Vendors grab for government cash

Today, more money is available for the purchase of public-safety communications equipment thanks to the federal government’s emphasis on homeland security — $2.5 billion to $5 billion just for interoperable digital radios built using the Association of Public-Safety Communications Officials’ Project 25 standard, according to one estimate.

Consequently, the companies developing that gear have more opportunity. On the other hand, multiple agencies are now being forced to collaborate on purchasing decisions, adding complexity to a process that once was determined by a single public-safety official or agency.

“The market is big; it’s material and it’s coming. That’s the good news,” said Tom Lambalot, president of SmartLink. “The bad news is the decision-making process has to be much more collaborative; it’s not like there’s a local fire chief or police chief that makes decisions on equipment and functionality.”

Lambalot, cognizant of the communications breakdowns that have snarled multi-agency communications in the past, applauds the government’s focus on interoperable digital technologies for local, county, state and federal agencies.

Still, like others in the vendor community, he longs for the days when a single czar made the decisions. “The more folks you put in a room to drive it to consensus, it stretches the procurement cycle time,” Lambalot said.

While the federal government is throwing money and positive spin at building interoperable communications, it’s debatable whether things are any better since Sept. 11, 2001, when the severity of the situation was revealed. The 9/11 Commission Report, issued in July, underscored the inability of public-safety agencies responding to the crisis at the World Trade Center to communicate with each other.

Not much has changed in the interim, according to Mark Jasin, national sales and marketing manager in Kenwood USA’s Communications Sector. “From a communications standpoint, I don’t know that there would be a much different respondability today as opposed to Sept. 11,” Jasin said.

There are several reasons for the lack of progress. For starters, it’s tough to follow the money trail.

“Both the communications requirement and the funding should be in sync, but that’s not the case today,” Jasin said. “We’ve seen inconsistent flow of funding and inconsistent specs and definitions to get that funding.”

Another factor is that while public-safety communications are on the brink of radical change, such a massive undertaking will take time and effort, as equipment purchases usually have a lifespan ranging from 10 to 15 years and legacy systems aren’t easily retired, particularly when the amortization cycle hasn’t ended.

If that isn’t enough to make vendors grind their teeth, they also must meet the needs of multiple agencies because the U.S. Department of Homeland Security has tied future federal grants to regional cooperation between agencies toward interoperable communications.

“Everyone has to have buy-in,” said Jay Herther, federal market director for M/A-COM. “The biggest roadblock has been getting everybody on the same page and collaborating. They have to pool resources — money and frequencies. It’s sharing.”

However, the public-safety space is not used to sharing.

“Everything used to be local,” Herther said. “Now you have an incident that starts out local, then you bring in state and federal agencies to help, and all of a sudden you have 20 different agencies that need to collaborate and communicate on the scene.”

While the billions of dollars that potentially are up for grabs has drawn a plethora of players seeking a share of the pot, the core group of vendors that have a long history of serving public-safety and government agencies stand to grab the lion’s share of the new money because they understand how things work.

“The government has its own process,” said Dave Storey, president and CEO of RELM Wireless. Integral to that process, according to Storey, is a sales force that has built long-term relationships with key government agencies and the decision-makers within those agencies.

Also crucial is the ability to prove you can build efficient, cost-effective P25 infrastructure, said M/A-COM’s Herther.

“There are probably half a dozen or more people who can supply P25 handsets or portable radios,” he said. “But you still need the M/A-COMs or Motorolas to provide the system.”

Even an experienced company needs allies among the multiple agencies on a regional or local level because “unless you have a technology officer or somebody in the community, you have a lot of difficulty,” said Herther.

Kenwood, for example, uses a dealer network, many of whom are “connected with public-safety agencies” to market its products, Jasin said.

Even though vendors need special connections to sell into a space that is “democratic, but offset by a history of parochialism,” those relationships are not what books the business, Lambalot said. “At the end of the day the solution is what’s going to get you the order,” he said.

While interoperability and standardized digital specifications eventually could open up the marketplace and erode the dominance of players like Motorola, those vendors that compete with the giant weren’t optimistic.

“This land mobile radio industry is totally dominated by Motorola, so most of the specs get written around the dominant player,” Storey said. “We have to convince people that our products are as good.”

On the other hand, veterans aren’t worried about the gaggle of starry-eyed outsiders looking for a piece of the homeland security action.

“A start-up coming in might have a novel [piece of technology], but I think they would be challenged by not having a lot of longevity,” said Lambalot.

But where there’s money, there’s aggression, and already some companies have found novel ways to wedge into the game. “It’s a cottage industry just to handle homeland security funds for people. There are companies that will offer services to get homeland security money and process it,” said Jasin.

The market for the actual equipment is exponentially bigger, according to Storey. “The [Integrated Wireless Network] is a $2.5 billion to $5 billion opportunity over the next five to 10 years,” said Storey. “The ultimate goal of this system is to enable you to come to any horrific event that occurs, and no matter what radios you have all will be able to communicate.”

It’s the long-term goal that everyone — vendors, public-safety agencies and the people with the money to spend — would like to see come about sooner rather than later.

JUSTICE GRANTS 2003

HOMELAND SECURITY GRANTS 2003

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