motorola has built all but five of the nation’s statewide emergency radio systems and, in 2005, few other companies were in a 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, said Steve Swartz, a Transportation Department spokesman.

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.”

Chuck Knapp, a former top official of 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.

Geer 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 peddled equipment with proprietary features, including its own version of encryption for secure communications, priced at only 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 such as hunts for 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 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 a half dozen counties to join the recently completed system.

Officials in Sedgwick County, Kan., whose biggest city is Wichita, took a decidedly different tack. They severed a long relationship with Motorola in 2011 _ and saved as much as $11 million in the process _ after Motorola’s biggest European competitor made a play for the county’s business.

The county awarded a contract for a new countywide digital radio system to California-based Cassidian Communications, a U.S. subsidiary of French aerospace and electronics giant Airbus Group Inc., for a projected cost ranging from $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., which had acquired M/A-Com, bid $31.6 million.

Bob Lamkey, who at the time was Sedgwick County’s public safety director, said the county’s managers “value market competition wherever possible.”

Email: ggordon@mcclatchydc.com, dgruver@wichitaeagle.com; Twitter: @GregGordon2

Deb Gruver writes for The Wichita Eagle.

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