Competitive Bidding Catriona Ayer

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Competitive BiddingCatriona Ayer

Train-the-Trainer Workshop September 27-29,
2004 Schools Libraries Division
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Competitive Bidding

• Avoid conflicts of interest
• Independent consultant Service Provider
• Applicant Service Provider
• Open competition and bid evaluation
• Follow the rules FCC and state/local
• Beware of unusual contract clauses
• Applicants must document the process

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Applicant Roles

• Cannot abrogate the responsibility for a fair and
  open process
• Responsibilities
• File Form 470
• Issue RFPs
• Evaluate bids
• Select service provider

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Consultants

• May assist applicants with their responsibilities
• Ensure that Letter of Agency is in place BEFORE
  starting to work on behalf of the applicant
• i.e. dont file a Form 470 for an applicant
  before the date on the LOA
• LOAs are required even if the applicant is
  signing the forms. If a consultant is doing the
  work, they need a LOA.
• Applicants should exercise caution with respect
  to consultants who may have conflict of interest
  issues that might interfere with their ability to
  provide impartial advice.

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Roles for Service Providers

• Appropriate roles
• Respond to bids.
• Comply with all certifications made on all forms
• Assist with preparation of the Item 21 attachment
  for the Form 471
• Provide answers to PIA regarding the specific
  products and services on FRNs.

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Roles for Service Providers

• Inappropriate roles
• Assist applicant with competitive bidding process
• Respond to inquiries from PIA regarding the
  selection of the winning service provider.
• Provide suggested RFPs or other competitive
  bidding documents to applicants
• Be part of the bid selection process

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More Roles for Service Providers

• Cannot file Form 470 on behalf of applicants.
• Cannot be involved in competitive bidding process
  except as bidders.
• Can respond to Form 470 / RFP.
• Can provide Item 21 attachment information to
  applicant.
• Can support applicant on technical questions from
  PIA relating to products and services to be
  provided.
• Provide discounted bills/reimbursement.

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Form 470

• Must 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.
• Services requested must tie to services requested
  on 471.
• Certify that services sought represent the most
  cost-effective means for meeting your
  educational/library technology plan goals.

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Form 470 (cont.)

• Must include all entities that will be receiving
  services, including non-instructional facilities.
• If 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.

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Description of Services

• Cannot be encyclopedic list of services.
• Must be sufficiently detailed so that potential
  bidders can formulate responsive bids.
• If RFP is cited on the 470, then the RFP must
  provide sufficiently detailed information so that
  potential bidders can formulate bids.
• Must result in the selection of specific products
  in specific quantities at specific prices.

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Requests for Proposal (RFP)

• aka RFI, ITB, RFQ, etc.
• Based on Technology Plan and does not exceed the
  complexity of the Technology Plan.
• Form 470 must accurately state whether or not you
  have or intend to post an RFP for these services.
• RFP must be available to bidders for 28 days (not
  just the Form 470).

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Limiting bidders

• Applicants can set some requirements for bidders.
• 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).
• Applicants must be prepared to explain if/how
  they disqualified bids.

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Other Requirements

• Must also comply with all state and local
  procurement rules.

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Selecting the Winning Bid

• Document the selection process (bid score sheet)
• Price must be the primary factor, considering
  only ELIGIBLE services
• 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.
• May 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.

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State Master Contracts

• State Files Form 470
• Applicant can cite Form 470, file 471
• Applicant Files Form 470
• Consider SMC as bid response
• Applicants may choose to memorialize the
  selection, but are not required to do so.

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Types of State Master Contracts

• Single winner
• Applicants do not need to justify the selection
  of the wining bidder
• Multiple winners
• Applicants must be able to document why they
  selected the specific provider off the master
  contract.
• Multiple Award Schedules
• Applicants must be able to document why they
  selected the specific provider off the multiple
  award schedule.
• Only Terms and Conditions, not prices
• These contracts do not meet FCC contract
  requirements.

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Contracts

• Tariffed services provided under contract are
  contracted services.
• Month-to-month and tariffed services do not need
  contracts.
• Internal connections are presumed to be
  contracted services.

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Contracts

• The 5th Report and Order requires that all
  contracts be signed and dated by both parties.
  Contracts must be signed before the application
  is filed.
• Quotes are not contracts.
• If 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.

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Contract Dates

• Contracts cannot be signed before 28 days have
  elapsed for both the 470 and RFP (if applicable).
• The contract expiration date is the end date
  before contract extensions are executed.
• 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).

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Documenting Compliance

• 5th Report Order REQUIRES applicants to retain
  ALL documentation regarding selection of service
  provider including (but not limited to)
• Letters of agency and any agreements with all
  consultants
• Technology Plan and Plan Approval letter
• RFP, including evidence of publication date
• Any and all bids (winning and losing)
• Documents describing bid evaluation criteria and
  weighting
• Any correspondence with potential bidders
• Documents related to the selection of the service
  provider(s)
• Signed and dated copies of contracts.

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Antitrust Violations

• Federal and state laws prohibit business
  practices that unreasonably deprive consumers of
  the benefits of competition, resulting in higher
  prices for inferior products and services.

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Antitrust Violations

• Federal prosecution can occur for certain types
  of violations, including but not limited to
• Applicants having an interest in a company that
  is listed on their Form 471
• Kickbacks and bribes
• Bid rigging (criminal)
• Price fixing (criminal)

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Take Certifications Seriously

• You make certification on FCC forms under penalty
  of federal criminal law.
• Example
• 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.
• New certifications on Form 471 regarding the
  competitive bidding process
• Complied with all FCC rules.
• Not received anything of value or promise of
  anything of value from a service provider other
  than requested services.

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Suspension and Debarment

• Individuals 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.
• List maintained on SLD web site.

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Recent Cases

• Connect 2
• Principals have been debarred.
• According to the criminal complaint, Connect 2
• Failed to charge school for their share of the
  cost of goods and services and passed that cost
  on to USAC.
• Provided false documents to USAC to show that the
  schools had paid their share.
• Took actions to cover up its failure to require
  schools to pay their share.

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Recent Cases

• NEC- Business Network Solutions, Inc.
• Plea agreement with U.S. Department of Justice.
• NEC was charged with
• Allocating contracts, bid rigging, inflating bids
• Agreeing to submit false and fraudulent documents
  to USAC to conceal that it would receive payment
  for goods and services that are ineligible for
  funding.
• Donating free items to the schools that it
  planned to bill USAC for.
• Submitting false and fraudulent documents to USAC
  during its review of applications.

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QUESTIONS