The company that lost an $82-million county contract to Motorola for an emergency communications system said Monday the project should be rebid because a consultant hired by Orange County to evaluate the competing proposals allegedly had undisclosed business ties to Motorola.
The request, made in a letter to the Board of Supervisors on Monday, is the latest in a yearlong effort by Ericsson GE Mobil Communications to have the county rescind its contract with Motorola. Purchase of the communications network, which is to link every public safety agency in the county, has been indefinitely delayed, a casualty of bond-crisis cost cutting.
County officials rejected the request from Ericsson, saying the firm is trying to win the job through political and legal pressure.
At the heart of the latest dispute is San Francisco consultant Michael Newman, who was paid $20,000 by the county in 1993 to help review the competing proposals as part of the bid process.
An attorney for Ericsson, which formed a partnership with Harris Corp. to bid on the project, charged that consultant Newman favored Motorola because he had received more than $60,000 from Motorola for "engineering services" just before and just after he worked as a consultant for Orange County.
Newman acknowledged receiving the payments from Motorola in a videotaped deposition taken earlier this month by Irvine attorney Randall Erickson, who represents Ericsson. On Monday, Erickson used Newman's admission to demand that the Board of Supervisors "throw out the award to Motorola and award this procurement" to Ericsson. Both the letter and the videotape were given to reporters by Erickson.
Orange County General Services Agency Director R. A. Scott rejected the request, charging that Erickson "has done a masterful job of distorting information."
Scott pointed out that Newman originally recommended that Ericsson and Harris be awarded the contract, and added he was aware of Newman's ties to Motorola when he hired him.
Scott denied Newman's working for Motorola constituted a conflict of interest. "Not at all. If he's in the consulting business he will do work for Motorola and other companies," Scott said. "He didn't do work solely for Motorola."
In fact, Scott said that Newman concurred with a committee's recommendation in October, 1993, that Ericsson and Harris be awarded the contract if they could overcome seven technical problems with their proposal.
When the two companies were unable to meet those seven conditions, a second committee recommended in December, 1993, that Motorola be given the contract instead.
"By that time Newman was out of the picture," Scott said. "He was not involved in the second committee's action at all."
Scott said that Newman was hired to review the evaluation done by the first county committee of the proposals submitted by Motorola and the Ericsson/Harris team.
In the five-page letter sent to the Board of Supervisors on Monday, Erickson charged however that the seven technical conditions imposed on Ericsson "were orchestrated by (Newman) and the county staff with a bias toward Motorola."
In addition, Erickson suggested that Newman is unqualified as a consultant because he is not a licensed electrical engineer and lied about his qualifications.
Neither Newman or his attorney could be reached for comment.
Scott, however, dismissed the charge. "So what if he's not an engineer? That's totally irrelevant to the work we had him do," Scott said. "We didn't have him do design work. His qualifications were adequate for the work he had to do. All we asked him to do was review the first committee's evaluation."
Scott also denied that Newman had anything to do with the seven technical conditions that Ericsson was required to meet in its proposal.
Newman says in the videotaped deposition that he told other GSA officials about his business ties to Motorola and that he was not a licensed engineer.
In the deposition, Newman also details the unusual relationship he had with Motorola. He admits that on two occasions he turned a substantial profit when Motorola paid him a 100% markup to buy Ericsson communications equipment. Motorola wanted the merchandise to evaluate its competitor's equipment. Newman's profit on the purchase amounted to half of the $60,000 he received from Motorola.
The purchases were made in October, 1992, and November, 1993. His contract with the county ran from July to October of 1993.
The Board of Supervisors have not yet finalized the contract with Motorola. The 800-megahertz radio system was supposed to be in place by 1997, using state-of-the-art equipment, but the supervisors have postponed the project to save money.
Recently, Motorola officials offered to salvage the project by submitting a new financing package to the county. The company proposed loaning the county the full price of the system. Motorola officials said they were not sure what interest rate the county would be charged under the plan. The county was supposed to bear 30% of the cost, with individual cities paying for the rest.
The supervisors are expected to discuss Motorola's offer and the communications system at next week's board meeting.