Wednesday, September 29, 2010

$50 Million San Francisco Area Stimulus Public Safety Grant Begs for Thorough Review

San Francisco City Agency that Managed Selection Process for Motorola: Staffed by Ex-Motorola Employees 09/29/2010 San Francisco – The City of San Francisco has produced what is fast becoming regarded as the most controversial, problematic, and potentially illegal broadband stimulus award under the entire $7.2 billion federal program.

San Francisco City Hall
The local selection process which resulted in Motorola, Inc. (now Motorola Solutions, Inc.; NYSE: MSI) receiving a $50 million federal broadband stimulus grant on behalf of public safety agencies in the San Francisco Bay Area reveals questionable public procurement practices.

These problems are pointed to by the chief executives of the 2 largest governments in the region, as they call for suspension of the federal project award. It appears however that neither of the 2 current reviews of the award, 1 federal and 1 state, is scoped or resourced to examine the fundamental flaws evident in the selection process.

Largest Area Jurisdictions Call for Grant Suspension and Review by Sec. Locke
San Jose Mayor Chuck Reed and Santa Clara County Executive Jeffrey Smith petitioned U.S. Commerce Secretary Gary Locke, in a letter dated September 8, to suspend the award to Motorola. As first reported in the San Jose Business Journal (09/09) and in Urgent Communications (09/10), Reed and Smith called for the suspension “until concerns regarding the procurement and vendor selection process have been addressed and well understood.”  In words that should be red flags to any public official, the two wrote, “The process utilized to select the vendor for this project does not reflect our standard for accepted procurement practices.”

On September 3, Ken Gordon, the interim technology director in the Administration of Mayor Ronald V. Dellums in the City of Oakland sent a letter to the San Francisco city agency questioning the process as well. Thus, 3 large jurisdictions, with a combined population of some 2.2 million have challenged the federal grant.

Bay Area UASI 
Questioning is focused on an agency called the Bay Area Urban Area Security Initiative (UASI) and its Executive Director, Laura Phillips. The agency, a part of the Department of Emergency Management (DEM) of the City and County of San Francisco, cobbled together the selection of Motorola to act on behalf of the area governments and support of the firm’s application to NTIA through to the $50.593 million BayWEB project award issued on August 18th. The 94 awards released that day included for the first time 5 public safety projects, which, like the Motorola award, were all for 700 MHz LTE broadband emergency interoperable wireless networks.  

Phillips was a government affairs executive for Motorola, a position she held for the prior 2 years.  Previously she had served for 9 years as the tech services head of the City of Sunnyvale’s public safety agency.

A Semi-Autonomous Agency Staffed with Ex-Motorola Employees
UASI operates as a semi-autonomous unit within DEM and in the larger government headed by Mayor Newsom. In speaking with several line managers at City Hall, we could not find a City employee able to state if, or by whom, the BayWEB selection process of Motorola had been vetted or overseen for procurement compliance purposes.

In addition to Executive Director Phillips, 3 other key employees of UASI are also former employees of Motorola, the Schaumberg, IL based wireless equipment manufacturer generally seen by analysts as holding 80% of the public safety market in the U.S.  This group of 4 ex-Motorola employees together has over 45 years of service with the company.  Within UASI, Clement Ng, Jeff Blau, and Michelle Geddes form the core of the management team that had control of the day to day processes that resulted in the selection of the company. Phillips hired all 3 of the ex-Motorola employees following her appointment to head UASI by Newsom.

Questionable Procurement Process Detailed
The substance of the counter arguments made by Phillips in her response to Mayor Reed of September16, is that UASI conducted a “selection process” which had what she is calling a Request for Proposals (RFP) at its core.

Issued February 1, the 1.5 page document emailed to 8 vendor representatives that had responded to an earlier Request for Proposals (RFI) is not titled as an RFP.  The document does not at all meet the standards for detail, public notice, nor published evaluation criteria common to public sector procurement practice. Typically a RFP for a $50 million project would run into scores of pages, be legally advertised, have a pre-bidders conference, and be open to all interested participants.

The email was signed by Clement Ng, the ex-Motorola employee now at USAI. Several vendor and regional officials we spoke with described the Request for Information (RFI) issued on September 29, 2009 as being publically noticed, widely available, and detailed in scope.  “It was up on a City purchasing web site, clear as day,” one vendor rep told us “what they are now calling the RFP was never posted, nor even described as a formal document.  How can that be right, for a $50 million federal procurement?”

Michelle McGurk, Mayor Reed’s press spokesman and senior policy advisor, stated to us, “San Jose uses generally practiced procurement methods and have added additional process integrity standards, such as conflict of interest screening, transparency, lobbying periods, etc. For a multi-million dollar contract, the city would undergo a transparent RFP process with clear guidelines posted on our website and approval made in a public session of the City Council.” 

McGurk underlines the central point in this entire issue, “We are not sure what procurement guidelines were followed in the creation of this partnership with Motorola. The Bay Area BTOP proposal did not go through the Bay Area UASI Approval Authority for approval prior to or after submitting the grant proposal (San Jose is a voting member). The partnership is with another entity, the BayRICS Policy Group, which appears to be staffed by UASI staff.” 

Updates will continue to report on this troubling story.  We will update later today with recent information on: 1. The review of the project by a California state agency. 2. Federal and state public records requests filed by others and by ourselves. 3. One senior and independently elected official of San Francisco whose office has notified us of a recent determination that the BayWEB selection matter should be further looked at, via some level of examination in the local jurisdiction.

Broadband Round 2 Proposal Solicitation

The BayWEB Examination is our compendium of information on the project. We believe it is the most comprehensive such collection available. We have assembled links to all media coverage of the issue, to online documents secured by us from confidential and open sources, to documents secured by others and by this publication under federal and state public records filings, and to our own published reporting.

Note on awardee identification: The project grant was applied for by, and subsequently awarded to, the entity Motorola, Inc., formally traded as (NYSE: MOT). Motorola, Inc. was split into 2 new and separate companies, which both began trading on January 5, 2011.  The network infrastructure side of the business, all public safety equipment lines, and the network integration / management services divisions became Motorola Solutions, Inc. (NYSE: MSI). We have retroactively re-tagged our BayWEB stories with the MSI ticker symbol.
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