New York State has cancelled the multibillion-dollar contract it awarded to M/A-COM to build a statewide wireless network for public safety use, saying the vendor has failed to adequately deliver on the deal.
A document released by the state showed excessive equipment failures after testing, including radios with stuck volume controls, "black screens" that render the devices unusable and microphones that randomly turn on, unintentionally transmitting audio.
According to the state, testing done in November showed that M/A-COM failed to fix 15 of 19 deficiencies described in an earlier complaint.
M/A-COM, however, is disputing the charges. "We believe that M/A-COM has fulfilled its contractual obligations and delivered a state-of-the-art system that would benefit the residents of New York. We recognize that the State's current priorities may no longer support the construction of a statewide network and we have made several attempts to address this amicably with the State. Tyco Electronics and M/A-COM will take all necessary steps to protect the company's rights under the contract," it said in a statement.
The state awarded the contract to M/A-COM -- over its only competitor, Motorola -- in early 2004. By the end of 2008, New York State had spent US$54 million on the project.
If it can overcome M/A-COM's challenges, the state expects to get that money back. Terms of the original contract stipulated that M/A-COM put $50 million in an escrow account that the state could draw from in the event that the company defaulted on the contract, said Angela Liotta, a spokeswoman with the state's chief information officer and office for technology.
In its statement Thursday, the state said it had demanded payment from the escrow account.
The contract also required M/A-COM to replenish that account with another $50 million for the state to recoup additional costs. In addition to the $54 million already spent, the state may find that it made additional expenditures, such as the cost to police who participated in testing the system, said Liotta.
The state still hopes to build the network. "By canceling the contract it doesn't mean we're canceling our commitment," Liotta said.
But that will take more time. Issuing a new request for proposal to find another vendor could take up to 18 months, she said.
The issue in New York might point to larger problems with the way the state handled the building of a statewide system, said Craig Settles, an independent consultant. States would have better luck building such large networks by outlining standards for the network and than offering funding to cities and counties that can contract to get the networks built. The standards would ensure interoperability and set quality-of-service levels. The smaller communities could move faster than the state and might award the contracts to companies with local ties, he said.