§ 54.503   Competitive bidding requirements.

   (a) All entities participating in the schools and libraries universal
   service support program must conduct a fair and open competitive
   bidding process, consistent with all requirements set forth in this
   subpart.

   Note to paragraph (a): The following is an illustrative list of
   activities or behaviors that would not result in a fair and open
   competitive bidding process: the applicant for supported services has a
   relationship with a service provider that would unfairly influence the
   outcome of a competition or would furnish the service provider with
   inside information; someone other than the applicant or an authorized
   representative of the applicant prepares, signs, and submits the FCC
   Form 470 and certification; a service provider representative is listed
   as the FCC Form 470 contact person and allows that service provider to
   participate in the competitive bidding process; the service provider
   prepares the applicant's FCC Form 470 or participates in the bid
   evaluation or vendor selection process in any way; the applicant turns
   over to a service provider the responsibility for ensuring a fair and
   open competitive bidding process; an applicant employee with a role in
   the service provider selection process also has an ownership interest
   in the service provider seeking to participate in the competitive
   bidding process; and the applicant's FCC Form 470 does not describe the
   supported services with sufficient specificity to enable interested
   service providers to submit responsive bids.

   (b) Competitive bid requirements. Except as provided in § 54.511(c), an
   eligible school, library, or consortium that includes an eligible
   school or library shall seek competitive bids, pursuant to the
   requirements established in this subpart, for all services eligible for
   support under § 54.502. These competitive bid requirements apply in
   addition to state and local competitive bid requirements and are not
   intended to preempt such state or local requirements.

   (c) Posting of FCC Form 470. (1) An eligible school, library, or
   consortium that includes an eligible school or library seeking bids for
   eligible services under this subpart shall submit a completed FCC Form
   470 to the Administrator to initiate the competitive bidding process.
   The FCC Form 470 and any request for proposal cited in the FCC Form 470
   shall include, at a minimum, the following information, to the extent
   applicable with respect to the services requested:

   (i) A list of specified services for which the school, library, or
   consortium requests bids; and

   (ii) Sufficient information to enable bidders to reasonably determine
   the needs of the applicant.

   (2) The FCC Form 470 shall be signed by a person authorized to request
   bids for eligible services for the eligible school, library, or
   consortium, including such entities.

   (i) A person authorized to request bids on behalf of the entities
   listed on an FCC Form 470 shall certify under oath that:

   (A) The schools meet the statutory definition of "elementary school" or
   "secondary school" as defined in § 54.500 of these rules, do not
   operate as for-profit businesses, and do not have endowments exceeding
   $50 million.

   (B) The libraries or library consortia eligible for assistance from a
   State library administrative agency under the Library Services and
   Technology Act of 1996 do not operate as for-profit businesses and have
   budgets that are completely separate from any school (including, but
   not limited to, elementary and secondary schools, colleges, and
   universities).

   (C) Support under this support mechanism is conditional upon the
   school(s) and library(ies) securing access to all of the resources,
   including computers, training, software, maintenance, internal
   connections, and electrical connections necessary to use the services
   purchased effectively.

   (ii) A person authorized to both request bids and order services on
   behalf of the entities listed on an FCC Form 470 shall, in addition to
   making the certifications listed in paragraph (c)(2)(i) of this
   section, certify under oath that:

   (A) The services the school, library, or consortium purchases at
   discounts will be used primarily for educational purposes and will not
   be sold, resold, or transferred in consideration for money or any other
   thing of value, except as allowed by § 54.513.

   (B) All bids submitted for eligible products and services will be
   carefully considered, with price being the primary factor, and the bid
   selected will be for the most cost-effective service offering
   consistent with § 54.511.

   (3) The Administrator shall post each FCC Form 470 that it receives
   from an eligible school, library, or consortium that includes an
   eligible school or library on its Web site designated for this purpose.

   (4) After posting on the Administrator's Web site an eligible school,
   library, or consortium FCC Form 470, the Administrator shall send
   confirmation of the posting to the entity requesting service. That
   entity shall then wait at least four weeks from the date on which its
   description of services is posted on the Administrator's Web site
   before making commitments with the selected providers of services. The
   confirmation from the Administrator shall include the date after which
   the requestor may sign a contract with its chosen provider(s).

   (d) Gift restrictions. (1) Subject to paragraphs (d)(3) and (4) of this
   section, an eligible school, library, or consortium that includes an
   eligible school or library may not directly or indirectly solicit or
   accept any gift, gratuity, favor, entertainment, loan, or any other
   thing of value from a service provider participating in or seeking to
   participate in the schools and libraries universal service program. No
   such service provider shall offer or provide any such gift, gratuity,
   favor, entertainment, loan, or other thing of value except as otherwise
   provided herein. Modest refreshments not offered as part of a meal,
   items with little intrinsic value intended solely for presentation, and
   items worth $20 or less, including meals, may be offered or provided,
   and accepted by any individuals or entities subject to this rule, if
   the value of these items received by any individual does not exceed $50
   from any one service provider per funding year. The $50 amount for any
   service provider shall be calculated as the aggregate value of all
   gifts provided during a funding year by the individuals specified in
   paragraph (d)(2)(ii) of this section.

   (2) For purposes of this paragraph:

   (i) The terms "school, library, or consortium" include all individuals
   who are on the governing boards of such entities (such as members of a
   school committee), and all employees, officers, representatives,
   agents, consultants or independent contractors of such entities
   involved on behalf of such school, library, or consortium with the
   Schools and Libraries Program of the Universal Service Fund (E-rate
   Program), including individuals who prepare, approve, sign or submit
   E-rate applications, or other forms related to the E-rate Program, or
   who prepare bids, communicate or work with E-rate service providers,
   E-rate consultants, or with USAC, as well as any staff of such entities
   responsible for monitoring compliance with the E-rate Program; and

   (ii) The term "service provider" includes all individuals who are on
   the governing boards of such an entity (such as members of the board of
   directors), and all employees, officers, representatives, agents, or
   independent contractors of such entities.

   (3) The restrictions set forth in this paragraph shall not be
   applicable to the provision of any gift, gratuity, favor,
   entertainment, loan, or any other thing of value, to the extent given
   to a family member or a friend working for an eligible school, library,
   or consortium that includes an eligible school or library, provided
   that such transactions:

   (i) Are motivated solely by a personal relationship,

   (ii) Are not rooted in any service provider business activities or any
   other business relationship with any such eligible school, library, or
   consortium, and

   (iii) Are provided using only the donor's personal funds that will not
   be reimbursed through any employment or business relationship.

   (4) Any service provider may make charitable donations to an eligible
   school, library, or consortium that includes an eligible school or
   library in the support of its programs as long as such contributions
   are not directly or indirectly related to E-rate procurement activities
   or decisions and are not given by service providers to circumvent
   competitive bidding and other E-rate program rules, including those in
   paragraph (c)(2)(i)(C) of this section, requiring schools and libraries
   to pay their own non-discount share for the services they are
   purchasing.

   (e) Exemption to competitive bidding requirements. An applicant that
   seeks support for commercially available high-speed Internet access
   services for a pre-discount price of $3,600 or less per school or
   library annually is exempt from the competitive bidding requirements in
   paragraphs (a) through (c) of this section.

   (1) Internet access, as defined in § 54.5, is eligible for this
   exemption only if the purchased service offers at least 100 Mbps
   downstream and 10 Mbps upstream.

   (2) The Chief, Wireline Competition Bureau, is delegated authority to
   lower the annual cost of high-speed Internet access services or raise
   the speed threshold of broadband services eligible for this competitive
   bidding exemption, based on a determination of what rates and speeds
   are commercially available prior to the start of the funding year.

   [ 75 FR 75412 , Dec. 3, 2010, as amended at  76 FR 56302 , Sept. 13, 2011;
    79 FR 49199 , Aug. 19, 2014]

   Effective Date Note: At 79 FR , Aug. 19, 2014, § 54.503 was revised.
   However, paragraph (c) contains information collection and
   recordkeeping requirements and will not become effective until approval
   has been given by the Office of Management and Budget.

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