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Questions regarding the State of Illinois’ ongoing contract with Motorola for digital trunked radio equipment and service continue to mount.  I received a copy of this open letter to the State’s Budget Director from the government official who wrote it.

The following supporting documentation was also received.

– The Letter –

Mr. David Vaught

Illinois Budget Director

Dear Sir,

In September 2010, Illinois Central Management Services (CMS) announced a public hearing to justify a “new” sole-source contract with Motorola for “air time” services and subscriber radios to continue the use of the STARCOM21 state-wide Project 25 (with proprietary features) radio system. The very nature of Project 25 is to have an open standards that increases competition and lowers cost (http://project25.org/).

At that hearing, the proposal on the table was for a 10-year contract for $207,864,687 (or $207,864,682 depending on which paperwork you see). There were acrimonious letters of support from various entities around the state in support of the STARCOM21 system. Whether the system is “good” or “bad” was not the question. What was supposed to be discussed is if it is economically infeasible to do anything else but to stay with Motorola. No options or alternatives were sought, according to the public record.

With an exact amount being mentioned, you would think it would be a simple question:
“What goods and services will be received by the state if it gives Motorola $207+M over the next 10 years?”

But no, that question was not allowed to be asked or answered. After FOIA requests and reviews by the Illinois Attorney General’s Office of the Public Access Counselor, it was determined, initially, that all documents mentioning specific pricing were protected from public view since it was still in draft form, still under review, etc.

Later, there was an admission by Illinois Central Management Services that the September 2010 hearing documents were flawed and that a second hearing would be scheduled.

In the interim, a public meeting was held on January 13, 2011 by the Illinois Procurement Policy Board (IPPB), an oversight and advisory arm of the state. In that meeting, it was explained that CMS made some mistakes. The minutes of that meeting revealed documentation of a telecommunications expense for sole source purchasing for $207,864,687, after the “flawed” CMS hearing in September. It was also revealed that the Motorola sole-source contract would be split, meaning, the state would continue to have a sole-source relationship with Motorola for “air time” on the Motorola-owned statewide radio system, but would allow open and competitive bidding for Project 25 (the national standard for digital public-safety voice readio) subscriber radios. Instead of $207M, it was stated that the contract would be about $67M, but there was still discussion from the CMS representative, Mr. Nondorf, about sole-source acquisition of radios from Motorola. Once again, conflicted and confusing information from the state.

After yet another FOIA request to the IPPB, it was requested, once again to answer the simple question:  “What goods and services will be received by the state if it gives Motorola $207+M (or $67M) over the next 10 years?”

This FOIA request was delayed well beyond the 60-day guideline for the AG’s Public Access Counselor’s clearance guideline.

On April 20, 2011, CMS held the second hearing. This time, the issue was a sole-source agreement to continue to use the Motorola STARCOM21 system for another 10 years. There was no discussion allowed on the open-bidding nature of the Project 25 (non-proprietary) subscriber (radio) units. While there were once again letters of support, there were other letters against, and only one person speaking about the contract on either side of the issue.

Attached is a letter asking 10 specific questions, which thus far are unanswered by CMS. (STARCOM SOLE SOURCE APRIL 20 2011-2.pdf)

On April 21, 2011 (a day after the second hearing), the AG’s PAC office reversed itself and forced the release of the previous $207M proposal from Motorola (Page 1-2-4.pdf and Page 3.pdf attached).

One of the most disturbing issues relates to the duration of the contract as proposed:

* One of the excuses not to go to competitive bid is that it would take 1-2 years to develop an RFP, analyze, and award a contract. Well, why is this a 10-year contract then? Why not make it 3-5 years, and do the “due diligence” to make sure Illinois taxpayers are getting the best deal possible?

* Since the original contract was initiated in 2001 with a 10 year agreement, and the renewal-non-renewal-new contract starts September 2011 through the Fall of 2021, this would give Motorola a 2-decade lock on the system with little possibility for competition (or even a regional non-Motorola system connection to STARCOM21).

* Illinois law limits contracts to 10 years. Regardless of the bureaucratic wordsmithing, this is a renewal (or extension) by all definition, not a “new” contract. How is this justified?

In the meantime, Motorola has (and is) crafting agreements with county and local agencies with a wide berth of fees and options. Some are promised (from the vendor) several years of “free” monthly air time (like a December 2010 suburban county contract  – and I wonder what the current $53 or $30 per month users feel about that). Some local police agencies are offered (from the vendor) a guaranteed freeze of monthly rates – regardless of the forthcoming negotiation monthly fee.

The state did not competitively bid for multi-band, multi-mode radios, but has looked the other way to give cover to local governments to use “state purchasing” for the new APX-7000 and EX (ruggedized) radios. I’m sure Thales, Harris, and Datron would like to sell radios, but since county and local governments point to CMS to avoid competitive bidding for multi-band, multi-mode radios, the antics continue, and Motorola continues its market dominance. Maybe, just maybe, Motorola will have to put the APX and EX out there for competitive bid.

A suburban county ETSB board waived all bidding under their own Procurement Ordinance for subscriber radios “assuming” the APX is/was competitively bid at the state level, thus on “state purchasing” agreement. There is conflicting information about “state” discounts on the APX depending on what public documents your read, from NO discount to 20% discount – but still, the radio never listed as a result of competitive bidding at the state level. Questions to CMS have gone unanswered.

The current contract is a little frustrating, maybe by design. After searching Illinois government websites, I cannot find the STARCOM21 Master Contract TCVS-1500 – you can only get it via the vendor. I have that contract. It calls for the XTL and XTS series of radios. The last change to the STARCOM21 Master Contract was December 2008. The new Motorola APX-7000 radio (multi-band, multi-mode) was not released yet. When I asked CMS if the APX radio was on “state contract” I was referred to the vendor, Motorola.

So….let’s say GM sells gasoline-powered ½ ton pickups to the state and they beat Ford and Dodge when the state bid out the job in 2001. GM comes out with a diesel cement mixer in 2009 and both the state and local governments start buying GM cement mixers under the existing contract. GM tells its customers that it can now sell cement mixers to local governments under “state bid”, you know, CMS says “just see the vendor and they’ll give you a good deal”, because in the end, they are just trucks, right? I’m sure Mack and Freightliner would like to have known cement mixers are now in play!!! But, no, the state won’t go out for bid for cement mixers since they “have it covered”. Same for multi-band, multi-mode radios. Moto just starts selling them under “state contract” and Thales, Harris, and Datron are aced out of state purchasing.

So, we are staying tuned for the final run-up to the renewal-non-renewal-new-extension contract that might be for $207M, $114M, $67M, or $50M….spin the wheel and guess how high the monthly user fees will rise. Also, watch for the posturing (from the CMS bureaucrats and Motorola) to further suppress competition under the cover of open bidding for the subscriber units.

Motorola is being scrutinized for multiple sole-source, no-bid contracts through the US.

http://www.examiner.com/homeland-security-in-chicago/homeland-security-and-motorola-a-cocktail-for-scandal-chicago

http://articles.chicagotribune.com/2011-01-26/news/ct-met-radio-contract-new-20110126_1_dupage-deal-radio-system-emergency-radio

http://blog.tcomeng.com/ (See “Appearance of Impropriety” series.)

The US House is especially looking at market dominance of Motorola for products that are not proprietary, but are “standards based” systems and equipment. The Project 25 digital voice standard was supposed to open up competition and drop prices. With dwindling public funds, competition should be used as a tool to reduce cost. In the case of STARCOM21, Illinois will be guaranteed 20 years – 2 decades – of NO competition. (See attached letter from the US House to FCC Chairman on this topic.)

If I can provide any further information, most of which is in the public record, please let me know.

Respectfully,

Executive Director Steve Rauter,
Western Will County Communications Center

Email: SRauter@WESCOM-9-1-1.org

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