CHARLOTTE, N.C. Motorola has thrived virtually without competition as Charlotte's emergency radio company, scoring more than $60 million in no-bid contracts over the last decade.
The latest sole-source deal, approved by the Charlotte City Council last October, will cost the region's taxpayers up to $32 million.
But experts say that when governments fail to invite competition on large contracts, they often pay too much. And with each contract renewal in Charlotte, the company's grip has narrowed city officials' options.
"The taxpayers of our region are getting burned," said Steve Koman, a former emergency communications consultant who assisted Charlotte from late 2011 to early this year.
Koman contends the city failed to exercise due diligence by awarding the recent Motorola contract without soliciting competition and without asking independent experts whether it was the most cost-effective option. Instead, Motorola helped craft the contract, which will allow the company to continue a practice of embedding proprietary features into the system a tactic that could prolong the city's dependence on the company, he said.
By May, he'd grown so concerned that he notified the FBI.
In another sign of Motorola's supremacy, agencies in Charlotte and surrounding Mecklenburg County were advised in 2011 that they could purchase radios from any of four qualified vendors, but that didn't change their buying habits. Indeed, over the last 10 years, all of the roughly 5,000 radios they've purchased are Motorola models.
City officials say they've acted in the best interests of taxpayers and public safety agencies. They say shifting to a new company would be expensive and that the city has received discounts by signing the recent multiyear contract with Motorola.
Money, city officials say, is not the only factor. Motorola's two-way radios are widely considered the gold standard for public safety performance. Police and firefighters have come to trust the company's equipment, they say.
A recent McClatchy investigation detailed an array of tactics used by Motorola to elbow out competitors and prolong its decadeslong dominance.
In response to those stories, three senior Democrats in the U.S. House of Representatives have asked the Department of Homeland Security's internal watchdog to investigate whether Motorola's contracting tactics have led state and local governments to pay so much for their radio systems that they've wasted millions of federal grant dollars.
Charlotte's latest Motorola deal is similar to a number of recent maintenance-and-upgrade contracts in which the company has protected its market share despite the adoption of uniform standards for the design of two-way radio equipment. The standards, which were aimed at ensuring that all brands can interact, also have increased price competition.
However, the noncompetitive deals are helping Motorola limit shrinkage of its estimated 80 percent share of the U.S. public safety radio market.
In 2012, the inspector general for Palm Beach County, Fla., faulted the county for the sole-source purchase of a new Motorola master controller, or switch, that ties together equipment purchased as far back as 1998 with the company's newer systems. Buying the switch "will likely provide a continued sole-source justification for future equipment" that can connect with proprietary Motorola hardware, the report by Inspector General Sheryl Steckler said.
Steckler chided county officials for signing the deal before conducting a comprehensive study of all replacement strategies and for plowing $41 million into the current system without exploring "whether a compatible and less expensive system could have been acquired."
Like Palm Beach, Charlotte did no such study before awarding the $32 million contract.
Illinois-based Motorola, known as Motorola Solutions Inc. since 2011, when its parent split, says it has a "robust compliance practice to ensure it follows all applicable laws and regulations." The company says it competes fairly for its customers' business by offering them "superior products and solutions."
Motorola had a special opportunity to cultivate brand loyalty in Charlotte.