§ 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:

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

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

   (iii)  To  the  extent  an  applicant  seeks the following services or
   arrangements, an indication of the applicant's intent to seek:

   (A) Construction of network facilities that the applicant will own;

   (B) A dark-fiber lease, indefeasible right of use, or other dark-fiber
   service agreement or the modulating electronics necessary to light dark
   fiber; or

   (C) A multi-year installment payment agreement with the service provider for
   the non-discounted share of special construction costs;

   (iv) To the extent an applicant seeks construction of a network that the
   applicant  will own, the applicant must also solicit bids for both the
   services  provided  over  third-party  networks  and  construction  of
   applicant-owned network facilities, in the same request for proposals;

   (v)  To  the  extent  an applicant seeks bids for special construction
   associated  with dark fiber or bids to lease and light dark fiber, the
   applicant must also solicit bids to provide the needed services over lit
   fiber; and

   (vi) To the extent an applicant seeks bids for equipment and maintenance
   costs associated with lighting dark fiber, the applicant must include these
   elements in the same FCC Form 470 as the dark fiber.

   (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;  80 FR 5989 , Feb. 4, 2015]

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