Rural Health Care

Step 3 Prepare for Competitive Bidding

Evergreen Contracts

A contract is considered evergreen when it includes more than one funding year and is granted evergreen status by USAC.

An evergreen contract provides the HCP with an exemption from the competitive bidding requirement for future funding years, meaning that the HCP is not required to file the FCC Form 461 or participate in competitive bidding for the life of the contract. HCPs with multi-year contracts that are not given evergreen status must file the FCC Form 461 and participate in competitive bidding for every funding year in which funding will be requested under the terms of the contract. HCPs with evergreen contracts must submit the FCC Form 462 and the FCC Form 463 annually for every funding year in which funding is requested under the terms of the contract (unless the HCP has been approved for a multi-year funding commitment).

How a Contract Becomes Evergreen

USAC reviews every contract to determine whether it is evergreen. Contracts cannot be deemed evergreen without USAC review for compliance with Rural Health Care Program competitive bidding rules and validation that the services purchased in the contract are the most cost-effective.

To be considered evergreen, the multi-year contract must meet the following criteria:

  • Both parties are identified,
  • HCP has signed and dated the contract,
  • Contract specifies the bandwidth, type, and terms of service,
  • Contract has a specific duration,
  • Contract specifies the cost of services to be provided, and
  • Contract includes the physical addresses or other identifying information of the HCPs purchasing from the contract.

USAC will notify the applicant whether its contract has been granted evergreen status in the Funding Commitment Letter (FCL). HCPs applying for HCF Program funding for services through a contract that was not previously deemed evergreen and communicated as such through an RHC Program funding commitment letter (even if the HCP has applied for funding for those services in a previous funding year) are not be eligible for evergreen contract competitive bidding exemption.

In-Contract Purchases and Upgrades

HCPs with evergreen contracts are permitted to add new locations, exercise voluntary contract extensions, and upgrade services without additional competitive bidding, as long as those options were contemplated in the original competitive bidding process, and the contract explicitly provided for them. An HCP must initiate a new competitive bidding process for any contract modification falling outside the scope of its evergreen contract.

Funding for additional services or upgrades on an evergreen contract must be requested on an FCC Form 462.

Existing Telecom Program Evergreen Contracts

Applicants that previously participated in the Telecommunications Program or Internet Access Program and had a contract designated as evergreen may choose to seek funding for services provided in accordance with that evergreen contract through the HCF Program without undergoing additional competitive bidding, as long as the services are eligible for support under the HCF Program and the applicant complies with all program rules and procedures.

Voluntary Extensions

Applicants can exercise voluntary options to extend an evergreen contract without undergoing additional competitive bidding if the:

      1. Voluntary extension is memorialized in the evergreen contract;
      2. Decision to extend the contract occurs before the applicant files the FCC Form 462; Funding Request Form, for the funding year when the contract would otherwise expire, and
      3. Voluntary extension does not exceed five years in the aggregate.

Evergreen Contracts Ending Mid-Fund Year

The end date for funding is determined by the contract expiration date provided on Line 31 of the FCC Form 462. If the contract ends before the end of the funding year (June 30th), the HCP is required to post a new FCC Form 461, allow for the 28-day competitive bidding process, and submit a new FCC Form 462 to request funding for the remainder of the funding year.