How Do I Run a Good Competitive Bidding Process?

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<ul><li> 1. How Do I Run a Good Competitive Bidding Process? Back to the New Basics Schools and Libraries Division Washington, DC Orlando Boston New Orleans Cleveland San Francisco Phoenix September/October 2007 </li> <li> 2. Overview <ul><li>Why are we talking about this again? </li></ul><ul><li>Rules of the Road </li></ul><ul><li>What we see </li></ul></li> <li> 3. Are there problems? <ul><li>Yes! </li></ul><ul><li>Highly public instances of waste, fraud and abuse reported in the media, US DOJ </li></ul><ul><li>More instances of competitive bidding violations, which may not be intentional, but still result in funding reductions/denials. </li></ul></li> <li> 4. % FRNs Denied Due to Competitive Bidding Funding Year 2006 </li> <li> 5. Competitive Bidding Violations Breakdown Funding Year 2006 </li> <li> 6. Bidding Violations <ul><li>Price was not primary factor in selecting service provider </li></ul><ul><li>Service Provider involved with preparing 470 </li></ul><ul><li>Service Provider involved with competitive bidding process </li></ul><ul><li>Applicants consultant associated with Service Provider </li></ul><ul><li>Contract signed before RFP due date </li></ul><ul><li>Failure to provide competitive bidding support documentation (e.g. bids, vendor bid score sheet, RFP) </li></ul><ul><li>Consulting services provided before Letter of Agency </li></ul><ul><li>Failure to advise bidders that RFP was available </li></ul></li> <li> 7. Know Your Role <ul><li>Applicants </li></ul><ul><li><ul><li>Write tech plan, file Form 470 and write RFP, evaluate bids, select provider, document the process, file Form 471, select invoice method </li></ul></li></ul><ul><li>Service Providers </li></ul><ul><li><ul><li>Respond to 470/RFPs, assist with preparing Item 21, provide answers on specific goods and services requested, but NOT on competitive bidding </li></ul></li></ul><ul><li>Consultants </li></ul><ul><li><ul><li>Make sure that you have a Letter of Agency </li></ul></li></ul></li> <li> 8. Technology Plan <ul><li>Creation date </li></ul><ul><li><ul><li>Month and year that the plan is written </li></ul></li></ul><ul><li>Sufficient detail to support and validate the services requested </li></ul><ul><li>Five elements </li></ul><ul><li><ul><li>Goals/strategy for using technology </li></ul></li></ul><ul><li><ul><li>Professional development strategy </li></ul></li></ul><ul><li><ul><li>Needs assessment </li></ul></li></ul><ul><li><ul><li>Sufficient budget </li></ul></li></ul><ul><li><ul><li>Evaluation process </li></ul></li></ul></li> <li> 9. Selective Review <ul><li>Further review of </li></ul><ul><li><ul><li>Budget </li></ul></li></ul><ul><li><ul><li>Necessary Resources </li></ul></li></ul><ul><li><ul><li>Competitive Bidding and Contracts </li></ul></li></ul><ul><li><ul><li>Technology Plan </li></ul></li></ul><ul><li>Sample Selective Review Information Request (SRIR) available on SLD website </li></ul><ul><li>Retain your documentation! </li></ul></li> <li> 10. Budget <ul><li>Purpose is for you to show us you can fund your share </li></ul><ul><li>Operating budget (or draft) has dates that cover the funding year (July June) </li></ul><ul><li>Budget documentation should clearly identify applicants share (e.g., expense line item) </li></ul><ul><li>Can provide letter for reasonable expectation </li></ul></li> <li> 11. Budget <ul><li>More about reasonable expectation </li></ul><ul><li><ul><li>You dont have the money in your hands now but expect to have it after July 1 </li></ul></li></ul><ul><li><ul><li>We understand that your budget cycle may not coincide with our review cycle </li></ul></li></ul><ul><li><ul><li>Will have to show the money during Form 486 review for the entire BEN for the year </li></ul></li></ul><ul><li><ul><li>If a shortfall, we will work with you to cancel FRNs </li></ul></li></ul></li> <li> 12. Payment Plans <ul><li>Applicants are required to pay their share at the same time that USAC pays the discount amount. </li></ul><ul><li><ul><li>Service Provider certifies that the invoices they submit are for services that have been billed to service providers customers. </li></ul></li></ul><ul><li><ul><li>Therefore, deferred payment plans that allow the applicant to pay after USAC has paid will jeopardize a funding request. </li></ul></li></ul><ul><li><ul><li>FCC Rules include a presumption that the non-discount share will be paid within 90 days. </li></ul></li></ul></li> <li> 13. Necessary Resources <ul><li>Do you have the other necessary resources? </li></ul><ul><li><ul><li>Are there end user computers? </li></ul></li></ul><ul><li><ul><li><ul><li>Must have reasonable plans to fully utilize all internal connections for which you are requesting discounts (e.g., 2-year plan to get computers for all network drops) </li></ul></li></ul></li></ul><ul><li><ul><li>Do you have software to run on the computers? </li></ul></li></ul><ul><li><ul><li>Staff trained on how to use the technology? </li></ul></li></ul><ul><li><ul><li>Electrical capacity? </li></ul></li></ul><ul><li><ul><li>Can you maintain your eligible and ineligible equipment? </li></ul></li></ul></li> <li> 14. Form 470/RFP <ul><li>Form 470 indicates types of products and services ordered on the Form 471 </li></ul><ul><li>Form 470/RFP is based on tech plan </li></ul><ul><li>Form 470 and RFP must be available for 28 days </li></ul><ul><li>Define and document your evaluation process </li></ul><ul><li>Indicates who will be receiving the services </li></ul></li> <li> 15. Form 470/RFP <ul><li>Be able to explain what you were asking for (avoid generic descriptions or statements that are overly broad) </li></ul><ul><li>Post for what you want (multi-year contract, type of service, voluntary contract extensions) </li></ul><ul><li>Indicate on your Form 470 if you are issuing an RFP </li></ul></li> <li> 16. Form 470/RFP <ul><li>Applicants must be prepared to explain if and how they disqualified bids. </li></ul><ul><li>Applicants must inform all bidders of any requirements that could lead to disqualification. </li></ul></li> <li> 17. Competitive Bidding <ul><li>Fair and open competitive bidding process </li></ul><ul><li>Avoid conflicts of interest </li></ul><ul><li><ul><li>Independent consultant Service Provider </li></ul></li></ul><ul><li><ul><li>Applicant Service Provider </li></ul></li></ul><ul><li>Open competition and bid evaluation </li></ul><ul><li>Follow the rules FCC and state/local </li></ul><ul><li>Read the contract fine print </li></ul><ul><li>Document the process! </li></ul></li> <li> 18. Competitive Bidding <ul><li>Selecting the winning bidder </li></ul><ul><li><ul><li>Price must be the primary factor, considering only ELIGIBLE goods and services. </li></ul></li></ul><ul><li><ul><li>Solution must be cost-effective (not just the most cost-effective) </li></ul></li></ul><ul><li><ul><li><ul><li>Ysleta Order, para. 54: Routers priced at twice the market price would not be cost effective </li></ul></li></ul></li></ul><ul><li>May not use E-rate to subsidize the procurement of ineligible or unrequested products or services because that constitutes a rebate of the non-discount portion of the costs, which is a violation of FCC rules. </li></ul></li> <li> 19. Vendor Selection <ul><li>Keep documentation of your selection process </li></ul><ul><li>Create your selection matrix and follow it </li></ul><ul><li>If using a multi-round selection process, price of the eligible goods and services must be the primary factor in every round. </li></ul><ul><li>USAC template available! </li></ul></li> <li> 20. Keep dates in order <ul><li>Remember the correct order for dates: </li></ul><ul><li><ul><li>Allowable Contract Date (28 days after 470) </li></ul></li></ul><ul><li><ul><li><ul><li><ul><li><ul><li>THEN </li></ul></li></ul></li></ul></li></ul></li></ul><ul><li><ul><li>Contract Award Date </li></ul></li></ul><ul><li><ul><li><ul><li><ul><li><ul><li>THEN </li></ul></li></ul></li></ul></li></ul></li></ul><ul><li><ul><li>Form 471 filing </li></ul></li></ul><ul><li><ul><li><ul><li><ul><li><ul><li>THEN </li></ul></li></ul></li></ul></li></ul></li></ul><ul><li><ul><li>Form 471 Certification date </li></ul></li></ul><ul><li><ul><li><ul><li><ul><li>ALL BEFORE </li></ul></li></ul></li></ul></li></ul><ul><li><ul><li>Window close </li></ul></li></ul></li> <li> 21. State Master Contracts <ul><li>Applicant files Form 470 </li></ul><ul><li><ul><li>Can use State Master Contract as a bid response </li></ul></li></ul><ul><li><ul><li>Contract Award date is date the applicant selected the State Master Contract as its winning bid </li></ul></li></ul><ul><li>State files Form 470 </li></ul><ul><li><ul><li>Applicants may cite that Form 470 </li></ul></li></ul></li> <li> 22. State Master Contracts <ul><li>Single winner </li></ul><ul><li><ul><li>Applicants do not need to justify the selection of the winning bidder </li></ul></li></ul><ul><li>Multiple winners </li></ul><ul><li><ul><li>Applicants must be able to document why they selected the specific provider off the master contract </li></ul></li></ul></li> <li> 23. State Master Contracts <ul><li>Multiple Award Schedules </li></ul><ul><li><ul><li>Applicants must be able to document why they selected the specific provider off the multiple award schedule. </li></ul></li></ul><ul><li>Only Terms and Conditions, not prices </li></ul><ul><li><ul><li>These contracts do not meet FCC contract requirements. </li></ul></li></ul></li> <li> 24. Pattern Analysis <ul><li>USAC reviews a group of applications, usually looking at competitive bidding information. </li></ul><ul><li>Are there any elements that are the same across applications? </li></ul><ul><li>Applicants are given an opportunity to explain the similarities. </li></ul></li> <li> 25. A tale of three districts Identical description of services sought and quantities Identical description of services sought and quantities Identical description of services sought and quantities Identical RFP format, table of contents but font changed Identical RFP format, font, table of contents Identical RFP format, font, table of contents District C District B District A </li> <li> 26. A tale of three districts Same typos and grammatical errors Same typos and grammatical errors Same typos and grammatical errors Description of how they selected the vendor identical Description of how they selected the vendor identical Description of how they selected the vendor identical District C District B District A </li> <li> 27. A tale of three districts I dont know why others are similar. We often share with other districts. Cancel my application My service provider listened to my needs and then wrote the RFP and the SR responses Forgot to change school name to own District C District B District A </li> <li> 28. Documentation <ul><li>Retain documents to show your compliance: </li></ul><ul><li><ul><li>Letters of Agency and any agreements with all consultants </li></ul></li></ul><ul><li><ul><li>Technology Plan and CTPA Plan Approval letter </li></ul></li></ul><ul><li><ul><li>RFP, including evidence of publication date and any solicitation you did </li></ul></li></ul><ul><li><ul><li>Any and all bids (winning and losing) </li></ul></li></ul><ul><li><ul><li>Email to yourself if you get no or one bid </li></ul></li></ul></li> <li> 29. Documentation <ul><li>Retain documents to show your compliance: </li></ul><ul><li><ul><li>Documents describing bid evaluation criteria and weighting </li></ul></li></ul><ul><li><ul><li>Any correspondence with potential bidders </li></ul></li></ul><ul><li><ul><li>Documents related to the selection of the service provider(s) </li></ul></li></ul><ul><li><ul><li>Signed and dated copies of contracts </li></ul></li></ul><ul><li><ul><li>Also, see further list on USAC website </li></ul></li></ul></li> <li> 30. Lack of Documentation <ul><li>Leads to difficulties answering PIA </li></ul><ul><li>Delays your FCDL </li></ul><ul><li>Reduces/denies funding </li></ul><ul><li>Leads to further questions from Site Visitors and Auditors </li></ul><ul><li>Could result in you having to return cash to USAC </li></ul></li> <li> 31. Questions? </li> </ul>


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