§ 54.642   Competitive bidding requirement and exemptions.

   (a) Competitive bidding requirement. All applicants are required to engage
   in a competitive bidding process for supported services, facilities, or
   equipment consistent with the requirements set forth in this subpart, unless
   they qualify for one or more of the exemptions in paragraph (h) of this
   section. In addition, applicants may engage in competitive bidding even if
   they qualify for an exemption. Applicants who utilize a competitive bidding
   exemption may proceed directly to filing a funding request as described in
   § 54.643.

   (b) Fair and open process. (1) All entities participating in the Healthcare
   Connect Fund must conduct a fair and open competitive bidding process,
   consistent with all applicable requirements.

   (2) Vendors who intend to bid to provide supported services, equipment, or
   facilities to a health care provider may not simultaneously help the health
   care provider choose a winning bid. Any vendor who submits a bid, and any
   individual or entity that has a financial interest in such a vendor, is
   prohibited from:

   (i) Preparing, signing or submitting an applicant's request for services;

   (ii) Serving as the Consortium Leader or other point of contact on behalf of
   applicant(s);

   (iii) Being involved in setting bid evaluation criteria; or

   (iv) Participating in the bid evaluation or vendor selection process (except
   in their role as potential vendors).

   (3) All potential bidders must have access to the same information and must
   be treated in the same manner.

   (4)  All applicants and vendors must comply with any applicable state,
   Tribal, or local competitive bidding requirements. The competitive bidding
   requirements in this section apply in addition to state, Tribal, and local
   competitive bidding requirements and are not intended to preempt such state,
   Tribal, or local requirements.

   (c)  Cost-effective.  For  purposes  of  the  Healthcare Connect Fund,
   “cost-effective”  is  defined as the method that costs the least after
   consideration of the features, quality of transmission, reliability, and
   other factors that the health care provider deems relevant to choosing a
   method of providing the required health care services.

   (d) Bid evaluation criteria. Applicants must develop weighted evaluation
   criteria (e.g., scoring matrix) that demonstrate how the applicant will
   choose  the  most “cost-effective” bid before submitting a Request for
   Services. Price must be a primary factor, but need not be the only primary
   factor. A non-price factor can receive an equal weight to price, but may not
   receive a greater weight than price.

   (e) Request for services. Applicants must submit the following documents to
   the Administrator in order to initiate competitive bidding.

   (1) Form 461, including certifications. The applicant must provide the
   following certifications as part of the request for services.

   (i)  The  person  signing  the application is authorized to submit the
   application on behalf of the applicant and has examined the form and all
   attachments, and to the best of his or her knowledge, information, and
   belief, all statements of fact contained therein are true.

   (ii) The applicant has followed any applicable state, Tribal, or local
   procurement rules.

   (iii) All Healthcare Connect Fund support will be used solely for purposes
   reasonably related to the provision of health care service or instruction
   that the HCP is legally authorized to provide under the law of the state in
   which the services are provided and will not be sold, resold, or transferred
   in consideration for money or any other thing of value.

   (iv) The applicant satisfies all of the requirements under section 254 of
   the Act and applicable Commission rules.

   (v) The applicant has reviewed all applicable requirements for the program
   and will comply with those requirements.

   (2) Bid evaluation criteria. Requirements for bid evaluation criteria are
   described in paragraph (d) of this section.

   (3) Declaration of assistance. All applicants must submit a “Declaration of
   Assistance”  with  their  Request  for Services. In the Declaration of
   Assistance, applicants must identify each and every consultant, vendor, and
   other outside expert, whether paid or unpaid, who aided in the preparation
   of their applications.

   (4)  Request for proposal (if applicable). (i) Any applicant may use a
   request for proposals (RFP). Applicants who use an RFP must submit the RFP
   and any additional relevant bidding information to the Administrator with
   Form 461.

   (ii) An applicant must submit an RFP:

   (A) If it is required to issue an RFP under applicable State, Tribal, or
   local procurement rules or regulations;

   (B) If the applicant is a consortium seeking more than $100,000 in program
   support during the funding year, including applications that seek more than
   $100,000 in program support for a multi-year commitment; or

   (C)   If   the   applicant   is   a  consortium  seeking  support  for
   participant-constructed and owned network facilities.

   (iii) RFP requirements. (A) An RFP must provide sufficient information to
   enable an effective competitive bidding process, including describing the
   health care provider's service needs and defining the scope of the project
   and network costs (if applicable).

   (B) An RFP must specify the period during which bids will be accepted.

   (C) An RFP must include the bid evaluation criteria described in paragraph
   (d) of this section, and solicit sufficient information so that the criteria
   can be applied effectively.

   (D) Consortium applicants seeking support for long-term capital investments
   whose useful life extends beyond the period of the funding commitment (e.g.,
   facilities constructed and owned by the applicant, fiber indefeasible rights
   of use) must seek bids in the same RFP from vendors who propose to meet
   those needs via services provided over vendor-owned facilities, for a time
   period comparable to the life of the proposed capital investment.

   (E) Applicants may prepare RFPs in any manner that complies with the rules
   in this subpart and any applicable state, Tribal, or local procurement rules
   or regulations.

   (5) Additional requirements for consortium applicants. (i) Network plan.
   Consortium applicants must submit a narrative describing specific elements
   of their network plan with their Request for Services. Consortia applicants
   are required to use program support for the purposes described in their
   narrative. The required elements of the narrative include:

   (A) Goals and objectives of the network;

   (B) Strategy for aggregating the specific needs of health care providers
   (including providers that serve rural areas) within a state or region;

   (C) Strategy for leveraging existing technology to adopt the most efficient
   and cost effective means of connecting those providers;

   (D) How the supported network will be used to improve or provide health care
   delivery;

   (E) Any previous experience in developing and managing health information
   technology (including telemedicine) programs; and

   (F)  A  project management plan outlining the project's leadership and
   management structure, and a work plan, schedule, and budget.

   (ii) Letters of agency. Consortium applicants must submit letters of agency
   pursuant to § 54.632.

   (f) Public posting by the Administrator. The Administrator shall post on its
   web site the following competitive bidding documents, as applicable:

   (1) Form 461,

   (2) Bid evaluation criteria,

   (3) Request for proposal, and

   (4) Network plan.

   (g)  28-day  waiting  period. After posting the documents described in
   paragraph (f) of this section on its Web site, the Administrator shall send
   confirmation of the posting to the applicant. The applicant shall wait at
   least 28 days from the date on which its competitive bidding documents are
   posted on the Web site before selecting and committing to a vendor.

   (1) Selection of the most “cost-effective” bid and contract negotiation.
   Each applicant subject to competitive bidding is required to certify to the
   Administrator that the selected bid is, to the best of the applicant's
   knowledge, the most cost-effective option available. Applicants are required
   to  submit  the  documentation  listed  in  § 54.643  to  support their
   certifications.

   (2) Applicants who plan to request evergreen status under § 54.642(h)(4)(ii)
   must enter into a contract that identifies both parties, is signed and dated
   by the health care provider or Consortium Leader after the 28-day waiting
   period expires, and specifies the type, term, and cost of service.

   (h) Exemptions to competitive bidding requirements. (1) Annual undiscounted
   cost of $10,000 or less. An applicant that seeks support for $10,000 or less
   of total undiscounted eligible expenses for a single year is exempt from the
   competitive bidding requirements under this section, if the term of the
   contract is one year or less.

   (2)  Government  Master  Service Agreement (MSA). Eligible health care
   providers that seek support for services and equipment purchased from MSAs
   negotiated by federal, state, Tribal, or local government entities on behalf
   of such health care providers and others, if such MSAs were awarded pursuant
   to  applicable  federal,  state,  Tribal, or local competitive bidding
   requirements, are exempt from the competitive bidding requirements under
   this section.

   (3) Master Service Agreements approved under the Pilot Program or Healthcare
   Connect Fund. A eligible health care provider site may opt into an existing
   MSA approved under the Pilot Program or Healthcare Connect Fund and seek
   support for services and equipment purchased from the MSA without triggering
   the competitive bidding requirements under this section, if the MSA was
   developed and negotiated in response to an RFP that specifically solicited
   proposals that included a mechanism for adding additional sites to the MSA.

   (4) Evergreen contracts. (i) Subject to the provisions in § 54.644, the
   Administrator may designate a multi-year contract as “evergreen,” which
   means that the service(s) covered by the contract need not be re-bid during
   the contract term.

   (ii) A contract entered into by a health care provider or consortium as a
   result of competitive bidding may be designated as evergreen if it meets all
   of the following requirements:

   (A) Is signed by the individual health care provider or consortium lead
   entity;

   (B) Specifies the service type, bandwidth and quantity;

   (C) Specifies the term of the contract;

   (D) Specifies the cost of services to be provided; and

   (E) Includes the physical location or other identifying information of the
   health care provider sites purchasing from the contract.

   (iii) Participants may exercise voluntary options to extend an evergreen
   contract without undergoing additional competitive bidding, if:

   (A) The voluntary extension(s) is memorialized in the evergreen contract;

   (B) The decision to extend the contract occurs before the participant files
   its funding request for the funding year when the contract would otherwise
   expire; and

   (C) The voluntary extension(s) do not exceed five years in the aggregate.

   (5)  Schools  and  libraries  program master contracts. Subject to the
   provisions in § § 54.500, 54.501(c)(1), and 54.503, an eligible health care
   provider in a consortium with participants in the schools and libraries
   universal service support program and a party to the consortium's existing
   contract is exempt from the Healthcare Connect Fund competitive bidding
   requirements if the contract was approved in the schools and libraries
   universal service support program as a master contract. The health care
   provider must comply with all Healthcare Connect Fund rules and procedures
   except for those applicable to competitive bidding.

   [ 78 FR 13988 , Mar. 1, 2013, as amended at  79 FR 49203 , Aug. 19, 2014]

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