Thursday, December 16, 2010

Alert: Motorola Confirms Inspector General's Audit of $50 Million BayWEB Broadband Stimulus Grant

First OIG Announced Audit Under Entire Broadband Stimulus Program; NTIA Unaware of OIG Action 12/16/2010 - (Updated 11:20 PM) San Francisco - Company and federal officials have confirmed that the $50 million BayWEB broadband stimulus award to Motorola, Inc. (now Motorola Solutions, Inc.; NYSE: MSI) is now the subject of an audit by the Office of the Inspector General of the U.S. Department of Commerce (OIG).

BayWEB thus becomes the first and only broadband stimulus award in the nation to be specifically targeted for an audit by a federal inspector general, or to be publicly announced as the focus of such an inquiry.

Inspector General Todd J. Zinser, U.S. Department of Commerce
In excess of $7 billion has been awarded to date, although little of it has been expended, under one of the signature technology funding programs within the Obama Administration's $787 stimulus effort. The program is jointly managed by the Agriculture Department's Rural Utilities Service (RUS) and the Department of Commerce's National Telecommunications and Information Administration (NTIA). BayWEB is a grant solely issued by NTIA for one of the few federally financed 700 MHz LTE public safety networks.

News of the audit was first broken by business reporter Eli Segall of the San Jose Business Journal this afternoon.  Segall quoted OIG spokesperson Randall Popelka as saying, "There is apparently an irregularity in this grant, and we look at irregularities."

Popelka confirmed for this publication early evening today that the OIG audit of BayWEB is underway, and the reporting by Segall was fully accurate.

Motorola's authorized spokesperson for the firm's Government and Public Safety section, Mr. Matthew Messinger, stated to this afternoon that "we are aware of the audit."  Continued Messinger, "the people we are talking to within Motorola say this is customary."

When asked if the OIG's audit was ongoing, the Motorola spokesperson replied, "We are aware the audit is being done."

When reached early evening today, NTIA spokesperson Ms. Moira Vahey was unaware of the audit action by OIG, stating the agency would have a response comment Friday morning.

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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