FirstNet official clarifies evaluation process, public-safety pricing goals

After receiving bids from offerors on May 31, FirstNet evaluators will engage in a lengthy, negotiation-filled process in an effort to forge the best arrangement with its contractor on behalf of public-safety users, a FirstNet official said during a session at IWCE 2016.

This evaluation approach is a reflection of the unique nature of the FirstNet procurement, which is very different from a typical bidding process in which government pays money for specific good or services, according to James Mitchell, FirstNet’s director of program management. Under the terms of the FirstNet request of proposals (RFP), the contractor actually will make regular payments to FirstNet throughout the 25-year contract term in return for access to prime 700 MHz spectrum that can be leveraged to sell services.

“Price, in your typical contract, is what we’re going to pay industry to do something,” Mitchell said during a session last month that focused on the economics of FirstNet. “Obviously, that’s flipped here. Our partner, or contractor, will be paying us for access to the spectrum, and there will be an exchange, based on the adoption targets that are presented in the proposal process and thereby agreed to in a contract.”

Given this situation, Mitchell emphasized that FirstNet evaluators will seek the “best value” offer, Mitchell said.

“I’m not asking for the lowest-cost, technically acceptable, requirements-based acquisition,” he said. “I want more stuff for public safety. I want a better network. I want to go bigger, faster and stronger than previous offerings, and I’m actually asking industry to pay us to make that happen.

“That’s an awkward proposition, but it’s one that we’ve laid out in Section B of the RFP.”

Proposals from offeror teams are due in five weeks, on May 31. Although offerors have been asked to submit their best bids at that time, the proposals likely will not be stagnant during the “long” evaluation process, Mitchell said.

“If you want to think of it as being at least the beginning of a long negotiation process, that’s what the evaluation is going to be,” Mitchell said. “We’ve talked about reserving the right for discussions and negotiations. I think anyone in the acquisition community will tell you that’s something you have to do when it’s this complex and this big—especially something that is this unique.”

FirstNet’s RFP includes significant disincentive payments that the contractor would have to pay, if public-safety users—none of whom are under any legal obligation to subscribe to the proposed nationwide broadband network—do not meet adoption targets. But these targets are not prescribed in the RFP; it is up to the offeror team to propose the adoption targets.