Thursday, March 10, 2016

FirstNet -- FirstNet tangles with the Department of Commerce over Public Safety Broadband?

Just sat through the webinar for the Pre-Proposal Conference hosted by FirstNet. Did you ever see a kid that was about to make a huge mistake? Any parent will tell you that you are faced with the dilemma of whether or not to let him fail so he can learn; or grab him before he falls so you can guide him down the right course.

No one really wants to submit, or spend the time to submit, without understanding the ownership hierarchy. Will the primary direction come from the federal government and the acquisition role? Or will a newly created entity report to a private entity and its shareholders? How will I get my return on investment and who is in control of that process of the returns?

I really like what the CEO Mike Poth is asking for when it comes to the vision statement for FirstNet, unfortunately, I think he is on another planet of higher thinking when it comes to what is actually being executed. First we hear the glorious speech where Mr Poth talks about FirstNet wanting a public private partnership that meets all the demands and lets free the use of the spectrum for the private market place. Ten minutes later you hear Ms Calahan tell us its a Federal Acquisition process and you will be struck by lightning if you step out of bounds of the procurement process. Seems as though there is still a struggle between delivering FirstNet as a private entity versus a federal agency. Until this gets answered the risk factor is out of this world, especially for a private investor. 

Searching the background of Ms Calahan you can easily discern that she reports to the Department of Commerce and Mr Poth reports to an “independent governing agency” -- FirstNet. How do you let the creative solutions flow, especially for a P3, when you don’t know where, or who, you should be taking direction from? Why would a private entity want to sign-up to, and fund, a “independent governing agency” if it still reports to the Federal Government? That private entity will tell you to make the taxpayers fund it. I spent 10-years in Military Intelligence and everyone knew MI was real-time oxymoron – but this one takes the cake.

The vision I have is the Federal Government dressing up in sheep’s clothing and inviting the sheep into to eat using sweet talk about a Public Private Partnership. Until the real beast rears its head, all FirstNet will get is a typical IDIQ contract under FAR requirements, which means all its plan for a real “public private partnership” will go down the drain. I would be surprised if FirstNet will even get a Joint Venture out of this. Unfortunately, they are too far down the road to alter course now…and that course is going to be a disaster for the Federal Government… again. Unless, FirstNet grows a pair and takes charge of its own future. We can’t have a federal organization like the Department of Commerce overriding the original plan for FirstNet to be a “separate and distinct governing agency”. If FirstNet wants to see any hint of success, it has to establish itself as a private entity and partner with private investment to make the Public Safety Broadband a reality.

The current path for Poth will be a tough one.  :)  But, we have an election cycle coming up and there is a lot of talk about downsizing the federal government. What better the opportunity than an organization like FirstNet, who hasn’t gotten off the ground yet, to declare itself a private entity with Public Safety being one of its primary stakeholders. Forget about the federal government side, FirstNet should solicit a commercial P3 RFP, much like Mexico just did, to solicit private equity ownership in creating a private entity to monetize the 20Mhz of spectrum. Heck even the New Hampshire “Opt Out” P3 RFP is better than what this is turning out to be. The FAR process, and the oversight of the government, is going to ruin this whole deal. Mark my words, if this proceeds in this manner it will be a disaster. Then again, if I were someone that didn’t want this whole thing to succeed, this would be the perfect way to do it. What better way than to introduce complexities of the federal procurement process onto an “independent governing body” to further cloud their approach to success. I think the term is “divide and conquer”, but who am I to know. I’m sorry, but the DOC is the exact opposite of what FirstNet needs.

How do we know there is strife between the ranks of FirstNet and the DOC? Ms Calahan said it best, “they (FirstNet Leadership) keep saying the word “partner”, but I see everyone as a contractor”. Meaning, Ms Calahan represents the Federal Procurement Process and ultimately she is the one in control and reports to the Department of Commerce…not FirstNet. Why all the confusion? If FirstNet wants a federal solution, then just put out a typical IDIQ framework to the market place. Or put out an RFP asking for a Joint Venture. Any reason why they can’t? Well, because the law states the need to be “self sustaining” and “self funded”; a law that a federal agency like DOC has never operated under before yet must follow. I believe the leadership of FirstNet understands this and really wants to go the private route, but they are constantly asking the federal government for help – they are looking in the wrong place for help.  Why else would we even be talking about an IDIQ if it weren’t the chosen model of the federal government – they do everything as an IDIQ. Do what the law describes and act like a “separate governing entity” – in essence be that private entrepreneur and start searching for your investors to pay for your proposed solution – like any private company has to do.  The law already stated that the federal government was not going to give you any cash, so go look elsewhere for the cash you need – private industry!

FirstNet really needs to read the Mexico RFP (or the New Hampshire RFP). The Mexico RFP is being processed exactly how FirstNet needs to act. If FirstNet needs cash to DBOM their solution, then put the RFP out to the right market – the Private Equity market. Why must we shotgun blast an RFP to the open market that only creates more questions than answers. Your market is your funding partners, not technology, not the government, and not an industry specific vertical. I say again..."your market is the Private Equity market!" The context of the the FirstNet RFP being a “objectives based RFP” is the right course – now you just need to sell it to the right people.

PS… it will also help if you know what your talking about when it comes to “Public Private Partnerships” – who do you think is best positioned to know all about P3s -- other than myself? Have you looked at the major EPCs yet? They do a lot of P3s in the vertical industries of transportation, infrastructure and power markets; they also do a lot of work with major Private Equity partners. Did you know that most States are already adopting the P3 framework as part of the State legislation? That’s a hint.

But whom am I other than…..

Just some guy and a blog….

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