Motorola bias protest upheld; FBI urged to redo bid solicitation again


Responding to a vendor protest, the Government Accountability Office has concluded the FBI should for a second time scrap its planned acquisition of a new nationwide two-way radio system because its proposal amounts to a single-source award to industry giant Motorola Solutions, Inc.

Lawyers for the GAO, which serves as the referee for federal contracting disputes, concluded that two bureau radio solicitations estimated to be worth $335 million conflict with federal procurement rules and require equipment that only Motorola can produce.

They urged the FBI to cancel its solicitations, “consider alternatives” and reimburse Motorola’s largest rival, Virginia-based Harris Corp., for the costs of its protest.

The decision, dated Friday, is another embarrassment for the bureau as it wrestles with how to replace its existing, 30-year-old Motorola system containing proprietary features designed to interact only with the company’s own products. The development puts the FBI, which could be called upon to investigate antitrust issues in the same market, in the awkward position of appearing biased toward the firm that has for decades dominated the U.S. two-way radio industry.

A bureau spokesman declined immediate comment on its next course.

Motorola critics blame the company’s past use of proprietary equipment for slowing progress toward the post-Sept. 11, 2001, goal of ensuring that first responders across the country carry radios meeting uniform design standards so they can interact regardless of their manufacturer.

Troubles over the FBI’s contract started when, in 2014, the bureau disclosed plans to award Motorola a sole-source contract worth up to $500 million and insisted any new system must interface with legacy Motorola equipment. The proposal not only called for a new radio system for the bureau’s 56 field offices and the FBI Academy at Quantico, Va., but it also allotted as much as $170 million for other federal law enforcement agencies to upgrade their networks with new Motorola equipment.

After Harris and three other Motorola rivals formally protested, the bureau scuttled the solicitation. Its technology officials then spent months crafting two supposedly competitive solicitations and last May, they invited bids for radio equipment and infrastructure for a new FBI system.

But Harris protested again, contending the bureau’s plan to issue “indefinite quantity” contracts under which awards would be made to the winning bidder, as needed, over a five-year period violated federal procurement regulations designed to promote competition.

The arbiters noted that the bureau proposed the contract under the auspices of a huge tactical communication contract awarded by the Department of Homeland Security. It specified that the department “seeks to establish a multi-vendor approach” to building emergency radio networks under which all brands can interconnect.

The FBI's proposals not only are inconsistent with federal regulations, but 'also include restrictive, Motorola-specific requirements that have not been justified by the agency, as required.’

U.S. Government Accountability Office

Lawyers for the FBI said the bureau wants its agents to be able to communicate with any of the thousands of local law enforcement agencies nationwide, many of which still use older, proprietary Motorola equipment.

They suggested that Harris overcome that hurdle by paying Motorola to license its software. GAO lawyers rejected that option, noting that in another case, Motorola stated it would not license Harris because it’s a direct competitor.

A Motorola spokesman, Eric Torbenson, dismissed the ruling as focusing on "highly technical legal complexities."

The FBI has an unmet need for emergency communications equipment to carry out its mission, he said, and "we look forward to competing to meet that need after the agency determines a path forward."

Harris spokeswoman Victoria Dillon said in response to the ruling that the company “is primarily interested in fairness and a level playing field on which to compete with our solutions.”

In a series of articles published over the last 18 months, McClatchy has detailed how Motorola has gained a virtual monopoly over the multibillion-dollar market for two-way radios for cities, counties and states, often with help from government contracting officials. Motorola equipment is used in 19 of the top 20 cities, a McClatchy survey found, often through noncompetitive contract awards.

The company’s dominance over a market financed entirely by taxpayers has enabled the company to prop up prices for radios costing as much as $7,000 apiece and other equipment, increasing taxpayer costs by hundreds of millions, if not billions of dollars.

Greg Gordon: 202-383-0005, @greggordon2