FCDL Comment:
DR1:USAC determined that the applicant did not comply with competitive bidding rules. While we acknowledge the receipt and review of the intent to deny or comad response, the FRNs are being denied since we could not determine a fair and open competitive bidding process for the following reasons below. 1) As a result of the competitive bidding process, Missouri Research and Education Network (MOREnet) entered into a contract with Sho-Me Technologies, LLC (Sho-Me) (SPIN 143004637) for Fiber Indefeasible Rights of Use (IRU) services on March 19, 2014. Program rules require that applicants conduct a fair and open competitive bidding process. See 47 C.F.R. § 54.503. To do so, applicants must post a FCC Form 470 with USAC and wait 28 days before making commitments with the selected providers of services. See 47 C.F.R. § 54.503(c). During the review, it was noted that MOREnet issued a Request for Proposal (RFP) (RFP #14-4006-HR-U) on December 16, 2013 with a due date for responses on January 30, 2014. Sho-Me submitted a bid response to the RFP on January 30, 2014. However, the associated FCC Form 470 No. 115400001212942 was posted on February 3, 2014 on USAC’s website and the allowable contract date was March 3, 2014. The applicant indicated that an RFP addendum was not issued and there were no additional steps taken by the applicant to notify potential bidders of the posted FCC Form 470 other than the submission on the USAC website. MOREnet’s competitive bidding process violated FCC rules because the RFP due date was before the FCC Form 470 was posted and potential bidders could not have properly submitted bids responding to it.2) USAC also found that email correspondence between MOREnet and Sho-Me noted that MOREnet and Sho-Me engaged in discussions prior to the issuance of the RFP and FCC Form 470, in which Sho-Me was involved in developing specifics for the fiber project of which MOREnet sought E-rate funding for and was also provided with information that was not made available to the public. FCC Rules require applicants to conduct a fair and open competitive bidding process by ensuring all potential bidders have access to the same information and that no bidder has advance knowledge of the project information. See 47 C.F.R. §§ 54.503(a), (c)(1)(ii).||DR2:USAC determined that the applicant did not comply with competitive bidding rules. While we acknowledge the receipt and review of the intent to deny or comad response, the FRNs are being denied since we could not determine a fair and open competitive bidding process for the following reasons below. 3) In addition, during the review it was noted that the evaluation criteria listed in the RFP to be used by the applicant during the evaluation process did not include price as the primary factor. The RFP identified five factors that were used to evaluate the proposal (1. Backbone Dark Fiber Solution; 2. Number of Proposed Member Site Connections; 3. Timeframe for Delivery of Member Site Connections; 4. Pricing; and 5. Minority and Women Business Enterprises). According to the RFP, the factors were listed in descending order, the most important fact was listed first, and the factors were not weighted. FCC rules require the cost of eligible products and services be the primary factor during the bid evaluation process. See 47 C.F.R. § 54.511. The applicant indicated that if multiple bids were received, factors 1, 2 and 3 could have been evaluated on a pass-fail basis employing a multi-tiered approach. However, the RFP does not indicate that MOREnet would be conducting a multi-tiered evaluation process.4) Furthermore, documentation revealed that Sho-Me agreed to contribute no more than $2M toward the replacement of optical equipment no sooner than 10 years from the contract execution date and monies paid by MOREnet under the backbone IRU contract to Sho-Me would be paid back by Sho-Me to MOREnet, which would result in a $0 transaction. Applicants and service providers are prohibited from using Schools and Libraries (E-rate) Program funds to subsidize the procurement of ineligible or unrequested products and services or from participating in arrangements that directly or indirectly reduce the applicant's nondiscount share. Program rules do not restrict applicants from accepting grants from bona fide organizations, nor do they restrict service providers from attempting to help applicants obtain grants from such organizations, so long as the grants and organizations are completely independent of the service provider. FCC rules impose significant restrictions on applicants and consultants regarding the direct or indirect solicitation or acceptance of gifts from service providers or prospective service providers. Gifts are defined as gratuities, favors, entertainment, loans, or any other thing else of value. The purpose of these restrictions is to ensure a fair and open competitive bidding process that is free from any conflicts of interest. Any offering, acceptance, or request of gifts between involved parties is considered a competitive bidding violation. See 47 C.F.R. §§ 54.503(d), 54.523.||MR1:This is a new FRN. It was created in order to change the Fiber Type and Subtype from Dark Fiber IRU (No Special Construction) as listed on FRN 1999044592 to Maintenance and Operations based on the supporting documentation.