The state of New York on Friday informed Tyco Electronics M/A-COM that the company has defaulted on its contract to build a statewide LMR network and ordered that “significant deficiencies” need to be remedied by the middle of October for the $2 billion deal to remain in place.

In a letter sent Friday, New York CIO Melodie Mayberry-Stewart wrote that testing of the first buildout area in Erie County and Chautauqua County demonstrated the system performance to be “unsatisfactory and unacceptable,” even though M/A-COM had certified the network as being ready on two occasions.

M/A-COM will be given 45 days to rectify the 19 deficiencies identified during July testing, after which the state’s Office for Technology (OFT) again will test the system. Although the letter was sent Friday, the 45-day period began when M/A-COM received the letter—today—so the company has until Oct. 16 to fix the problems, OFT spokeswoman Angela Liotta said today during an interview with Urgent Communications.

M/A-COM disputed the OFT claims, stating in a press release that the company “has met or exceeded contractual requirements for the project and is prepared to vigorously defend that position.” During an interview with Urgent Communications today, M/A-COM spokeswoman Victoria Dillon said the vendor believes it has address all but a “handful” of issues and plans to remedies those before the state’s next round of testing.

Among the deficiencies noted in the letter were remarkably high failure rates for equipment during July testing, including a 31% failure rate for mobile radios tested on the system, a 60% failure rate among vehicular tactical repeaters and a 78% failure rate for portable radios.

Other system performance problems involved handoffs between vehicular repeaters and network towers, the capacity of the vehicular-repeater solution, the emergency-call function, intermittent failures of the caller-alias feature and inconsistent voice quality when using M/A-COM gateways to bridge legacy LMR communications into the system. But perhaps the most significant statistic noted was network downtime. During the July testing period, the network was down for 43 hours and 51 minutes, when the contract allows only 82 minutes of downtime per year. M/A-COM officials last week said the company had remedied all but a handful of the cited deficiencies since the July testing. Liotta said that the state’s letter did not reflect that work, but it would be considered during the next round of testing.

“We are very disappointed that the Office for Technology has issued a letter of default,” M/A-COM President Chuck Dougherty said in statement. “We have been cooperating with OFT through a remediation plan to resolve what we believe are the few remaining open items in the program. We have assured the Office for Technology that we want to resolve this dispute quickly.”

If the state does not accept the first phase of the statewide network, it has the right to nix the $2 billion contract and not pay any money to M/A-COM, which already has spent more than $50 million on the project and has secured a $100 million performance bond.