Inspector General Report Finds FirstNet Public Disclosure, Contracting Inadequacies
Tuesday, December 09, 2014 | Comments

The Department of Commerce Inspector General found that the First Responder Network Authority (FirstNet) confidential and public disclosure monitoring procedures were inadequate during its start-up years in 2012 and 2013. In addition, some board members didn’t file timely public financial disclosure reports, and its contracting practices lacked transparent award competition and oversight.

The findings were included in a report from the Commerce Office of Inspector General (OIG) released Dec. 5. The report was made public Dec. 9.

The report also found that FirstNet’s board operational procedures for monitoring potential conflicts of interest need improvements. During its governance personnel committee meeting Dec. 9, Chairwoman Sue Swenson acknowledged the report, and FirstNet implemented a new policy requiring board members to recuse themselves for conflicts of interest and note it for the record during the four committee meetings Dec. 9 and the Dec. 10 board meeting.

Specifically, the report abstract said the Official of Government Council (OGC) couldn’t provide a record of all FirstNet confidential and public financial disclosure files. One board member didn’t disclose an interest in a conflicting company, the report said. Another board member submitted a required public disclosure form five months late, and two other board members submitted inaccurate time and attendance records. The report does not name the board members who were out of compliance.

The report said that two contracts were awarded improperly. One contract was a sole-source procurement without appearing to meet federal acquisition requirements, and one had undue influence from a FirstNet official, who interfered with the contractor’s ability to independently recruit and hire consultants. There was inadequate surveillance over two contracts, resulting in about $11 million in unsupported costs to the government, and the contracting officer’s representative approved duplicate and unsupported charges for one contract and rates higher than that contract allowed, the report said.

The report includes specific recommendations for the secretary of Commerce, Commerce general counsel, FirstNet chair and the department’s senior procurement official.

"We concur with the report’s administrative recommendations, most of which are in place already," said Commerce Department spokesman Jim Hock. "These issues, however, were specific to the unique circumstances that existed during FirstNet’s early start-up operations, and we continue to take the steps necessary to ensure the integrity of the ethics program and contracting policies and procedures utilized by FirstNet... The department took a number of steps to ensure that the early FirstNet contracts were awarded appropriately and produced valuable research and analysis that laid the foundation for executing FirstNet’s mission.”

FirstNet is an independent authority within the National Telecommunications and Information Administration (NTIA). NTIA, FirstNet and the Department of Commerce provided a joint response that is included in the report. “The early FirstNet contracts resulted in valuable work product that has been critical to the rapid establishment of the organization,” the letter said. “FirstNet sought and received first-rate feasibility research, technical analysis, strategic planning and outreach services from highly specialized consultants whose work product has laid the groundwork for executing FirstNet’s mission.”

The report questions $27,755 in costs from invoices because of errors. The department said it recovered $16,413 of those costs.

The joint statement said FirstNet is focused on enhancing its compliance and risk assessment programs to help ensure that it will meet its future operational challenges as it grows.

The OIG report follows 2013 allegations by former FirstNet board member Paul Fitzgerald about problems with ethics and conflicts of interest and transparency of the board. In October 2013, then FirstNet Chairman Sam Ginn asked the Commerce OIG to take over the investigation of Fitzgerald’s allegations.

A Special Review Committee (SRC) composed of FirstNet board members had been handling the investigation and in September 2013 released a first report that detailed the SRC’s investigation into allegations of a lack of openness and transparency, board member access to information and a lack of input from public safety. The report found no illegal activity by the board.

“Unfortunately, the Inspector General’s report confirms what we have suspected and long feared — that FirstNet had been operating without proper processes and with disregard for laws that guard against impropriety,” said House Communications and Technology Subcommittee Chairman Greg Walden. “Questions of ethics threaten the legitimacy of FirstNet’s efforts and ultimately undermine its important mission to build a nationwide public-safety broadband network. We will continue our thoughtful oversight and hold additional hearings early next year and expect to see significant progress in implementing the Inspector General’s recommendations.”

FirstNet Acting General Manager TJ Kennedy testified during a House Subcommittee on Emergency Preparedness, Response and Communications hearing on interoperable communications last month, although the hearing didn’t address the allegations or OIG investigation.

“The Commerce Inspector General’s report serves as a note of caution to everyone involved in FirstNet — they must be diligent about following the rules," said Sen. John D.Rockefeller IV, author of early legislation allocating the D block to public safety. "FirstNet is a rare hybrid with a unique responsibility. It has to carefully balance the need for both effective government oversight and the autonomy necessary to launch a first of its kind nationwide wireless broadband network for first responders."

“I appreciate that the investigation has been completed and recognize the importance and value of the IG’s recommendations," said Harlin McEwen, chair of the FirstNet Public Safety Advisory Committee (PSAC). "I also look forward to continuing the progress being made by FirstNet. FirstNet’s policies and practices have changed considerably. The openness and transparency now in place is a benefit to all stakeholders, and I look forward to working with the FirstNet board and staff to move the process forward.”

The 53-page OIG report is here. A one-page abstract is here.

FirstNet Chairman Sue Swenson posted a blog about the report here.

Your comments are welcome, click here.

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