1. Competitive Bidding Catriona Ayer Train-the-Trainer Workshop September 27-29, 2004 Schools & Libraries Division

2. Slide #2Schools and Libraries Division Competitive Bidding uAvoid conflicts of interest n Independent consultant = Service Provider n Applicant = Service Provider uOpen competition and bid evaluation uFollow the rules – FCC and state/local uBeware of unusual contract clauses uApplicants must document the process

3. Slide #3Schools and Libraries Division Applicant Roles uCannot abrogate the responsibility for a fair and open process uResponsibilities: n File Form 470 n Issue RFPs n Evaluate bids n Select service provider

4. Slide #4Schools and Libraries Division Consultants uMay assist applicants with their responsibilities uEnsure that Letter of Agency is in place BEFORE starting to work on behalf of the applicant n i.e. don’t file a Form 470 for an applicant before the date on the LOA n LOAs are required even if the applicant is signing the forms. If a consultant is doing the work, they need a LOA. uApplicants should exercise caution with respect to consultants who may have conflict of interest issues that might interfere with their ability to provide impartial advice.

5. Slide #5Schools and Libraries Division Roles for Service Providers uAppropriate roles: n Respond to bids. n Comply with all certifications made on all forms n Assist with preparation of the Item 21 attachment for the Form 471 n Provide answers to PIA regarding the specific products and services on FRNs.

6. Slide #6Schools and Libraries Division Roles for Service Providers u Inappropriate roles: n Assist applicant with competitive bidding process n Respond to inquiries from PIA regarding the selection of the winning service provider. n Provide suggested RFPs or other competitive bidding documents to applicants n Be part of the bid selection process

7. Slide #7Schools and Libraries Division More Roles for Service Providers uCannot file Form 470 on behalf of applicants. uCannot be involved in competitive bidding process except as bidders. uCan respond to Form 470 / RFP. uCan provide Item 21 attachment information to applicant. uCan support applicant on technical questions from PIA relating to products and services to be provided. uProvide discounted bills/reimbursement.

8. Slide #8Schools and Libraries Division Form 470 uMust be based on, and supported by, the technology plan. The complexity of the services sought on the 470 should not exceed the complexity of the technology plan. uServices requested must tie to services requested on 471. uCertify that services sought represent the most cost-effective means for meeting your educational/library technology plan goals.

9. Slide #9Schools and Libraries Division Form 470 (cont.) uMust include all entities that will be receiving services, including non-instructional facilities. uIf there is a significant period of time between the posting of the 470 and the contract award date, applicants must be able to explain the delay.

10. Slide #10Schools and Libraries Division Description of Services uCannot be encyclopedic list of services. uMust be sufficiently detailed so that potential bidders can formulate responsive bids. uIf RFP is cited on the 470, then the RFP must provide sufficiently detailed information so that potential bidders can formulate bids. uMust result in the selection of specific products in specific quantities at specific prices.

11. Slide #11Schools and Libraries Division Requests for Proposal (RFP) uaka RFI, ITB, RFQ, etc. uBased on Technology Plan and does not exceed the complexity of the Technology Plan. uForm 470 must accurately state whether or not you have or intend to post an RFP for these services. uRFP must be available to bidders for 28 days (not just the Form 470).

12. Slide #12Schools and Libraries Division Limiting bidders uApplicants can set some requirements for bidders. n For example, applicants may require service providers to provide services that are compatible with one kind of system over another (e.g. Apple vs Windows) or compatible with one kind of hardware (e.g. Cisco switches). uApplicants must be prepared to explain if/how they disqualified bids.

13. Slide #13Schools and Libraries Division Other Requirements uMust also comply with all state and local procurement rules.

14. Slide #14Schools and Libraries Division Selecting the Winning Bid uDocument the selection process (bid score sheet) uPrice must be the primary factor, considering only ELIGIBLE services n Cost of ineligible items (termination fees, new equipment costs, etc) can be included in a different category but cannot be weighted the same as or more than the “Price” factor. uMay not use E-rate to subsidize the procurement of ineligible or unrequested products or services because that constitutes a rebate of the non-discount portion of the costs, which is a violation of FCC rules.

15. Slide #15Schools and Libraries Division State Master Contracts uState Files Form 470 n Applicant can cite Form 470, file 471 uApplicant Files Form 470 n Consider SMC as bid response uApplicants may choose to memorialize the selection, but are not required to do so.

16. Slide #16Schools and Libraries Division Types of State Master Contracts uSingle winner n Applicants do not need to justify the selection of the wining bidder uMultiple winners n Applicants must be able to document why they selected the specific provider off the master contract. uMultiple Award Schedules n Applicants must be able to document why they selected the specific provider off the multiple award schedule. uOnly Terms and Conditions, not prices n These contracts do not meet FCC contract requirements.

17. Slide #17Schools and Libraries Division Contracts uTariffed services provided under contract are contracted services. uMonth-to-month and tariffed services do not need contracts. uInternal connections are presumed to be contracted services.

18. Slide #18Schools and Libraries Division Contracts uThe 5 th Report and Order requires that all contracts be signed and dated by both parties. Contracts must be signed before the application is filed. uQuotes are not contracts. uIf PIA asks for contracts and something else is provided (such as a PO), then applicants must be prepared to prove such a document constitutes a contract pursuant to state contract law.

19. Slide #19Schools and Libraries Division Contract Dates uContracts cannot be signed before 28 days have elapsed for both the 470 and RFP (if applicable). uThe contract expiration date is the end date before contract extensions are executed. n For example, if the contract term is two years plus three one-year extensions, the contract expiration date is the end of the second year (not the end of the fifth year).

20. Slide #20Schools and Libraries Division Documenting Compliance u5 th Report & Order REQUIRES applicants to retain ALL documentation regarding selection of service provider including (but not limited to): n Letters of agency and any agreements with all consultants n Technology Plan and Plan Approval letter n RFP, including evidence of publication date n Any and all bids (winning and losing) n Documents describing bid evaluation criteria and weighting n Any correspondence with potential bidders n Documents related to the selection of the service provider(s) n Signed and dated copies of contracts.

21. Slide #21Schools and Libraries Division Antitrust Violations uFederal and state laws prohibit business practices that unreasonably deprive consumers of the benefits of competition, resulting in higher prices for inferior products and services.

22. Slide #22Schools and Libraries Division Antitrust Violations uFederal prosecution can occur for certain types of violations, including but not limited to: n Applicants having an interest in a company that is listed on their Form 471 n Kickbacks and bribes n Bid rigging (criminal) n Price fixing (criminal)

23. Slide #23Schools and Libraries Division Take Certifications Seriously uYou make certification on FCC forms under penalty of federal criminal law. n Example: u If you certify that you have secured access to sufficient funds to pay for your non-discount share AND YOU HAVE NOT, then this is a false statement that could be prosecuted. uNew certifications on Form 471 regarding the competitive bidding process n Complied with all FCC rules. n Not received anything of value or promise of anything of value from a service provider other than requested services.

24. Slide #24Schools and Libraries Division Suspension and Debarment uIndividuals that are civilly liable or convicted of criminal offenses related to the E-rate will be suspended and then debarred from the program, thereby prohibiting them from consulting, assisting and advising applicants or providers, and receiving funds or discounted services from E-rate. uList maintained on SLD web site.

25. Slide #25Schools and Libraries Division Recent Cases uConnect 2 n Principals have been debarred. n According to the criminal complaint, Connect 2: uFailed to charge school for their share of the cost of goods and services and passed that cost on to USAC. uProvided false documents to USAC to show that the schools had paid their share. uTook actions to cover up its failure to require schools to pay their share.

26. Slide #26Schools and Libraries Division Recent Cases uNEC- Business Network Solutions, Inc. n Plea agreement with U.S. Department of Justice. n NEC was charged with: uAllocating contracts, bid rigging, inflating bids uAgreeing to submit false and fraudulent documents to USAC to conceal that it would receive payment for goods and services that are ineligible for funding. uDonating free items to the schools that it planned to bill USAC for. uSubmitting false and fraudulent documents to USAC during its review of applications.

27. Slide #27Schools and Libraries Division QUESTIONS