House Democrats Seek Probe of Motorola’s Radio Contracts

If allegations concerning Motorola's suspicious contracting tactics prove true, "millions of federal tax dollars may have been wasted," according to three members of the House.

by Greg Gordon, McClatchy News Service / July 16, 2014

Three senior House Democrats on Tuesday asked the Department of Homeland Security’s internal watchdog to investigate allegations, raised in a McClatchy series, that Motorola’s contracting tactics have led state and local governments to squander millions of dollars on the company’s pricey two-way emergency radio systems.

“If the allegations in the McClatchy articles are true, millions of federal tax dollars may have been wasted, and millions more are at risk,” Reps. Henry Waxman and Anna Eshoo of California and Diana DeGette of Colorado wrote Inspector General John Roth.
“We therefore ask that you initiate an investigation to determine whether the abuses described in the McClatchy articles occurred and if so, whether (Homeland Security) grants were involved,” they wrote.
The three members of the House of Representatives urged Roth to propose changes “to prevent a recurrence of these abuses” if the department’s grants are found to have helped finance any of the contracts in question.
Waxman is the ranking Democrat on the House Energy and Commerce Committee, while Eshoo and DeGette are the ranking minority members on the committee’s communications and technology subcommittee and the oversight and investigations subcommittee, respectively.
Motorola’s public safety arm, known as Motorola Solutions Inc. since the Illinois-based company split in two in 2011, has for years controlled an estimated 80 percent or more of the market for emergency communications equipment.
In seven stories published in March, McClatchy described how the company has used close relationships with state and local contracting officials, police and fire chiefs and county sheriffs, as well as an array of marketing strategies, to effectively lock in business in all but a smattering of public safety agencies in the nation’s 20 biggest cities. For many years, Motorola froze out rivals by embedding proprietary software in its equipment so it wouldn’t interact with other brands.
Motorola Solutions said in a statement that it “complied with applicable laws and regulations, and competes fairly for our customers’ business by offering them superior products and solutions.”
“We offer solutions and products that achieve cost savings for the taxpayer, improve safety for communities and enable quick implementation for local agencies,” the company said.
Motorola said that it has served public safety around the globe for more than 85 years, that it sells products that “enable seamless communications,” and that it is the company’s state-of-the-art technology “that has allowed us to maintain our customers’ loyalty.”
In their three-page letter, Waxman, Eshoo and DeGette recited McClatchy’s findings that state and local officials have handed Motorola noncompetitive contracts, used amendments to years-old contracts to acquire entirely new systems, or crafted bid specifications to Motorola’s advantage.
For example, the trio pointed to the Kansas Department of Transportation’s award to Motorola of $50 million to build a new statewide emergency radio network via an amendment to a 1991 contract with the firm. State officials exercised an exception to skirt a state law requiring competitive bidding.
The House members expressed concern about McClatchy’s report that jurisdictions have paid as much as $7,500 for Motorola radios, even when some of its competitors offered radios meeting the same specifications for a fraction of the price.
In addition, McClatchy reported that Alameda County, Calif., bought a Motorola master controller, or network switch, that contained proprietary features, effectively pre-empting competitors from bidding to build a new two-county network with neighboring Contra Costa County because their equipment couldn’t connect to the switch.
Waxman, Eshoo and DeGette asked Roth for an assessment of whether the Alameda-Contra Costa network has used Homeland Security grant money while insisting that all participating agencies buy Motorola equipment.
They also asked the inspector general to:
  • Explore whether, in light of McClatchy’s report that Motorola won a Mississippi contract for a statewide radio system by bidding $90 million less than a rival, the company has a history of submitting low bids to capture contracts and whether Homeland Security grant money has then been used to finance contract modifications after the deals are inked.
  • Identify all Homeland Security grants to state and local agencies that have selected Motorola as their vendor for public safety equipment and devices and specify whether those contracts were competitively bid.
  • Assess whether the Department of Homeland Security’s guidance to grant recipients is sufficient to deter the use of proprietary features in public safety communications equipment, such as Motorola’s encryption software that won’t interact with non-Motorola radios.

©2014 McClatchy Washington Bureau