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Motorola Solutions' monopoly on radio systems needs to end

Motorola Solutions' contract wins have been clouded by irregularities or allegations of government favoritism in numerous cities and states
By
April 3, 2014
motorola solutions radio

During the 9/11 attacks, firefighters and other rescuers were forced into rapid-fire, life-and-death decisions based on poor communications, contributing to the World Trade Center death toll. After the south tower collapsed, firefighters in the north tower were told to evacuate, but many did not hear the order because the radio channel they were using was overwhelmed, because they were on a different channel, or because they were off-duty rescuers who had responded without their radios.

Fast-forward to 2005 where San Francisco Sheriff, Warren Rupf, and Alameda Sheriff, Charlie Plummer, decided that because of the failures of communication during 9/11, they wanted to implement a new digital two-way radio system so that all of their first responders could talk to each other.

Unfortunately, Motorola Solutions stood in the way. Motorola had no interest in allowing for any competitive bidding process. Before the Sheriff’s could try to solicit bids for such a radio system, they were told that any plan must include the first $5.7 million going towards a master controller made by Motorola and any equipment must connect with the older, antiquated Motorola SmartNet II system. Steve Overacker, Contra Costa County’s telecommunications manager, summed up the situation:

 “It was already a done deal. . . . Nobody else could make their equipment compatible with (the) soon-to-be-obsolete Motorola equipment – nobody except Motorola.”

A seven-month McClatchy investigation found that local and state politicians around the country have helped Motorola secure an estimated 80 percent of all the emergency telecommunications business in America. The politicians help Motorola by giving them noncompetitive contracts, modifying years-old contracts to acquire new systems or by crafting bid specifications to Motorola’s advantage.

Cities Radio Contracts

The company’s contract wins have been clouded by irregularities or allegations of government favoritism in numerous cities and states.

1) In Kansas, state officials bypassed state competitive bidding requirements in 2005 with an unusual modification, which provided for a new, $50 million digital system. State officials defended their action by arguing that competitive bids were taken on the original system 14 years earlier. However, one city cut Motorola from its business. Sedgwick County severed its long relationship with Motorola in 2011 and saved as much as $11 million when Motorola’s biggest European competitor, Cassidian Communications, made a play for the county’s business.

2) In Chicago, city officials justified a noncompetitive, $23 million contract on grounds it would protect a $2 million investment in proprietary Motorola equipment, when the equipment’s actual value was $350,000, the city’s inspector general found.

3) In Dallas, Motorola has been dealing with controversy in recent years over the way it’s met city requirements for use of minority subcontractors. Officials declined to release the contract documents, forwarding a Justice Department letter stating that to do so would interfere with an FBI investigation into possible “public corruption, tax evasion and money laundering.”

4) In Iowa between 2009 and 2011, the state issued five solicitations for radio bid prices that each favored Motorola, one requiring that two knobs on the radios be exactly 19 millimeters apart, a parameter fitting only a Motorola radio. Due to this move, governments in Iowa have paid as much as $7,500 apiece for the Motorola models, when some competitors offer products meeting the same specifications for a fraction of its prices (such as in Europe for $500 to $700).

5) After Hurricane Katrina, Mississippi diverted $100 million in federal disaster aid toward a new statewide digital radio system and planned to build a second, $70 million, next-generation network that could flash data and videos via broadband to cops, firefighters and medics. Motorola captured both of Mississippi’s mega contracts, which promised to generate more than $300 million in sales, with initial bid prices so low that competitors were dumbfounded. Motorola locked up the radio project with a bid price of $221 million, $90 million below that of rival M/A-Com Inc. Despite the appeal of savings in Motorola’s bids, one of the new networks has been scrapped and Mississippi lacks the funds to operate the other. Mississippi state Rep. Tyrone Ellis summarized the situation by stating “This has been a disaster for Mississippi.”

6) In DuPage County, Ill., west of Chicago, a $7 million, noncompetitive contract with Motorola wound up costing more than $28 million.

7) California’s Riverside County awarded Motorola a $148 million contract for a new land-mobile digital radio system that was to be activated by July 2009. It’s been delayed by more than four years because of technical glitches, including busy signals on would-be emergency calls. The cost has risen to $172 million, said Kevin Crawford, the county’s information technology chief.

8) In cash-strapped Randolph County, N.C., EF Johnson bid $150,000 lower on a contract in 2011 with a package that included 200 more radios, but Motorola got the contract.

In 2004, a Sept. 11 commission recommended that the nation’s public safety community adopt measures to improve interoperability, meaning that all radios must interact no matter their manufacturer.

Yet, Motorola has continued to fight such interoperability. In Colorado, Louisiana, Kansas and other states, Motorola has found ways to insert software encryption that serve no purpose other than to not allow rival companies to interact with them.

chart-of-the-day-motorola-losses

It has gotten so bad that fire commanders in some cities carry multiple radios to multi-alarm blazes to ensure they could talk with every unit dispatched to the scene. Jeff Caynon, the president of Houston’s firefighters’ union, said problems with Motorola continue to this day. The city’s new $132 million Motorola system forced rescuers to resort during a blaze in May 2013 to use “hand and arm signals and cellphones as a reliable way to communicate.” Failures of Motorola handsets in recent years were blamed in part for two firefighter deaths in Philadelphia, two in Cincinnati and one in Prince William County, VA.

John Powell, a former chairman of a National Public Safety Telecommunications Council panel, criticized federal agencies for failing to put enough “teeth in those grant guidance documents” to ensure against proprietary features, such as Motorola’s encryption. He said that federal agency watchdogs have performed few compliance audits of state and local agencies.

McClatchy surveyed nearly 60 police, fire and sheriff’s departments in the nation’s 20 largest cities. Only San Antonio and the New York Police Department have bought large radio systems from a vendor other than Motorola over the last decade. In nine of the cities, Motorola won noncompetitive contracts, though some local and state governments have begun offering their agencies a choice of radios from multiple qualifying vendors. “Motorola is, in practical terms, a monopoly, and they control the market for the purpose of keeping the pricing very high,” said Jose Martin, president of Power Trunk, a subsidiary of a Spanish firm, Teltronic, which is trying to break into the U.S. public safety radio market.