The broadband deal that Motorola secured in Harris County, Texas, offers a case study in how the company almost magically avoids head-to-head bidding on many contracts.
When $6 million in federal grants to the Port of Houston became available for what would become the nation’s first pilot emergency high-speed broadband network, Motorola already had an inside track. The county that envelops Houston had a history of awarding sole-source radio contracts to the industry leader.
But the pilot project, in the latest technology for delivering data and videos to first responders, seemed an obvious time to solicit proposals from all comers.
Apparently, officials of the nation’s third largest county didn’t think so.
At a conference in May 2011 outside Austin, Texas, Harris County systems architect John Chaney stood to take questions about the project. Moments later, the man built like a football lineman made a comment that dropped jaws.
“I would never have thought Motorola could do this, but Motorola came in and told me such a great story, I couldn’t not go with them,” he said, according to two attendees, who were not authorized to speak for the record.
In the audience were representatives of Motorola competitors who didn’t get a chance to tell their stories.
A county attorney winced and shook her head, then tried to explain why the contract was open and fair under Texas law, even though no other company was invited to bid, the attendees said.
In a recent phone interview, county officials contended that the $7.5 million contract (the county put up 20 percent of the money) was competitively bid because it was added to a two-way radio contract awarded by the Houston-Galveston Council of Governments that Motorola won competitively in 2007.
Piggybacking on competitively bid contracts in different jurisdictions – even in other states – has become an accepted mechanism for local governments to bypass potentially lengthy and contentious procurement processes. The Houston-Galveston contract also was used by Fort Worth and Washington, D.C., to award Motorola deals worth tens of millions of dollars without taking bids from other vendors.
However, the Houston-Galveston contract was for radio communications, not broadband data, making it more of a stretch for Harris County.
No U.S. agency had ever built an emergency broadband LTE network.
Shing Lin, Harris County’s director of mobility services, said that broadband technology had been added to the Houston-Galveston contract, so using it to buy a public-safety broadband network was legitimate.
Robert Schassler, Motorola’s executive vice president, echoed that explanation.
Lin said that as part of the deal, Motorola guaranteed that Harris County’s network would be revised where necessary to meet the ultimate design standards of the First Responder Network Authority, the federal agency assigned to build a nationwide emergency broadband network.
In the fall of 2011, Florida-based Harris Corp. and another cellular broadband player, Alcatel-Lucent USA, filed formal protests over the contract award with Texas Attorney General Greg Abbott.
To buy “wholly new technology” without inviting bids is “doing so illegally to the detriment of taxpayers,” Steve Marschilok, president of Harris’ Public Safety and Professional Communications unit, wrote Abbott.
Marschilok also said that other cities and counties were proposing to purchase broadband networks via the old Houston-Galveston contract, according to a copy of the protest obtained by McClatchy.
Perhaps as a result of those complaints, Harris County elected to invite bids for the network’s eventual expansion to cover the full county, a project that could be worth much more money.
But Motorola now had new advantages. The company not only had put together the pilot network, but it also was operating the system’s $3.3 million core, stationed at Texas A&M University. A core’s operator usually writes software rules determining what kind of equipment can work with a network and, perhaps more importantly, which equipment can’t, government and industry officials said.
When Harris County invited bids for the larger project, only one company responded: Motorola.
Motorola’s Schassler said that the county has yet to move forward with expanding the network.