Schools and Libraries

Step 1: Inappropriate Roles for Service Providers

In many circumstances, service providers may not provide assistance to applicants during the application process.

Following is a list of roles that are inappropriate for service providers. Please note that this is not an exhaustive list.

A service provider cannot approve technology plans.

A service provider cannot serve as the Form 470 contact person.

The FCC has ruled that if a representative or employee of a service provider serves as the contact person on a Description of Service Requested and Certification Form (Form 470), it will have the effect of compromising the competitive bidding process. Applicants must conduct an open and fair bidding process. It is unlikely that the applicant can have a fair and open competitive process if the bids are submitted to and the evaluation is carried out by a representative or employee of a service provider that participated in the bidding process.

It should be noted that any service provider contact information (i.e., name, address, email address) on the Form 470 renders that Form 470 invalid when the services the applicant is requesting are the same services the service provider furnishes. For example, if the applicant indicates on the Form 470 that it is seeking internal connections and an internal connections service provider's contact information is on the Form 470, the entire Form 470 is rendered invalid and cannot be used to support any applicant funding requests. The presumption is that the service provider may be participating in the competitive bidding process, therefore inhibiting an open and fair bidding process. The applicant can rebut the presumption by proving that, in fact, the service provider did not participate in the competitive bidding.

However, if the Form 470 listed a representative or employee of a service provider which furnishes internal connections as a contact, and that Form 470 sought only telecommunications services, then the Form 470 would be considered valid (to the extent everything else about that Form 470 complied with program rules).

A service provider cannot provide completed or duplicate RFPs

Service providers should not prepare Requests for Proposals (RFPs) for applicants. Applicants are responsible for this part of the competitive bidding process. While service providers may contribute information in a neutral way to help applicants prepare the RFP, the service provider may not provide the completed product.

An effective RFP contains sufficient detail about location and quantity of products or services sought by the applicant to give prospective bidders enough information to prepare a responsive bid. For this reason, duplicate RFPs that contain identical details except for the name of the applicant seeking bids are not allowable. The use of such RFPs may be used as evidence that the applicant failed to conduct a fair and open competitive bidding process.

A service provider cannot sign the Form 470 or Form 471

No person associated with a service provider should sign the Form 470 or Services Ordered and Certification Form (Form 471). There should never be a situation where a person is authorized by an applicant to make decisions for the applicant and at the same time be associated in any capacity with the service provider that submits bids in response to the Form 470 and appears on the Form 471. If such a relationship is discovered, it may lead to enforcement action and denial of funding.

A service provider cannot make final determinations about eligibility

If an applicant asks questions about specific products or services eligibility and the service provider does not know the answer, it is appropriate for the service provider to seek a determination from USAC. Such determinations can be requested from USAC by via email.

A service provider cannot provide funding for the applicant's non-discount portion

The applicant must truthfully certify that it has on hand or fully committed the necessary resources (including funding) to make effective use of the products and services for which it is seeking discounts. Such resources must be clearly identified and committed by the applicant at the time the applicant files the Form 471. The service provider may not seek or assist in locating other resources (such as grants or foundations) to pay the non-discount portion of the products or services, unless such funds are committed to the applicant prior the filing of the Form 471. The applicant has an obligation to pay the non-discounted portion.

A service provider cannot waive the applicant's non-discount portion

Applicants, even at the highest discount level, must spend some of their own money on the discounted products and services. This requirement provides an incentive to make the most appropriate and cost-effective decisions about procuring products and services. It is a violation of program rules for the service provider to waive the applicant's non-discount portion or otherwise not require payment. If USAC becomes aware of such a situation, funding may be denied, reduced, or canceled and the service provider may be subjected to enforcement action.

A service provider cannot coerce or pressure the applicant to use a specific service provider

Generally, it is a violation generally of state and local procurement laws for a service provider to exert undue influence on an applicant in order to induce that applicant to enter into a contract or otherwise purchase products or services from the service provider. If USAC determines that a service provider has engaged in coercive practices or if USAC receives a complaint from an applicant, an investigation may lead to enforcement actions and possible reduction or loss of funding.

Coercive actions include, but are not limited to, contracts that presume a relationship with subcontractors or other service providers not chosen by the applicant, the inducement to contract with the service provider as a result of "free" assistance in completing application forms, the offer of free or heavily discounted equipment as an inducement to sign a contract or purchase order, and contracts that contain penalty clauses.

A service provider cannot interfere with the competitive bidding process

Service providers, through the actions of their representatives and employees, may not interfere with or obstruct the applicant's competitive bidding process. The applicant is required to conduct a fair and open competition to seek the most cost-effective solution to its technology needs. Price must be the most important (primary) factor in consideration (the factor with the greatest weight), but need not be the only consideration. Other factors may include the service provider's experience, the ability of the service provider to meet time deadlines or geographical needs, the quality of the work, and the ability of the service provider to provide necessary maintenance and assistance.


Last modified on 2/25/2008