Motorola Solutions’ Revised ESN Contract Price Increases by US$107M

9th May 2019

Thursday, May 09, 2019

Details about Motorola Solutions’ contract for the U.K. Emergency Services Network were revealed in a voluntary ex ante transparency notice this week. The value of the revised contract is £401 million (US$523 million), an £82 million (US$107 million) increase from the previous £319 million (US$415 million).

The existing contract with Motorola includes several changes. The contract period will be extended. Its original term is due to expire in December 2023. The variation will extend the term to December 2024 to fully roll out the solution to users and avoid the risk of impacting the service, the document said.

Additionally, Motorola's solution will now include its off-the-shelf Kodiak push-to-talk (PTT) product. U.K. officials traveled to the U.S. last year to research the product. In addition, the delivery approach and timetable will be amended to be incremental, rather than "big-bang.” The payment profile will be aligned to incentivize delivery. Finally, “historic disputes and claims between the Home Office and Motorola will be settled.”

The contract changes amount to increased pricing, including £44 million (US$57 million) for the additional one-year extension, £12 million (US$15.6 million) for enhanced support for the Kodiak product and £26 million (US$33.8 million) for additional capability to enable delivery, such as additional hardware for testing.

Motorola’s original contract included design of the application, interconnection with the mobile network services procured by the Home Office from a network provider, user service/profile management, device management such as provision of subscriber identity module (SIM) cards, and customer support and service management such as capacity and availability planning.

The value of the contract payable after the changes have been concluded is £297 million (US$386.5 million).

“The need for these changes has arisen because the ESN project is delayed, and therefore changes are required to the delivery timetable,” the notice said. “Further, the change from Wave 7000 to the already working Kodiak product de-risks delivery and enables the program to move to a standardized solution faster.”

The document said the incremental approach enables user benefit to be achieved earlier than the previous “big bang” rollout plan. The Home Office needs to secure delivery of an ESN solution as early as possible to avoid high ongoing costs of the Airwave service, which ESN will replace, and to provide end users with more modern and advanced functionality. The Home Office considers this variation represents the best option for securing delivery as early as possible, the document said.

“The new procurement procedure is the negotiated procedure without prior publication, under Article 32, which is justified because the services being procured under the modified contract can be provided only by Motorola because competition is absent for technical reasons,” the document said. “Motorola has made substantial progress in the development of a technical solution, and any alternative provider would require time to catch up; a change to a new provider would require the migration of technical infrastructure from Motorola to the new provider, causing further delay; the technical interface between Airwave and ESN is owned by Motorola (and Airwave-ESN interworking will be required to facilitate the transition from ESN to Airwave, and to avoid users having to carry both Airwave and ESN devices, and/or have unsatisfactory work-arounds in their control rooms); and the Home Office may be unable to sub-license essential software to a new provider.”

The contract is likely to be 20 percent subcontracted to third parties. The subcontracted services include various specialist technical activities such as billing systems and cyber and digital resilience services. Motorola declared its intention to sub-let some of these elements to relevant specialists.


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