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In This Week's Issue
» Funding Status Update
» Basic Maintenance Cost-Effectiveness Reviews
» E-Rate Updates and Reminders
» Schools and Libraries News Brief dated January 18 — Bid Evaluation

E-Rate Central News for the Week
January 21, 2013

Introduction

The E-Rate Central News for the Week is prepared by E-Rate Central. E-Rate Central specializes in providing consulting, compliance, and forms processing services to E-rate applicants. To learn more about our services, please contact us by phone (516-801-7804), fax (516-801-7814), or through our Contact Us Web form. Additional E-rate information is located on the E-Rate Central Web site.

Funding Status

The FY 2013 Form 471 application window opened on Wednesday, December 12, 2012, and will close at 11:59 p.m. (EDT) on Thursday, March 14, 2013.

Wave 27 for FY 2012 will be released on Wednesday, January 23, 2013, for $35.1 million. Priority 2 funding is being provided at 90%, and is being denied at 89% and below. Cumulative funding for FY 2012 is $1.77 billion.

Wave 77 for FY 2011 will be released on Thursday, January 24, 2013, for $4.7 million. Priority 2 requests are being funded at 88% and above, and denied at 87% and below. Cumulative funding for FY 2011 is $2.50 billion.

Wave 107 for FY 2010 will be released on Friday, January 25, 2013. Priority 2 requests are being funded at all discount levels. Cumulative funding for FY 2010 is currently $3.07 billion.

Basic Maintenance Cost-Effectiveness Reviews

As of FY 2011, restrictions were placed on the eligibility of unbundled warranties and other forms of fixed-price basic maintenance contracts. Effectively, the FCC sought to limit discounts on Basic Maintenance of Internal Connections to work actually performed. Despite subsequent clarifications, thorny issues remain as to estimates of reasonable maintenance costs. As it reviews funding requests for basic maintenance, USAC applies its own guidelines as to the reasonableness of funding requests based on the types of equipment to be maintained and the size of the applicants. When those thresholds are exceeded, applicants may be asked to justify the cost-effectiveness of their funding requests.

The following is a recent list of USAC's cost-effectiveness questions on basic maintenance:

  1. Please indicate the tasks that will be performed as basic maintenance under this agreement, and the cost or number of hours allocated per task.
  2. Please provide in detail how the cost of maintenance was derived. How many buildings are associated with this FRN?
  3. How many total rooms are associated with the maintenance request?
  4. In addition to the ### students, how many total teachers and staff will use the equipment being maintained under this FRN?

Comment:  As suggested in questions # 2-4, cost-effectiveness reviews of basic maintenance may be triggered when requests exceed certain internal USAC building and/or per user thresholds.

  1. What is the hourly technician rate for maintenance?

Comment:  Hourly rates are particularly important since most maintenance expenses are billed on a time and materials basis.

  1. Please indicate if any cabling maintenance is part of this contract. If yes, please indicate the total number of cabling drops to be maintained, the total number of classrooms associated with cabling maintenance, and the cost of the cabling maintenance portion only.

Comment:  Presumably, USAC expects that maintenance costs on cable plant will be less than on electronic equipment such as switches, routers, and hubs.

  1. Please indicate if there are any special circumstances, rationale, or justification that we should be aware of that would validate your funding request as cost effective.

Comment:  Responses to this question are critical if applicants are to explain why their requested funding exceeds USAC's guideline thresholds.

  1. Please provide a description of how you chose your service provider as a cost effective source for the services requested.

Comment:  This is a particularly insidious question. It suggests that USAC may be concerned that seemingly high-cost maintenance agreements were the result of less than fair and open competitive bidding procedures.

E-Rate Updates and Reminders

Extended Deadlines Expiring January 28th:

The extended FY 2011 recurring service invoice deadline, previously set to expire last October 29th, is January 28, 2013. The January 28th date corresponds to the regular invoice deadline for non-recurring services with a September 30, 2012, service delivery deadline.

The extended FY 2012 Form 486 deadline for Waves 1-12 is also January 28th. The normal 120-day deadline will apply for other later FY 2012 waves. For example, the Form 486 deadline for Wave 13, issued October 2, 2012, will be January 30, 2013.

"Free" Phone Eligibility Watch:

As discussed in our newsletter of January 11th, the FCC and USAC had recently provided guidance to Jive Communications on the bundling of "free" handsets under Priority 1, managed VoIP services. The guidance apparently dealt with the processing of associated FRNs for FY 2012, and may or may not have indicated how such bundling of end-user equipment would be handled for FY 2013. Because neither the FCC nor USAC had made this guidance available to applicants and other service providers, and because we are at the height of the procurement cycle for FY 2013 applications, we had expected — or, at least, hoped — for some formal announcement on the issue last week. So far, nothing!

Schools and Libraries News Brief Dated January 18 – Bid Evaluation

The SLD News Brief for January 18, 2013, discusses procedures for closing the competitive bidding process and evaluating bids. The following topics are discussed:

  • Closing the competitive bidding process:  The bidding process may not be closed until at least 28 days following the posting of the associated Form 470. If an RFP was used, and was released after the Form 470 was posted, the bidding process may not be closed until 28 days after the RFP's release date.
  • Disqualification reasons:  E-rate bidding rules have long permitted the disqualification of certain bids, as long as the reasons for disqualification are reasonable and disclosed. The News Brief indicates that disqualification reasons must be "binary," e.g.:
    • The service provider must be bonded
    • The service provider must have a Service Provider Identification Number (SPIN)
    • The bid must contain responses to all five of the questions listed in the RFP
  • Constructing an evaluation:  See our template for a bid evaluation matrix in the Competitive Bid Response section of the E-Rate Central web site.
  • Requesting tariffed/month-to-month services and contracted services.
  • Retaining documentation:  At a minimum, retain:
    • The FCC Form 470
    • The RFP, if one is issued
    • Questions from potential bidders and your answers
    • Copies of winning and losing bids (including disqualified bids)
    • The final bid evaluation matrix and any supporting documentation
    • The contract, if one is signed
Disclaimer: This newsletter may contain unofficial information on prospective E-rate developments and/or may reflect our own interpretations of E-rate practices and regulations. Such information is provided for planning and guidance purposes only. It is not meant, in any way, to supplant official announcements and instructions provided by either the SLD or the FCC.