There's trouble brewing at the Los Angeles County Hall of Administration, where a very big problem threatens to get much, much bigger.
The issue revolves around a crucial communications network that would link Los Angeles County first responders. Last week, confronted with furious lobbying efforts by two companies competing for that project, the joint powers authority overseeing the project abruptly pulled the plug on negotiations and went back to the drawing board.
The action will probably delay by months or years a system law enforcers say is essential. But that's not the biggest problem. Behind the scenes, the incident has stirred grave concern at the County Hall of Administration about the legality of other, unrelated, contracts that have been let by the county. The situation, one county supervisor told me last week, is "a fiasco."
The communications network, known as the Los Angeles Regional Interoperable Communications System or LA-RICS, is intended to let police, fire and other emergency personnel talk to each other in the event of a major catastrophe, such as a terrorist attack or an earthquake. The price tag is enormous: By the time the project is complete, it is expected to cost between $300 million and $800 million. The two contenders for the contract, Raytheon and Motorola, both have threatened legal action, and each whispers about the incompetence and political connections of the other.
Despite all that, the authority was close to sealing a deal with Raytheon last week when, suddenly, years of work unraveled. The culprit, according to a confidential analysis shared with county officials and given to me last week, was a sloppily written request for proposals, one that the analysis said was "flawed and cannot proceed." The essential defect was that the request combined different types of contracting. The overall project involves both the purchase of new technology, which is governed under one set of contracting laws, and the construction of new cellphone towers and data centers, which is governed by a different set of laws. In purchasing technology, governments may enter directly into negotiations with potential vendors, whereas with building projects, governments must request bids and award contracts to the lowest bidder.
In this case, however, lawyers at the Los Angeles County Counsel's Office merged the two elements into a single request for proposals. That violated state law, the confidential analysis concluded. And even if it hadn't, the request for proposals "contains [other] deficiencies that would result in a court voiding any contract" awarded through it. The joint powers authority will now have to break the deal into three parts — a procurement component, a design component and a construction component — and put them back out for bids.
That may address the current problem, but it leaves a pile of wreckage and may portend bigger troubles. When the deal was on the verge of going to Raytheon, Motorola filed a protest against the agency's scoring of the proposals and howled about the improper release of some of its proprietary information. But now that Motorola has gotten another shot, it's Raytheon that may have a legal beef against the county for switching the rules at the last minute. Beyond that, the delay caused by going back to the drawing board may cost the agency more than $200 million in federal grants.
And there is an even more ominous possibility. Some in the county are quite worried that any number of other contracts, drawn up by the same lawyers who put this one together, may also be illegal and subject to challenges from companies that lost out.
On Monday of last week, one top official told me he considered that scenario "unlikely" because the LA-RICS system is uniquely complex and therefore no other contracts were expected to have improperly fused the different rules. But on Wednesday, Raytheon's counsel told the LA-RICS board that he's already found at least one other county contract, from 2006, that has the same error. County Counsel Andrea Ordin, who took office after the LA-RICS contract had been drafted, declined to comment about the possibility of more widespread problems. County supervisors, meanwhile, were publicly mum but privately livid.
County chief executive officer William T Fujioka, who also chairs the joint powers board, has ordered that other contracts be scrubbed by outside counsel. And Supervisor Mike Antonovich, who said he was "sick and tired" of the jostling for the LA-RICS project, has placed on the supervisors' agenda for next week a discussion of what went wrong and what may still be out there.
Things could get a lot worse.