Words do Count
Public safety agencies faced with purchasing a new telecommunications system need to consider contracts, competitive negotiation and due diligence. Recent experience in procuring a system for the Connecticut Department of Public Safety illustrates these points.
Mednick is a partner in the Connecticut-based law firm of Carmody & Torrance, LLP. He was retained by the state of Connecticut to oversee the entire process and handle the final negotiations for the state procurement of an 800MHz trunked digital simulcast voice and mobile data system.
Tyszka, Connecticut State Police (retired) and an APCO member, was in charge of coordinating the development of the RFP for the system and was involved in all aspects of the procurement and negotiation process. He is currently a consultant to the Connecticut Department of Public Safety to continue the implementation and testing phases for the new system and holds FCC General Radiotelephone and Amateur Radio Extra Class licenses.
In the darkest hour of the longest day of a nine-month negotiation, the following exchange underscored the importance of preparation and sticking to your guns in a substantial public safety telecommunications procurement. During an impasse on the issue of coverage testing for co-channel interference, the client, the state of Connecticut, proposed using verbatim language from the vendor’s response to the request for proposal (RFP). Curiously, the vendor rejected its own words. Incredulous, the state inquired about the irony of a vendor discarding the answers that won them a place at the negotiating table. The sales representative, in an ill-considered statement, told us: “They’re just meaningless words; don’t worry about it. We’ll get the job done.” On this verbal “non-commitment” rested the fate of a more than $36 million contract for an 800MHz trunked digital simulcast radio system.
Lesson #1: Creating the words In a public procurement, the words begin to flow in the RFP. Without a clear RFP, the agency purchasing the system would be at the mercy of the vendor. This is especially true in an integrated telecommunications systems market where a limited number of vendors respond to RFPs. As a result, the RFP must be crafted in a manner that binds the vendor to the words contained in its proposal. The RFP should delineate mandatory and optional system requirements, laying out technical issues and objectives in a comprehensible manner for the vendors.
If your RFP is a clear document, vendors should be able to respond in a detailed and specific way to the requirements of the client agency. Do not accept form responses or sales puffery. Vendors will attempt to impress you with glossy marketing brochures containing vague and generic responses. Those brochures should not form an acceptable basis for evaluation and must be discouraged at the outset of the procurement process.
Lesson #2: Control contract drafts If you are merely purchasing equipment, a “form contract” offered by the vendor may be the way to go (but read it carefully). If the vendor is providing system integration, insist on negotiating a contract from the bottom up. Create your own contract blueprint:
*Issue mandatory contractual requirements in your RFP (i.e., indemnification, copyright and patent protection, and software escrow requirements) that will be included in the final contract. *Pay careful attention to warranty provisions proposed by vendors. (See “Lesson #10,” page 30.) *List the RFP requirements in a comprehensive “representations and warranties” provision. *Be sure “due diligence” burdens fall to the vendor or system integrator. Include all necessary technical documentation.
In the end, do not rely on the raw words of the RFP and the technical responses as your system blueprint. Take those words and create a technical exhibit attached to the contract.
Lesson #3: Adhere to the process Connecticut’s experience demonstrates the importance of paying attention to the procedural, legal and regulatory issues posed by the rambling and evolving competitive negotiation procurement process. This multi-tiered process began in August 1996, ended in March 1999 and included six stages:
*issuance of the RFP. *vendor selection evaluation. *drafting a “vendor selection report. *authorization to commence contract negotiations with the vendor. *contract negotiations. *publication of an award report.
At the risk of oversimplification, the keys to the early phases of the competitive negotiation are: (1) to establish protocols for a thorough review of vendor proposals, with an eye toward narrowing the gap between the RFP requirements and the responses; (2) advising the prospective vendors of the statutory and regulatory requirements of the competitive negotiation process and inviting inquiries regarding any perceived ambiguities in the process; and (3) holding the successful vendor to the words used in its responses. Bear in mind that post-selection litigation is driven not by the substance of the technology but rather by any deficiencies in following the established procurement procedures.
Lesson #4: Procedural clarity In addition to substantive clarity, efforts should be made to ensure that your procurement is not vulnerable to procedural attack.
First, define and reinforce the procedural requirements of the competitive negotiation process. Communicate and correspond with the vendors to increase their understanding of the requirements of the process and the rules governing the process. Have them ratify the process by soliciting criticism before taking any subsequent steps.
Second, establish clear and verifiable evaluation criteria. The evaluation team decision must be justified legally and technically. The team must establish scoring criteria and apply the standards equally to all vendors.
Third, control the competitive negotiation process. Issuance of the RFP is the beginning, not the end, of the procurement process. Use the evaluation process to better understand the proposals and to clarify ambiguities that may exist in your system requirements-before getting to the negotiation stage.
Lesson #5: Negotiator expertise Remember that vendors put their best face forward through their sales force. They will often hire lobbyists or well-connected lawyers to scope out the situation and your budget in advance. In one case, this resulted in achieving a low bid price but missing the mark on the principal, substantive requirements of the RFP. When negotiating with the vendors, insist on having their technical personnel at the table. Do your homework, and hold the vendor to the words they used to get to the table in the first place.
Lesson #6: Due diligence Issuing the RFP should be the first step toward shifting the burden to the vendor. In the beginning, the client agency knows what its functional requirements and needs are; however, when your RFP hits the street, you have a right and an expectation that knowledgeable vendors will respond with the best technology available to meet your public service requirements. Set the goals and provide the criteria for reaching your objectives. Make it a clear requirement that you expect the vendors to inform you of deficiencies in your requirements, assumptions or technology, and ask them to come up with a better way to meet the goals. Be sure to require the vendor to estimate costs for correcting any such deficiencies they identify.
On a legal and technical level, coverage requirements illustrate the previous point. If you require digital voice coverage of 98% of the total land mass of your area in all seasonal conditions at a bit-error rate (BER) of not more than 2.6%, this should be clearly articulated in the RFP and mandated throughout the entire process.
For example, Connecticut’s RFP and, ultimately, the contract, required the vendor to agree that, during testing, if 98% of the area is not covered, “… (it) will make all necessary adjustments to achieve the 98% coverage level on a troop-by-troop basis … (with the exception of Troop L) ….” Moreover, the contract provided that should any other site be needed to guarantee 98% coverage, the vendor would be responsible for obtaining the necessary permits and any other approvals required for site development.
Lesson #7: Shift the design burden Hand in hand with due diligence is the requirement for the vendor to design the system. Again, in Connecticut, the coverage and other operational requirements of the system were derived from the vendor’s design and installation of the system. The state required that the prospective vendors use the existing state-owned microwave network, including, but not limited to, sites and current FCC-licensed frequencies, and to notify the state of any weaknesses or deficiencies in our infrastructure.
The vendor locked itself into this obligation when it stated in its proposal: “The sites that are used in our baseline offering are the existing state-designated sites. We will be able to meet the state’s coverage requirements using existing towers and microwave equipment.” These words are meaningful because any changes or modifications of the infrastructure necessary to achieve the objectives of the contract will fall to the vendor.
Lesson #8: The system integrator If the vendor is obligated to design, implement and maintain a statewide telecommunications system, it is vital to make it clarify that the procurement is not solely for the purchase of equipment, products or components. Accordingly, the RFP and contract should be replete with clearly delineated responsibilities and obligations of the vendor as a system integrator. As such, the vendor is required to:
*provide and install the latest version of proven hardware and software necessary to create the new system. *ensure all aspects of system design and correct any defects to the system or make any modifications of the design at its sole cost and expense. *construct and install any towers, shelters or renovate any facilities if necessary to comply with the performance and acceptance test plan requirements of the contract.
Lesson #9: Create a system test The vendor, after completing system installation and before final acceptance of each phase by your agency, should perform integration tests, functional and operational tests, and coverage verification under your supervision. All the elements of the system must be immediately functional and demonstrable to the satisfaction of your agency, subject to a percentage-of-payment “holdback” prior to final payment and transfer of title to your agency.
Lesson #10: Beware of warranties One of the challenges of negotiation is the tension that exists between customer and vendor perceptions relating to warranties. The procuring agency wants a wide net for warranty services, while the vendor will propose a list of service exclusions. Yet the quality of warranty and maintenance requirements are crucial issues in the procurement. Under the terms of the Connecticut contract, these services are seamless from the initial installation period through any future extended warranty and maintenance periods. With the exception of the annual maintenance payment that will commence following the end of the warranty term, there will be no distinction between the quality and service levels offered. The contract clearly delineates the service and maintenance obligations.
Serving the public trust A public entity must take the procurement process seriously from the date the RFP is drafted to the time when the contract is signed. Vigilance requires internal discipline, strict requirements for vendors to abide by and accountability. The costs of these contracts are too high, and the public safety services provided by communication systems are too critical, to ignore. From the beginning to the end, it all comes down to words-formulated in the RFP, contained in vendor responses and “clearly” articulated in the contract.