Early rebanding work reveals pitfall in process

LAS VEGAS–During the past three years, the primary focus of public-safety organizations impacted by 800 MHz rebanding has been negotiating deals with Sprint Nextel and getting the blessing of the Transition Administrator and the FCC.

These negotiations — typically involving mediation — have taken much longer than originally anticipated, but they are getting done. On a panel yesterday at the International Wireless Communications Expo (IWCE), TA Director Brett Haan said 55% of all NPSPAC licensees nationwide have signed rebanding pacts with Sprint Nextel.

Now comes the hard part: actually completing the work.

Haan said more than 100 NPSPAC licensees have finished their rebanding work, but most of these completions have occurred in systems that were relatively uncomplicated. For larger, more complex systems, getting the work done requires careful planning and attention to even the smallest details.

But, no matter how thorough the preparation, things happen that require plans to be altered. For instance, a date could have been set months ago to reband mobile vehicles in a given city. However, if every mobile vehicle is needed on the street that day because the presidential candidates decided to come to town and stump for votes, it may not be possible to get the work done as scheduled. Of course, severe weather is always a potential complication.

“This happens in every large engineering project,” said Chuck Jackson, Motorola’s vice president of system operations. “This is not unique to rebanding.”

In such situations, the vendor typically discusses the situation with the customer — the city, in the above scenario — and a change order is made that usually adds cost to the project. Instead of waiting until the next meeting of elected officials to get approval, a vendor often completes the work with the understanding that approval from the city council or other elected body will be secured in the future. No one likes change orders, but they are a common occurrence.

However, in a typical project, the customer is paying for the project. That’s not the case with rebanding, which is funded by Sprint Nextel. The scenario has created a situation for vendors and licensees regarding change orders that is “scary,” according to Danielle Marcella, senior project manager for M/A-COM.

Because Sprint Nextel is paying the bill, it — and, potentially, the TA or FCC — needs to approve a change order to ensure that those performing the work will get paid for their efforts. That means altering the rebanding contract, which is not an easy process.

But what if Sprint Nextel — or the TA or the FCC — determines the change order does not meet the “reasonable and prudent” test? If the work has already been done, the licensee has to pay an unexpected bill or the vendor simply has to eat the cost.

“Any licensee or vendor who performs work that is not specified in the FRA is at risk,” Marcella said. “When it’s a small amount, it’s not a big deal. But, when it is several hundreds of thousands of dollars, it is a big problem.”

And it’s a problem that can snowball throughout the country as rebanding proceeds. To date, negotiations have been focused on getting the job done for the least amount of money possible — including the removal of normal contingency fees — with the understanding that “actual costs” will be paid by Sprint Nextel, Marcella said. While vendors may view actual costs as whatever is necessary to get the job done, Sprint Nextel may see things differently when applying the “reasonable and prudent” test to a change order.

M/A-COM has been burned by this scenario already, Marcella said. While she declined to describe the details of M/A-COM’s situation, Marcella painted a picture of a hypothetical scenario.

Let’s say a public-safety agency negotiated a rebanding deal that called for all radios to be retuned or replaced in a 10-day period. Upon starting the job, complications discovered while doing the work makes it clear that it will actually take 30 days to complete. Both the licensee and the vendor want to proceed as quickly as possible — something the FCC says it wants — but neither may be comfortable working beyond the 10th day out of fear that Sprint Nextel won’t pay for the work, Marcella said.

If the work stops on the 10th day, all remaining radios would have to wait to be retuned until after the change order is approved and the appropriate resources — equipment and technical personnel — can return to the area, which promises to become increasingly challenging as the schedules of those who can do the work get overbooked as the rebanding schedule proceeds.

“In terms of trying to manage the schedule, we are all in a very precarious position because it is all at risk and there is no guarantee that anybody will be paid for any of that [change-order] work,” Marcella said. I can see that is going to impact schedules very greatly because I can see everyone taking a stand that says, ‘We will not perform any work at risk without any funding avenue.'”

This is an issue that is not going away anytime soon and requires attention from the FCC immediately. Without a good change-order process, rebanding could continue well beyond the 2012 timetable that most in the industry believe will be necessary to complete the massive project.

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