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SLD Provides Additional Guidance on Proper Role for Vendors

Ellen Wolfhagen, director of service provider support for the Schools and Libraries Division, has distributed a series of answers to questions the SLD has received concerning the proper role of vendors during the E-rate program's competitive bidding process.


The issue arose after the SLD and the Federal Communications Commission rejected funding requests from more than 100 schools in Oklahoma that were based on Form 470 applications for which a vendor representative served as contact person or actually signed. The agencies asserted that the bidding process could not have been fair or competitive when a representative of a particular vendor was in charge of communications with other companies. Among the items addressed in the June 28 memo were:

  • Vendor site visits to schools before a Form 470 is posted to help the applicant determine what networking technology is required. Wolfhagen said there was no "outright prohibition" against vendors making site visits. Whether they were "appropriate," she said, would first be answered by state and local procurement laws. Aside from procurement rules, she said the answer would depend in large part on whether the opportunity was extended to all vendors seeking to respond to the Form 470 application or Request for Proposal. If the opportunity were not extended to all vendors, or if the applicant felt pressured to allow a particular vendor on site, "then questions could arise regarding the fairness and openness of the competitive process." 
  • How long a Form 470 application could be used as the basis for bids. Wolfhagen wrote that it "is an element of a fair and open competitive process to give bidders a sense of when they have to reply and for how long the bidding period will remain open." That, she said, is why most state and local procurement laws usually require a definite time period in which to respond to an RFP. If an applicant is going to accept bids indefinitely, and technology and pricing changes occur during that time, then how, she asked, does the vendor who submitted an early bid get to update its bid to reflect changes? How, she added, does the applicant guarantee that there is level playing field for all bidders? Wolfhagen drew a distinction between this position and the concept of an "evergreen" Form 470, in which a single Form 470 can cover all the years of a multi-year contract, once it is bid and signed.
  • How the SLD will determine that a quote is not, in fact, a response to a Form 470 posting. Wolfhagen said she believed an end date of a bidding period was a necessary element to a fair and open bidding competition. She said "it seems unreasonable that there was a valid, fair and open competition, if the applicant was still receiving bids a year after the initial posting." Wolfhagen declined to provide a "hard and fast 'test' " that applicants and vendors could use to demonstrate that a quote was in response to a specific Form 470 posting. She suggested that a Form 470 (or any RFP) should be sufficiently clear in describing the services requested, the time frame and the bidding period, so that a bid could be tailored to the proposal and "a reasonable person could make the determination that a bidder's proposal is in response to that request."
  • The recommendation by a vendor of specific brand name equipment. Wolfhagen said that while the SLD does not endorse this practice, in certain instances "it may be appropriate to recommend specific equipment by brand name." She cautioned applicants and service providers that there is a "significant risk that technology could change between the time the RFP is prepared and the time that service is delivered, making the brand name equipment less than ideal for the job." With a more general RFP, she said, "there is more flexibility built in to accommodate changes in technology." She also said that suggesting brand names may prevent the applicant from seeking "the most cost-effective solution, which is a key requirement for the E-rate program."
  • What the SLD considers "working so closely with applicants" that would provide undue influence. Wolfhagen said that was ultimately that was a judgment call based on numerous factors and declined to be more specific. However, she did point to instances when an applicant indicated that it "had FELT influenced (or sometimes even coerced by the service provider's actions." She added that documentation submitted to the SLD "will occasionally demonstrate that a vendor unduly influenced the competitive process." She said the division's Program Integrity Assurance team was trained to review and investigate such instances.
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