Florida gives Motorola Solutions Dec. 31 deadline to sign statewide P25 contract

Motorola Solutions needs to sign a contract by Dec. 31 to build a statewide P25 network in Florida—the largest pending LMR opportunity in North America—or the state “will move forward with the evaluation of other options,” according to a letter from a state official that was delivered yesterday to Motorola Solutions CEO Greg Brown.

Provided to IWCE’s Urgent Communications late yesterday afternoon, the letter from Florida Department of Management Services (DMS) Secretary Jonathan Satter acknowledges the time and effort that personnel from state and Motorola Solutions spent last week “to finalize a contract that includes clarifications, as discussed.”

Satter’s letter does not identify what was discussed or what clarifications were made. However, the state has submitted a final contract for Motorola Solutions to consider, according to the letter.

“I have signed and attached the final contract resulting from the invitation to negotiate … and the contract award based on the Best and Final Offer from Motorola Solutions, Inc.,” Satter’s letter states.

“[DMS] and our customers in the law-enforcement community are ready to move forward. As such, we request Motorola sign and return the attached executed contract within five (5) business days of receipt of this letter. If [DMS] does not receive the fully executed contract by Dec. 31, 2019, [DMS] and the state of Florida will move forward with the evaluation of other options to procure a next-generation system.”

This letter marks the second time in 11 days that Satter has written to Brown about Motorola Solutions’ $687.8 million bid to upgrade Florida’s Statewide Law Enforcement Radio System (SLERS) to the P25 standard. The existing SLERS system is owned and operated by L3Harris and uses proprietary EDACS technology.

In his letter to Brown dated Dec. 12, Satter set Friday, Dec. 20, as the deadline for DMS and Motorola Solutions to execute a contract. That timetable has been altered to conclude next Tuesday, based on yesterday’s letter from Satter.

What is not clear from Satter’s letter yesterday is whether any of the terms that Motorola Solutions’ officials considered to be “deal breakers”—a term quoted in Satter’s Dec. 12 letter—have been altered in any way.

In his Dec. 12 letter, Satter noted that DMS “will enter into a contract with Motorola that includes all substantive terms and conditions negotiated during the competitive procurement.” One of those conditions is a “termination for convenience”—different from a termination for cause, which would be based on a vendor’s failure to perform—clause that would let the state whenever it wants with little advance notice.

Motorola Solutions representatives had “consistently expressed a desire to modify substantive terms negotiated during the competitive procurement and agreed to by Motorola in its BAFO [best and final offer], including termination for convenience,” according to Satter’s Dec. 12 letter.

Motorola Solutions’ winning bid called included a price of $687.8 million—about $300 million less than the bid submitted by L3Harris (then known as Harris), the incumbent SLERS vendor—to build a 144-site P25 network. The Harris bid called for 190 tower sites to provide statewide coverage.

Florida DMS included a “termination for convenience” language in its procurement documents, making acceptance of the language a condition of a qualified bid. Motorola Solutions representatives were reminded of the condition last year, when Administrative Law Judge Bruce Culpepper recommended dismissal of a procurement protest by Harris in favor of the Motorola Solutions bid.

“This [termination-for-convenience] provision authorizes the Department [DMS] the right to terminate the SLERS contract for any reason, or no reason whatsoever,” according to Culpepper’s opinion. “One example of how the Department might cancel the contract ‘for convenience’ would be if the Legislature determined that the state no longer needed, or wanted, the SLERS. The Termination for Convenience clause would allow the Department to terminate its agreement without incurring any financial obligation.”

Satter’s letter yesterday does not directly address the “termination for convenience” issue, although the letter states that the proposal signed by the state reflects the “Best and Final Offer from Motorola Solutions.” Previously, the offer from Motorola Solutions has been interpreted to include the “termination for convenience” language.

IWCE’s Urgent Communications attempted to clarify the matter in an inquiry to Florida DMS shortly after receiving a copy of Satter’s letter. Florida DMS did not provide a response in time to be included in this article.

IWCE’s Urgent Communications also sought comment from Motorola Solutions about Satter’s letter but did not receive a response in time to be included in this article.

Documents indicate that a “termination for convenience” clause exists in the current SLERS contract, but the termination would was based on a legislative decision not to fund the system.

Several industry sources indicated that vendors have agreed to such language in LMR contracts in the past, largely because there traditionally have been no technological alternatives to LMR for public-safety voice communications, so the risk of termination was slight.

But the risk associated with a “termination for convenience” clause is greater with the Florida SLERS upgrade to P25, according to industry sources.

According to the SLERS procurement, Motorola Solutions would have four years to build the statewide P25 network in Florida, but it would not be paid during this time. Regular annual payments to Motorola Solutions would not begin until the expiration of the existing SLERS contract with L3Harris, which is supposed to happen at the end of June 2021—a timeline that is just 18 months away, not the four-year buildout timeline contemplated in the SLERS procurement.

While Motorola Solutions would be investing significant time, money and effort to build the P25 network, the “termination for convenience” clause brings into question how much—if any—revenue Motorola Solutions would receive from its investment, if state officials decided to end the agreement at any point in the future.

Making the matter more difficult to assess is the fact that AT&T officials have announced plans to make mission-critical-push-to-talk (MCPTT) service over LTE available to FirstNet customers during the first quarter. MCPTT is unproven, but many believe MCPTT could be a viable alternative to P25 during the next few years.