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Competitive Bidding Catriona Ayer. Train-the-Trainer Workshop September 27-29, 2004 Schools & Libraries Division. Competitive Bidding. Avoid conflicts of interest Independent consultant = Service Provider Applicant = Service Provider Open competition and bid evaluation
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Competitive BiddingCatriona Ayer Train-the-Trainer Workshop September 27-29, 2004 Schools & Libraries Division
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
Applicant Roles • Cannot abrogate the responsibility for a fair and open process • Responsibilities: • File Form 470 • Issue RFPs • Evaluate bids • Select service provider
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. don’t 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.
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.
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
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.
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.
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.
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.
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).
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.
Other Requirements • Must also comply with all state and local procurement rules.
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.
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.
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.
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.
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.
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).
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.
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.
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)
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.
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.
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.
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.
