FirstNet Hires Friends, Skirts Competitive Bidding

The National Telecommunications and Information Administration says FirstNet officials wanted to get off to a quick start, but lacked contracting staff, so the administration arranged the hiring, turning to some of the few people knowledgeable about the latest broadband technology.

by Greg Gordon, McClatchy News Service / September 26, 2014

As a new federal agency set out in the summer of 2012 on the mammoth task of building a nationwide wireless communications network for more than 4 million emergency responders, an eyebrow-raising pattern took shape.

The First Responder Network Authority was stacking its ranks with more than 20 board members, staffers and pricey consultants who were familiar faces to the agency’s newly appointed chairman, Samuel Ginn, or to a longtime associate who joined him at the agency.

All had worked or consulted for the British firm that Ginn had chaired, the telecom colossus Vodafone, or for AirTouch Communications, which Ginn headed in the 1990s before Vodafone bought it.

Most of the first technical consultants to serve the new agency, known as FirstNet, also were affiliated with a firm specializing in the latest wireless technology, 4G Partners LLC.

“The project definitely has that ‘getting the band back together’ feel to it,” David Brode of 4G Partners wrote in an Internet posting in January 2013.

The problem is that in rounding up the band, FirstNet officials cut corners and may have violated the law, internal agency documents obtained by McClatchy show.

In creating the agency and committing an initial $7 billion toward its launch, Congress had specified that any outside consultants must be hired “in a fair, transparent and objective manner.”

In fact, none of the initial technical consultants was hired through competitive bidding.

Rather, at least 35 of them were retained over the agency’s first eight months under sole-source contracts awarded another Commerce Department agency to a management consulting firm with no background in emergency communications, department officials say. The company, Workforce Resources Inc., is owned by minority women and thus qualifies for preferential contracting treatment.

In addition, about half of initial hires were made months before the FirstNet board passed a resolution in December 2012 formally authorizing the issuance of contracts for services.

McClatchy uncovered the hiring pattern in a review of scores of documents, through queries to the agency and from interviews with contractors.

The Commerce Department’s National Telecommunications and Information Administration says that FirstNet officials merely wanted to get off to a quick start. But FirstNet lacked contracting staff, so the telecommunications agency says it arranged the hiring and turned to some of the few people knowledgeable about the latest broadband technology.

According to the documents, two of the consultants, Clint Cooper and Peters Suh, drew fees of $300 per hour. That’s hardly the highest rate paid by the U.S. government, but it might not sit well with the cops, firefighters and medics that the network will serve. For example, the Bureau of Labor Statistics says the median annual salary for a police or sheriff’s patrol officer who might put his life on the line is around $56,000 — a little over $200 for a full day’s work.

If Cooper and Suh worked 40 hours a week — and the documents suggest that a number of the consultants were working full time — their annual compensation would be $600,000, exceeding President Barack Obama’s salary by half.

At least four other FirstNet consultants were paid at annualized rates above $400,000, and by the spring of 2013, 35 consultants were collecting an average of $172 per hour — a yearly rate of more than $350,000, the documents show.

The consulting arrangements have drawn the attention of Commerce’s internal watchdog and threaten to put a stain on the rollout of an agency considered vital by the nation’s first responders. The Ginn associate who oversaw the early hiring, Craig Farrill, has resigned from his FirstNet board seat.

The hope is that FirstNet can address many of the ills plaguing communications among police, firefighters and medics that surfaced during rescue operations after the terror attacks of Sept. 11, 2001, and Hurricane Katrina in 2005. It seeks to build a network sturdy enough to survive disasters and that initially can deliver high-speed data and videos to first responders and, eventually, reliable voice transmissions. Such a network could overcome barriers to two-way radio connections caused by proprietary equipment and fragmented frequencies.

FirstNet was created as an independent agency, but McClatchy’s questions about its operations were steered to the National Telecommunications and Information Administration, headed by Assistant Commerce Secretary Lawrence Strickling, whose Chicago home is not far from Obama’s.

In a statement, the agency said that FirstNet board members, especially those who had built wireless networks around the world, recognized the need for “support from those with the technical know-how and expertise to get the job done right and as expeditiously as possible.”

The consultants were paid market rates for “specialized, high-level services,” the telecommunications agency said.

Because there is a “limited pool of talent that has experience with planning and deploying a national broadband network,” some of the consultants who were retained “had previously worked with board members in different companies,” it said.

What’s unclear is whether the pool of experts needed to design a new kind of public safety broadband network is so small that agency officials had little choice but to tap most of those who were hired; whether agency officials simply turned to people they knew; or whether the consulting lineup reflects a particular agenda.

The agency declined to comment on the legality of the consultants’ hiring because the office of Inspector General Todd Zinser is still reviewing the matter.

Clark Reid, a spokesman for the inspector general, said only that an audit, which Ginn requested in October 2013, is still underway.

In response to McClatchy’s inquiries, Commerce Department officials said that FirstNet developed a formal program over the last 10 months for ensuring legal and ethical behavior by its employees and board members and, without providing details, said the agency has “taken a number of steps to address compliance risks.” An “internal risk assessment” also was begun early this year, it said.

With big money at stake for commercial cellular companies, consultants and other contractors as FirstNet’s budget grows in the coming years, Commerce Department officials “understand the unique risks that FirstNet faces” and will take steps “to ensure the highest level of integrity” in its operations.

Secrecy shrouding the consulting arrangements fueled enough suspicion that, in April 2013, a Midwestern sheriff serving on FirstNet’s board delivered searing criticisms at a public meeting. Sheriff Paul Fitzgerald of Story County, Iowa, demanded information about the consulting contracts. He requested a formal review of their propriety and whether senior agency officials had conflicts of interest, vowing that he wouldn’t be muzzled.

Fitzgerald also complained that FirstNet officials with ties to the cellular industry had “sidelined” the four board members representing public safety agencies, as well as a separate, five-member Public Safety Advisory Committee that was supposed to be consulted, while the high-priced experts drafted a 400-page agency “plan.”

The telecommunications agency said that the consultants were merely preparing a draft “conceptual design document to be used as a starting point” in planning the network, and that FirstNet invited input from thousands of public safety representatives at 30 “stakeholder engagement events” across the country last year.

Since Fitzgerald lit a fuse, the tiny agency has faced more tumult.

Ginn, 78, who came out of retirement to lead the new agency, resigned in late May, as did General Manager Bill D’Agostino, also a former Vodafone executive. Farrill, the board member and former Vodafone AirTouch chief technology officer who served as FirstNet’s acting general manager during its early hiring of consultants, resigned on Aug. 20.

In an attempt to restore stability, Commerce Secretary Penny Pritzker reshuffled the board early this month, naming five new members, including Houston’s mayor, a former Vermont governor and a Minnesota sheriff. She ousted Fitzgerald and former New York Deputy Police Chief Charles Dowd, refusing to reappoint them. Both had helped sway Congress to set aside a block of prime bandwidths for the new network on the federal wireless spectrum.

Reached in Iowa, Fitzgerald declined comment except to say in a statement: “I did what I thought was best for the public safety community. I guess that wasn’t appreciated.”

Details of exactly how the agency mobilized its initial lineup of 40 outside consultants are somewhat murky and confusing.

Agency documents show that at their first meeting, FirstNet’s new board members were handed copies of a 96-page draft “startup plan.” It’s unclear how that document materialized.

In October, consultant David Brode said in an Internet posting that “lately, I’ve been consumed by the challenges of FirstNet.”

Reached in Colorado by phone, Brode said that he had consulted through Washington-based Workforce Resources.

That firm’s initial contract, however, didn’t start until a month later.

Another document, dated Nov. 12, 2012, thanked several consultants for their efforts, including Marc Levante. Reached in California, Levante said he also was retained by Workforce Resources, whose first contract began on Nov. 15, 2012.

The telecommunications agency declined to address how some consultants began work before Workforce Resources signed its contract.

Its sole-source, $4 million deal was issued by the National Institute of Standards and Technology through a Small Business Administration program that helps disadvantaged companies.

On Nov. 17, 4G Partners co-founder Clint Cooper sent FirstNet officials an email offering contact information for the agency’s new “contracting team,” listing the names of 15 consultants affiliated with 4G.

Cooper did not respond to requests for comment.

Charlene Wade, Workforce Resources’ president, said she had not previously met Cooper or the other consultants, and her firm had no background in emergency communications.

In a brief phone interview, she said that officials from the standards institute “contacted us about taking on the contract for them.”

Prospective consultants “were referred to us by people who had worked on FirstNet efforts previously,” Wade said, and the first consultants brought aboard then “referred people to us.”

After the expenditure of $2.6 million, the six-month contract with Workforce Resources was terminated in March 2013, and the firm was awarded a new $8.4 million contract extending its services until the end of the year, the telecommunications agency statement said.

A summary of that contract on a federal website said it was a “follow-on contract” and thus could be awarded on a sole-source basis.

The telecommunications agency said its officials and leaders of FirstNet believed that shifting to another contractor would “seriously injure FirstNet’s early planning efforts.”

Wade said the firm’s FirstNet-related consulting force grew to 35.

Presented with more specific questions, however, she wrote in an email that her firm’s legal counsel had advised “that I not answer any further questions regarding the FirstNet project.”

The brouhaha over FirstNet’s alleged exclusion of public safety officials appears to have had an impact.

Harlin McEwen, a former Ithaca, N.Y., police chief who chairs the Public Safety Advisory Committee, said that “after a slow start,” consultation is improving. The panel’s five members were invited to last week’s first meeting of FirstNet’s revamped board, he said.

Whether the agency can succeed, however, is a subject of debate.

With two years already elapsed on a 10-year spectrum license from the Federal Communications Commission, agency officials say they’re making progress and are beginning consultations with each state over how it can join the network.

The task, though, is daunting. FirstNet aims to build a network, likely costing at least $20 billion, using the latest broadband technology, known as 4G LTE (for fourth generation, Long Term Evolution). The goal, apparently, will be to meet performance levels required for current public safety radio systems, meaning that transmissions must work 99.9999 percent of the time, leaving just 31.5 seconds of down time per year.

Some question whether it all makes sense.

Ted Rappaport, founding director of New York University’s WIRELESS research center, said that the FirstNet concept “seems flawed” from a business standpoint because the federal government will build the network and then saddle states with the cost of its operation and maintenance.

Some states have threatened to exercise their rights to “opt out” and build their own systems to federal standards adopted last year.

“Since it’s a new business model, there are potential liabilities for all parties,” Rappaport, a professor of computer science and computer engineering, said in a phone interview. “Will this become a government albatross at the federal level or individual state level? Who’s going to have to pay for it if it doesn’t work or if there are competing interests that marginalize the quality of public safety?”

He said that many public safety officials “have valid concerns that this use of government funding may not be delivering the highest and best value for what is needed by first responders to save people’s lives and keep the peace.”

©2014 McClatchy Washington Bureau