A public ruling issued in the pre-award bid protest case of Rivada Mercury offers more insight into the process that ultimately resulted in AT&T last week being awarded the contract for the nationwide public safety LTE network under the auspices of the First Responders Network Authority.
The federal court ruling, like many of the related court documents over the course of the case, had originally been sealed due to concerns over making competitive information public. The companies involved were able to propose redactions, and the court said that it accepted most of them.
Rivada Mercury had argued it was wrongfully excluded from the competitive range of the project and that it had hoped the court would force FirstNet to reconsider its bid. The company has since said it will pursue FirstNet business by ramping up its contacts with states who wish to consider opting out of the national FirstNet build to be performed by AT&T.
Among the key takeaways from the ruling in the U.S. Court of Federal Claims:
-AT&T was the only company in FirstNet’s competitive range. The ruling confirms that detail, which was previously based on public knowledge of three bidders and the fact two of them were notified they had been ruled out of the competitive range. However, information about how many total bids the FirstNet project received was redacted. Rivada Mercury had argued “the agency had an unstated preference for awarding the contract to a large, established wireless carrier,” but the court ultimately found “the fact that the agency included only AT&T’s proposal in the competitive range does not demonstrate that the government applied an unstated preference for a large carrier; it merely reflects the agency’s reasonable determination that Rivada’s proposal carried too much risk.” However, AT&T’s past performance was seen as a plus for the company; as the ruling states, “the agency determined that AT&T ‘ha[d] the past performance to support its ability to partner with and successfully complete its awarded projects.’ …Rivada, on the other hand, ‘possesse[d] few capabilities, staff or financial resource’”; ‘d[id] not itself have material experience in . . . building and operating a nationwide wireless network’; and lacked any experience in ‘supervising a project of the size and scope of the [national public safety broadband network].'”
-FirstNet considered three types of risks when evaluating bids: performance and technical risk; cost; and schedule risk. According to the ruling: “For performance and technical risk, FirstNet observed that ‘[c]oncerns associated with interoperability with opt-out states, reliability/availability, and coverage’ could ’cause first responder lack of access to NPSBN services at a critical event and lead to loss of life, serious injury, and/or failure to meet mission objectives and requirements.’ … With respect to cost risk, [FirstNet] noted that ‘Congressionally allocated funding for the NPSBN” might be “inadequate to execute deployment and operations’ if the winning contractor ‘undervalued’ FirstNet’s excess spectrum capacity. … Finally, FirstNet assessed the schedule risk as ‘high’ because (among other things) ‘[t]he current anticipated schedule is aggressive’ and ‘there is a potential that FirstNet may not have enough government allocated funding . . . to pay for full nationwide coverage . . . resulting in a slower rollout.'”
AT&T plans to invest $40 billion of its own money over the 25-year life of the contract, and the company announced this morning it has created a new Global Public Sector organization. It named executive Kay Kapoor, who has led AT&T’s federal business for four years and headed up its pursuit of the FirstNet contract, as president of the new organization.
-Although Rivada Mercury’s bid was deemed acceptable in a number of areas and its mapped plans for coverage and capacity were deemed “exceptional,” FirstNet judged it was a financial risk to go with their bid due to a number of factors and the court agreed that those were reasonable in excluding the company from the competitive range. According to the ruling,”the first set of deficiencies related to ‘Rivada’s lack of financial stability, capacity and required funding'” – including the risk of Rivada Mercury’s proposal to monetize the excess Band 14 spectrum through a wholesale marketplace, which required robust Band 4 device support in order to be adopted by non-FirstNet customers, and the fact “Rivada’s proposal depended on ‘substantial third-party funding’ to augment the funding provided by the government … [but] Rivada ‘did not provide acceptable evidence demonstrating that it could obtain’ such funding.” Further, the SSA explained “Rivada’s proposed strategy [wa]s risky” because it “utilized aggressive business assumptions” to account for “the [ . . . ] [it would need] to fulfill its business plan.” In addition, Rivada Mercury’s plan included a strategy to count any user that downloaded an app from the proposed FirstNet app store as a user, which FirstNet felt did not reflect its definition of a connection and overinflated Rivada’s user projections.
-AT&T’s bid wasn’t perfect, either. FirstNet’s committee found “substantial strengths . . . as well as some weaknesses and deficiencies.” but overall, concluded going with AT&T meant “there [was] a reasonable probability of success and little risk that AT&T’s proposed solution would fail to meet the [solicitation’s] quantity, quality and schedule objectives.” AT&T’s strengths included its “significant experience building and operating nationwide wireless systems and . . . commercializing spectrum capacity” as well as the fact that its “existing position as a commercial wireless service provider” meant it would be able to construct, operate and maintain the network, serve public safety users, make the required payments to FirstNet over the course of the contract and leverage “its extensive relationships with device manufacturers and its subscriber base of 130 million customers to ensure the manufacture of Band 14 compatible devices.” However, FirstNet did find “weaknesses in AT&T’s proposal included (among other things) AT&T’s failure to ‘provide evidence of executed teaming arrangements with core subcontractors'”, low overall proposed adoption targets and dinged the company by saying that there were several unidentified areas where FirstNet found “several significant areas where AT&T’s proposal had unbalanced pricing and/or increased risk to FirstNet.”
Ultimately, however, in the 22 categories and subcategories of the bid FirstNet evaluated, Rivada Mercury’s bid was deemed “unacceptable” in 12 and exceptional in only one; while AT&T’s offer was judged to be unacceptable in only two, exceptional in three, and either acceptable or highly acceptable in all the others.
“FirstNet is pleased the court was able to quickly release the reasoning of its decision,” said FirstNet CEO Mike Poth in an emailed statement on the ruling. “It clearly validates our thorough and quality acquisition process, which was designed and implemented to provide FirstNet and public safety with the best value, most sustainable, and lowest risk approach to deploying the nationwide public safety broadband network. FirstNet is pleased to be moving forward with AT&T to build this world class network for public safety.”
For more information on FirstNet’s plans, check out the RCR Wireless News special report and listen to our webinar on the topic of FirstNet and public safety LTE.
Image copyright: amaviael / 123RF Stock Photo
