The FCC issued an instructive Order (FCC 25-87) last week denying two applications for review filed by Brooklyn Pubic Library involving a USAC decision to retroactively deny funding on a FY 2014 application for internet services and to seek full recovery of funds. The decision hinged on a flawed competitive bid analysis in which the library claimed that a ministerial and clerical (“M&C”) transposing two scores in the pricing algorithm led to the selection of the highest cost vendor. The library asked the FCC to overlook the M&C error or, at most, limit the return of funds to the difference between the erroneously high bid and what would have otherwise been the winning bid. The FCC rejected both arguments.
Because the FCC sometimes overlooks M&C errors when deciding on Requests for Review and/or Waiver, it is instructive to consider the FCC’s logic in this instance. The key sentence in the FCC’s Order reads: “When an applicant argues that an error is ministerial or clerical, the Commission considers whether the effect of the error was substantive or procedural in making its determination whether to grant or deny the waiver request.” A footnote referencing an earlier Bishop Perry decision provides an expanded explanation of the difference between “substantive” and “procedural” reading:
Bishop Perry Order, 21 FCC Rcd at 5321, para. 11 (illustrating two types of “errors” that can occur, “those that could not result[ ] in an advantage for [the applicant] in the processing of their application”—i.e., a procedural error—or those which result in an “applicant receiving more funding than it was entitled to”—i.e., a substantive error). The types of errors that the Commission has waived as “ministerial or clerical” errors include mistyping a number or using the wrong name or phone number on an application. These errors could not have resulted in the applicant receiving more funding than it was entitled to and are, procedural in nature.
Having lost on the procedural nature of the M&C error, the library argued that “…requiring the library to return the full amount of disbursed funding will cause significant detriment to the residents of Brooklyn” and that the “special circumstances” of this case argues that the FCC should “refrain from seeking full recovery” — i.e., that the library should have to return only the difference between the amount initially claimed and the amount that would have been charged by the correctly winning vendor.
The FCC rejected this argument as well finding that “…this was a substantive error, causing the library to not select the most cost-effective service offering and resulting in the library receiving more E-Rate funding that it was entitled to, thereby violating sections 54.504(a)(ix) and 54.511(a) of the Commission’s rules, and thus fails to constitute a special circumstance to warrant a waiver.
The Brooklyn Public Library decision is prime example of the point that we stress on all our E‑rate training sessions, that competitive bidding is the most crucial step in the entire E-Rate application/funding process. The decision’s timing, coming less than one month before the opening of the FY 2026 application window, could not be more appropriate.