Transcript Slide 1

How Do I Run a Good
Competitive Bidding Process?
Back to the New Basics
Schools and Libraries Division
Washington, DC • Orlando • Boston • New Orleans • Cleveland • San Francisco • Phoenix
September/October 2007
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Overview
 Why are we talking about this again?
 Rules of the Road
 What we see
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Are there problems?
 Yes!
 Highly public instances of waste, fraud and
abuse reported in the media, US DOJ
 More instances of competitive bidding
violations, which may not be intentional,
but still result in funding
reductions/denials.
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% FRNs Denied Due to Competitive Bidding
Funding Year 2006
Competitive bidding
denials
32%
All other denials
68%
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Competitive Bidding Violations Breakdown
Funding Year 2006
Insufficient support
Cost effectiveness review resources
3%
5%
Bidding violations
15%
Contract violation
42%
Insufficient documentation
14%
28 day w aiting period
violation
21%
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Bidding Violations
 Price was not primary factor in selecting service provider
 Service Provider involved with preparing 470
 Service Provider involved with competitive bidding
process
 Applicant’s consultant associated with Service Provider
 Contract signed before RFP due date
 Failure to provide competitive bidding support
documentation (e.g. bids, vendor bid score sheet, RFP)
 Consulting services provided before Letter of Agency
 Failure to advise bidders that RFP was available
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Know Your Role
 Applicants
– Write tech plan, file Form 470 and write RFP, evaluate
bids, select provider, document the process, file Form
471, select invoice method
 Service Providers
– Respond to 470/RFPs, assist with preparing Item 21,
provide answers on specific goods and services
requested, but NOT on competitive bidding
 Consultants
– Make sure that you have a Letter of Agency
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Technology Plan
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Creation date
–
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Month and year that the plan is “written”
Sufficient detail to support and validate the
services requested
Five elements
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Goals/strategy for using technology
Professional development strategy
Needs assessment
Sufficient budget
Evaluation process
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Selective Review
 Further review of
– Budget
– Necessary Resources
– Competitive Bidding and Contracts
– Technology Plan
 Sample Selective Review Information
Request (SRIR) available on SLD website
 Retain your documentation!
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Budget
 Purpose is for you to show us you can
fund your share
 Operating budget (or draft) has dates that
cover the funding year (July – June)
 Budget documentation should clearly
identify applicant’s share (e.g., expense
line item)
 Can provide letter for reasonable
expectation
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Budget
 More about “reasonable expectation”
– You don’t have the money in your hands
now but expect to have it after July 1
– We understand that your budget cycle may
not coincide with our review cycle
– Will have to “show the money” during Form
486 review for the entire BEN for the year
– If a shortfall, we will work with you to
cancel FRNs
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Payment Plans
 Applicants are required to pay their share at
the same time that USAC pays the discount
amount.
– Service Provider certifies that the invoices
they submit are for services that “have been
billed to service provider’s customers.”
– Therefore, deferred payment plans that allow
the applicant to pay after USAC has paid will
jeopardize a funding request.
– FCC Rules include a presumption that the
non-discount share will be paid within 90
days.
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Necessary Resources
 Do you have the other necessary resources?
– Are there end user computers?
• Must have reasonable plans to fully utilize all
internal connections for which you are
requesting discounts (e.g., 2-year plan to get
computers for all network drops)
– Do you have software to run on the computers?
– Staff trained on how to use the technology?
– Electrical capacity?
– Can you maintain your eligible and ineligible
equipment?
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Form 470/RFP
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Form 470 indicates types of products
and services ordered on the Form 471
Form 470/RFP is based on tech plan
Form 470 and RFP must be available for
28 days
Define and document your evaluation
process
Indicates who will be receiving the
services
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Form 470/RFP
 Be able to explain what you were asking
for (avoid generic descriptions or
statements that are overly broad)
 Post for what you want (multi-year
contract, type of service, voluntary
contract extensions)
 Indicate on your Form 470 if you are
issuing an RFP
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Form 470/RFP
 Applicants must be prepared to explain if
and how they disqualified bids.
 Applicants must inform all bidders of any
requirements that could lead to
disqualification.
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Competitive Bidding
 Fair and open competitive bidding process
 Avoid conflicts of interest
– Independent consultant Service Provider
– Applicant  Service Provider
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Open competition and bid evaluation
Follow the rules – FCC and state/local
Read the contract fine print
Document the process!
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Competitive Bidding
 Selecting the winning bidder
– Price must be the primary factor, considering
only ELIGIBLE goods and services.
– Solution must be cost-effective (not just the
most cost-effective)
• Ysleta Order, para. 54: Routers priced at twice the
market price would not be cost effective
 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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Vendor Selection
 Keep documentation of your selection
process
 Create your selection matrix and follow it
 If using a multi-round selection process,
price of the eligible goods and services
must be the primary factor in every round.
 USAC template available!
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Keep dates in order
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Remember the correct order for dates:
– Allowable Contract Date (28 days after 470)
THEN
– Contract Award Date
THEN
– Form 471 filing
THEN
– Form 471 Certification date
ALL BEFORE
– Window close
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State Master Contracts
 Applicant files Form 470
– Can use State Master Contract as a bid
response
– Contract Award date is date the
applicant selected the State Master
Contract as its winning bid
 State files Form 470
– Applicants may cite that Form 470
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State Master Contracts
 Single winner
–Applicants do not need to justify the
selection of the winning bidder
 Multiple winners
–Applicants must be able to document
why they selected the specific
provider off the master contract
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State Master Contracts
 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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Pattern Analysis
 USAC reviews a group of applications,
usually looking at competitive bidding
information.
 Are there any elements that are the same
across applications?
 Applicants are given an opportunity to
explain the similarities.
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A tale of three districts
District A
District B
District C
Identical RFP
format, font,
table of
contents
Identical
description of
services sought
and quantities
Identical RFP
format, font,
table of
contents
Identical
description of
services sought
and quantities
Identical RFP
format, table of
contents but
font changed
Identical
description of
services sought
and quantities
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A tale of three districts
District A
District B
District C
Description of
how they
selected the
vendor identical
Same typos
and
grammatical
errors
Description of
how they
selected the
vendor identical
Same typos
and
grammatical
errors
Description of
how they
selected the
vendor identical
Same typos
and
grammatical
errors
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A tale of three districts
District A
District B
Forgot to
change school
name to own
My service
Cancel my
provider
application
listened to my
needs and then
wrote the RFP
and the SR
responses
District C
I don’t know
why others are
similar. We
often share with
other districts.
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Documentation
 Retain documents to show your compliance:
– Letters of Agency and any agreements with
all consultants
– Technology Plan and CTPA Plan Approval
letter
– RFP, including evidence of publication date
and any solicitation you did
– Any and all bids (winning and losing)
– Email to yourself if you get no or one bid
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Documentation
 Retain documents to show your compliance:
– 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
– Also, see further list on USAC website
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Lack of Documentation
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Leads to difficulties answering PIA
Delays your FCDL
Reduces/denies funding
Leads to further questions from Site
Visitors and Auditors
 Could result in you having to return cash
to USAC
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Questions?
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