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SLD Rejects Another $129 Million in Commitments in Latest Wave

The Schools and Libraries Division rejected another $129 million worth of E-rate funding commitments for the 2002 funding year in the wave it distributed this week, according to a Funds For Learning analysis of SLD data. Those rejections come on the heels of $590 million worth of commitments that were rejected two weeks ago.

Among the applicants whose funding requests were denied were the Syracuse City School District ($33 million worth of rejected commitments with $5 million worth of approvals), the Albuquerque School District ( $34.8 million worth of rejected commitments) the Memphis City School District ($25.8 million), the Gallup-McKinley County (NM) School District ($14.8 million), and the Palm Springs (CA) Unified School District ($10.4 million).

Vendors who were notified of more than $1 million worth of in rejections were IBM ($97.1 million), Spectrum Communications ($9.4 million), Matrix Communications Group ($6.6 million), XO Tennessee ($4.2 million), BellSouth Telecommunications ($3 million), Office Management Systems (Logista) ($1.55 million) and Ames Business & Learning Environments ($1.2 million).

Among the reasons cited for some of the rejections were "Applicant did not identify the specific services sought–either clearly on the 470 or in the RFP–to encourage full competition on major new initiatives"; "services for which funding sought not defined when vendor selected; price of services not a factor in vendor selection; price of services set after vendor selection"; "documentation provided demonstrates that price was not the primary factor in selecting this service provider's proposal"; "applicant failed to provide information to potential bidders".

In the case of Office Management Systems and some of the BellSouth rejections, the reason cited was "Associated Form 470 contains service provider (SP) contact information. Competitive bidding violation occurs when SP associated with Form 470 participates in competitive bidding process as a bidder." The SLD has previously noted that vendors rejected on that basis may not have been the service provider that actually was involved with the Form 470 application. In an appeals decision, the Federal Communications Commission has taken the position that when a vendor has been found to have managed a Form 470 application, that all the resulting funding requests that cited that Form 470 application must be rejected, whether or not the vendor in question could have provided the services.

In the case of Spectrum and Matrix Communications, the reason cited was that the request had been canceled "in consultation with the applicant." An official with Spectrum said the district had contacted the SLD to cancel the FRN when it decided it could not go forward with its plans because of cutbacks in its budget and changes in its technology staff.

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