The Motorola radio system used by all law enforcement agencies across the county has not received an independent review to ensure the more than $100 million it cost over the past 15 years was spent appropriately, according to Orange County sheriff’s officials..
The most recent audit was in 2002.
The disclosure came Tuesday, as county supervisors were about to approve $29 million in no-bid contracts with Motorola Solutions to finish a $140 million project that replaces much of the outdated system’s equipment. No bids were sought from other companies for the overall project.
“There has been a lot of frustration I think by this board, from time to time, about the exclusivity and the sole source with Motorola, and you’re [paying], you know, $5,000 for a [portable] radio,” Supervisor Todd Spitzer told a Sheriff’s Department official who oversees the system.
The price of each portable radio, Spitzer said, is “big. It’s dramatic…And you say, ‘wow, is that the market [price]? Or is that just something you have to do, because we’re sole-source and we’re completely all-in with Motorola.’”
He asked when the last time was the county did an audit to “independently [verify] that we got the bang for our bang for buck and the moneys have been spent appropriately.”
The answer? The year 2002, after the original system was implemented, said Dave Fontneau, director of the Sheriff’s Communications & Technology Division.
“Fifteen years is a long time to not audit a program of this magnitude,” Spitzer said. He said he was “alarmed” to learn it’s been so long since the last audit.
But after expressing his concern and urging officials to do a new audit, Spitzer offered a motion to approve a $25 million no-bid contract with Motorola, which was unanimously supported by all five supervisors. Another $4 million no-bid contract was also approved.
Spitzer was the only supervisor to raise questions or comment on the contracts.
Motorola was chosen to create the 800 MHz Countywide Coordinated Communications System in 1995, under a $70 million contract that later grew to $83 million. The system is proprietary, and only Motorola radio products can be used on it, according to the Sheriff’s Department.
The system is a critical component of emergency services in Orange County.
It’s used by all police and fire services in the county’s 34 cities, as well as paramedics, public works officials, state and federal agencies, and the police departments for universities, community college districts, and Santa Ana school police. Costs are shared among all the user agencies.
As the 1990s-era equipment becomes obsolete, county supervisors and Sheriff Sandra Hutchens have opted not to ask other companies what they could offer as a replacement system. The sheriff’s staff have said switching to a different company’s system would be costly and too disruptive to emergency communications.
Under the county’s price agreement with the company, handheld radios cost up to $5,800 each and motorcycle radios are up to $9,200 each. The ongoing upgrades also involve tens of millions of dollars to replace backbone infrastructure, like over 500 base radio stations.
The $29 million in contracts approved Tuesday are for the last stage of a major $140 million project to replace and upgrade the system’s 1990s-era equipment.
The upgrade project started in October 2013 and is expected to finish in late 2019 or early 2020, according to Robert Beaver, senior director of administrative services at the Sheriff’s Department.
Sheriff’s officials didn’t give a presentation “per se” to county supervisors, who oversee county finances, Beaver wrote in an emailed response to questions from Voice of OC.
Instead, Beaver said the department at one point provided supervisors with a single-page “white paper,” which is essentially a basic timeline that includes the total price tag of $140 million. It’s unclear when the page was provided to the board.
Sheriff’s officials have brought forward individual Motorola contracts for supervisors’ approval over the past several years. But they did not include the $140 million overall price tag in their staff reports.
The system was anticipated to be reliable for the next decade and a half, until about 2015, according to the Sheriff’s Department.
But when it came time to start replacing the aging infrastructure in 2010, the Sheriff’s Department – which manages the system – did not put the contract out to bid to see what other companies could offer.
Instead, county supervisors and Hutchens issued tens of millions of dollars in sole-source contracts to Motorola to replace and upgrade their infrastructure.
“No other [companies] have been contacted since the system is proprietary to Motorola,” the Sheriff’s Department wrote in its 2010 justification for not conducting a competitive bid for the system upgrades.
“There is no direct alternative [to Motorola],” the department wrote. It said Motorola’s prices “would be competitive” with competitors, but didn’t explain how it arrived at that conclusion.
Changing to a different company, the department added, would require “a complete replacement of the current system…which would be prohibitively expensive and unacceptably disruptive to Public Safety radio communications operations throughout the county.”
The contracts are with Motorola Solutions, whose main business is building communications systems for public agencies and private companies. It was formed when Motorola, Inc. was split into two publicly-traded companies in 2011.
At Tuesday’s meeting, Spitzer asked CEO Frank Kim to make sure the spending over the last 15 years gets audited.
Kim said he could ask county Auditor-Controller Eric Woolery, who oversees internal audits, to add an audit of the Motorola system to his staff’s work plan.
The sheriff’s official, meanwhile, said a group of city managers and county officials have “actually been addressing it” over the last eight months.
But Fontneau described that existing effort as a “financial reconciliation,” which looks at whether financial records are accurate. But that review, which is expected to be presented Thursday to a committee of city managers and county officials, was not performed by an independent auditing firm.
Spitzer said there needs to be an independent audit.
“I hope we all agree [that] we really need an analysis, after 15 years,” Spitzer said, wondering, “How did this one miss 15 years?”
“When they shared that information with me, I have to tell you…I was honestly a little alarmed, because that seems – for something in the over-$200 million range…we maybe should have been asking these questions.”
Records show no campaign contributions from Motorola into county-level elections in Orange County since 2009. And the firm doesn’t have a registered lobbyist with the county.
It’s not yet clear what kind of audit might be performed on the $100 million-plus that has been spent since 2002.
In an interview Wednesday, Woolery said he would talk to his office’s auditing director to see what resources are available to examine the Motorola spending.
“This is an issue we need to look into and probably do some sort of audit or verification,” said Woolery, an elected auditor-controller whose office obtained the county auditing function in August 2015. Before that, internal auditing was done by an official who reported to the Board of Supervisors.
“[I’m thinking] we really need to start looking at some big functions, like the big contracts [with] Motorola [and IT companies] Atos, and SAIC,” Woolery said. “Sometimes if you do kind of the old-school kind of auditing, they get lost in the system.”
Public-sector audits can range from simply verifying that a random sample of payments matched the prices in the contract, to deeper looks at whether vendors were efficient and effective in performing the work and why cost increases took place after contracts were approved.
Woolery noted the county has a system where sheriff’s officials should have been signing off to say it’s okay to pay Motorola because they properly performed the work.
The key for an audit, he said, is defining the scope of what it would look into – the “question zero.”
“If we think the procurement process [was] flawed, then we look at that procurement,” Woolery said. If the vendor’s product process could have been flawed, he said auditors would look into that.
Nick Gerda covers county government and Santa Ana for Voice of OC. You can contact him at ngerda@voiceofoc.org.