For the second time in a year, the FBI’s attempt to replace its 30-year-old two-way radio network could be stalled because of accusations that the bureau is skewing its bid solicitation to favor Motorola Solutions Inc., the emergency communications industry’s dominant player.
Last year, the bureau scrapped a plan to hand Illinois-based Motorola a sole-source contract worth up to $500 million, including upgrades for other law enforcement agencies, after four competing vendors filed protests.
Now the FBI has sought competitive bids for a contract limited to modernizing its own network at a cost of about $200 million, but the action is still drawing allegations of bias from Motorola’s biggest rival, Harris Corp., which has formally protested. The conflict offers the latest evidence of how difficult it will be to break one company's market power over a multibillion-dollar business underwritten solely by taxpayers.
It also puts the FBI in an awkward spot, since the bureau sometimes is asked to investigate allegations of antitrust abuses, said an executive of RELM Wireless, a small, Florida-based radio manufacturer that protested last year’s proposed sole-source deal.
FBI officials who “are supposed to be protecting us from monopolies are playing into the hands of a company that actually has a near monopoly in the public safety radio market – Motorola,” said Tim Vitau, RELM’s vice president of sales and marketing.
The guys who are supposed to be protecting us from monopolies are playing into the hands of a company that actually has a near monopoly in the public safety radio market – Motorola.
Tim Vitau, vice president of sales and marketing, RELM Wireless
Illinois-based Motorola Solutions has consistently captured more than 80 percent of the state and local emergency radio market and has outdistanced its rivals in the federal market as well. In a series of articles over the last year, McClatchy described how Motorola’s juggernaut has led to large, sole-source and biased contract awards, propped up radio prices and outfitted agencies with proprietary equipment that impeded a post-Sept. 11 push to ensure that all emergency radio brands are built to a set of industry standards and can interact.
A recent audit by the inspector general for the Department of Homeland Security found that, nearly a decade after the Sept. 11 Commission emphasized the need for first responders’ radios to interact, federal emergency personnel’s radios still encounter problems.
The FBI’s dilemma is that it wants its agents’ radios to be able to connect with all of the thousands of law enforcement agencies nationwide. But many state and local systems use older Motorola equipment with proprietary designs that cannot interact with other manufacturers’ products, meaning that Motorola’s rivals cannot meet the bureau’s requirement.
In a protest filed late last month, Harris alleges that the FBI’s May solicitation for bids “essentially duplicates its prior failed effort to sole-source its radio equipment contract to Motorola.” McClatchy obtained a copy of Harris’ protest.
(The FBI bid offering) restricts competition without written justification by specifying Motorola brand-name features and wrongfully denies Harris a fair opportunity to compete.
Virginia-based Harris asked that the Government Accountability Office direct the bureau to halt its procurement until the protest is reviewed.
The FBI’s new solicitation offers a five-year contract as part of a $3 billion tactical communications contract covering agencies within the Department of Homeland Security and administered by the U.S. Secret Service. The first year’s price would be under $22 million, but the bureau would then purchase more than 8,000 portable radios for agents to carry and another 18,000 for their vehicles in stages over the ensuing four years.
Harris complained that the bureau’s new bid solicitation isn’t consistent with the terms of the Homeland Security contract and also requires that:
– The contract be awarded to a single bidder this year, rather than reopening bids from all vendors for each of the planned purchases over four years of radios built to the industry standard, known as P25.
– All equipment must be capable of connecting with 20- to 30-year-old Motorola SmartNet and SmartZone systems, which have proprietary designs.
– All equipment must have the capability to interact with Motorola’s proprietary encryption product, when a government and industry group agreed on a standard, more sophisticated encryption system.
– Radios must be “dual band,” meaning they can communicate on two radio bands, precluding purchase of Harris’ multiband models that have more than two bands.
RELM, whose prices are a fraction of Motorola’s, doesn’t currently have a dual band radio model, said Bill Kelly, the firm’s executive vice president and chief financial officer. RELM expects to put its first dual band model on the market within a year and would like to compete in future years.
The FBI offered no immediate comment on its proposal.
Eric Torbenson, a spokesman for Motorola, said it “responded positively” to the contract offering.
Noting the FBI’s needs to interacting with many kinds of systems, he said, “Our proposal met all of those requirements.”