Contract Modifications

Modifications to a contract that was previously approved for funding may be permitted without additional competitive bidding if the proposed changes are considered minor and, therefore, exempt from competitive bidding, under state and local procurement laws.  However, if state or local procurement laws require the applicant to rebid the proposed modification, then it must also comply with the Commission’s competitive bidding requirements before adopting the modification.

A “minor” within the scope of the original contract because it was reasonably anticipated by potential bidders, considering factors such as the extent of any changes in the type of work, performance period, and cost terms as a result of the modification. In assessing whether a change is minor or cardinal, USAC considers the extent of any changes in the type of work, performance period, and cost terms as a result of the modification. A modification falls within the scope of the original contract if it could have been anticipated under the change clause of the contract.

You should discuss potential changes with USAC before making modifications to avoid the risk of losing funding. Although certain minor changes may be exempt from competitive bidding, support is not guaranteed for modified services.

If you determine that the modification is minor and, therefore, exempt from competitive bidding, and the modification changes the contract cost, you must file a revised funding request showing the change in cost. This should happen within 30 calendar days of signing or entering into the contract modification. You must demonstrate that the modification is within the original contract’s change clause or is otherwise a minor modification that is exempt from competitive bidding.

Your reasoning for exemption from the competitive bidding process will be subject to audit.

If the contract modification is not exempt from the competitive bidding process, you must post a new FCC Form 461 (HCF Program Request for Services Form) or FCC Form 465 (Telecom Program Description of Services Requested and Certification Form) and conduct a new competitive bidding process.

Cardinal Changes to Contracts

If state or local procurement laws are silent or are otherwise inapplicable with respect to whether a proposed contract modification must be rebid under state or local competitive bidding processes, the modification must be rebid if it is a “cardinal change.”  A cardinal change occurs when the contract modification requires one party to perform duties that are materially different from those bargained for under the original contract.

The material on these webpages is provided for general information only and should not be relied upon or used as the sole basis for making decisions without consulting the RHC Program rules, orders, and other primary sources of information. Applicants and service providers are ultimately responsible for knowing and complying with all RHC Program rules and procedures.