Gifts

1. Gifts E-rate Gift Rules

2. E-rate Gift Rules • Charitable Donations • Conferences and Training Sessions • Representation on Boards • Timing • Questions • Agenda • Overview

3. FCC Rules- 47 C.F.R. § 54.503(d) • Federal Gift Rules- 5 C.F.R. § 2635.201-205 • FCC Sixth Report and Order - 25 FCC Rcd 18762 (2010) • FCC Clarification Order- 25 FCC Rcd 17324 (2010)

4. (d)(1): General Rule “…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…” Disclaimer: The most restrictive of FCC, local & state rules applies in terms of E-rate! • FCC Gift Rules – 47 C.F.R. § 54.503(d) • E-rate Gift Rules

5. N.C.G.S. 133-32 http://www.ncga.state.nc.us/gascripts/statutes/statutelookup.pl?statute=133-32

6. Solicitation or receipt of gifts by applicants from service providers and potential service providers and vice versa is a competitive bidding violation. • Rules apply to everyone participating in the E-rate whether public or private, and whether operating at the local, state or federal level. • Must always follow FCC rules. May also need to comply with additional state/local requirements. If those provisions are more stringent than federal requirements, failure to comply with them will be a violation of FCC rules. • Gift Rules • E-rate Gift Rules

7. Gift prohibitions are applicable year-round, not just during the competitive bidding process • Gift Prohibitions • E-rate Gift Rules

8. Food, refreshments, instruction and documents given to all attendees at Widely Attended Gatherings are permissible. • Trainings offered by state, regional or local government bodies or non-profits or trade associations that include those bodies are not considered vendor promotional training • Vendor promotional training means training provided by any person for the purpose of promoting its products or services. See 5 C.F.R. § 2635.203(g) • Conferences – Permissible Actions • Conferences and Training Sessions

9. Service providers can host, sponsor, or conduct E-rate training, as long as they do not provide any gift that exceeds the gift exceptions • Service providers cannot provide demonstrations of, or help with preparation or completion of forms, or determining the services listed on the FCC Form 470 and/or RFP. • Conferences – Permissible Actions • Conferences and Training Sessions

10. Training or conference regarding one or few vendors services would not meet the definition of a Widely Attended Event even if many people attended. • Travel expenses, lodging, meals, and entertainment associated with the event would be considered gifts and therefore violations. • Free attendance when it would otherwise cost to attend is also a violation. • Meals at a Widely Attended Gatherings not provided to all attendees would be subject to gift limits • Conferences – Impermissible Actions • Conferences and Training Sessions

11. Requirement for fair and open competitive bidding has always been in effect. • Rules from 6th Report and Order went into effect January 3, 2011. • New applicants, or applicants that are applying for the first time for a category of service, must be in compliance with rules six months prior to the posting of their first FCC Form 470. • Dollar limits of $20/$50 are calculated per funding year • Timelines for Compliance • Timing

12. Questions?

13. Competitive Bidding E-rate Guidance

14. Issues in Competitive Bidding

15. Overview • 28 Day Rule • Communicating with Bidders • Multi-tiered vendor selection • Sham Bidding • Piggyback Clauses

16. Competitive Bidding • Fair and open competitive bidding process • Avoid conflicts of interest • Independent consultant Service Provider • Applicant  Service Provider • Open competition and bid evaluation • Follow all rules – FCC and state/local • Read the contract fine print • Retain your documentation • Retain, retain, lessen your pain…

17. N.C.G.S. 143-129 http://www.ncga.state.nc.us/gascripts/statutes/statutelookup.pl?statute=143-129 N.C.G.S. 143-131 http://www.ncga.state.nc.us/gascripts/statutes/statutelookup.pl?statute=143-131

18. Contracting method Formal Formal Qualifications-based selection No method required $500,000 Informal $90,000 Informal $30,000 No method required No method required $0 Purchase* Construction Everything else* DesignServices * Optional: May use a request for proposal for service contracts or information technology purchases or services.

20. 28 Day Rule • WAIT 28 DAYS after your Form 470 is posted and your RFP is issued before: • Evaluating the bids • Selecting your service provider • THEN sign a contract/legally binding agreement • THEN file and certify your Form 471 online

21. 28 Days • RFP handed out at walk through • 28 day clock starts after last of the RFP issued • Clock for 28 days restarts when • If you issue a new RFP, then your 28 days starts again (do not have to post a new 470) • Changed services sought • Make other cardinal changes to RFP • Post new Form 470 • No bids received after 28 days, you may contact vendors to seek bids

22. Bidder communication • Equal communication with all • Ensure that everyone knows the same thing • Timely communication • Provide adequate notice to potential bidders about deadlines, walk-throughs, changes, etc • Late breaking news • Provide adequate notice to all potential bidders

23. Multi-tier Bidding Eval • Disqualification/Qualification Round • Factors are binary (meet/does not meet) • Factors cannot be scored on range (subjective) • Examples: • Responded in full to RFP • Licensed, Bonded and Insured • In-state • Has a USAC Service Provider Identification Number (SPIN)

24. Multi-tier Bidding Eval • Qualification Factors • Can require that potential bidders meet minimum number of qualification factors • Disqualification Factors • Can require that potential bidders that meet any disqualification factors are not considered • Ensure that all potential bidders have adequate notice of these items

25. Multi-tier Bidding Eval • Bid Evaluation Round(s) • Price of the eligible goods and services mustbe primary factor in each round • Then can include range of other factors (can be subjective or not) • Examples: • Technical solution proposed • Reputation/Prior History with the entity • Other costs of doing business with this provider • etc

26. Complex Example • School district sets disqualification factors • 10 bidders submit proposals; 7 do not have any disqualification factors and continue • First round • Price 60 pts, Refs 20 pts, History with District 20 pts • District accepts all that get at least 50 points • 4 of the 7 have at least 50 points and continue • Second round • Price 55 pts, Technical Solution 45 pts • Winning Bidder is selected

27. Sham Bidding • “I want to stay with my incumbent” • Must respond to all legitimate inquiries • Bidders can’t just send spam, but you have to talk to bidders, too • Providers that are being stonewalled can contact USAC • Cost to transfer to another provider alone is not by itself a good enough reason to stay with incumbent

28. Sham Bidding • Avoid appearances of a “done deal” • Don’t post for something you don’t want • If plans change, have a plan to communicate with potential bidders • Post notice on your website • Use communication paths already established for RFP, if one was used • Keep your documentation

29. Piggyback Clauses • Clause in a contract signed between provider and another entity allowing others to purchase off the same contract • Must be permissible under state & local regs • The contract or RFP must allow for other entities to be added • You must still post your own Form 470, AND conduct your own competitive bid evaluation • Follow all other FCC rules

30. Gifts • Meals, travel, entertainment etc offered by service provider to an applicant • Gifts offered and/or received • Know and follow your state and local rules regarding acceptance of gifts (limits, timeframes, etc) • Know and follow your school/library gift policies

31. What you can do: Gifts • Know the applicable regulations • Make sure that you have a policy that tells your staff how to handle gifts, meals, travel, entertainment, etc offered by providers and potential bidders • Train your staff: ignorance is not bliss • Follow the rules • Is the gift really worth it?

32. Competitive bidding • After you close the competitive bidding process for your services (on or after the ACD): • You can evaluate the bids received • You can choose your service provider(s) • You can sign a contract • You can post a Form 471

33. Competitive bidding

34. Bid Evaluation Matrix (sample) • Competitive Bidding

35. CONNECTIVITY SERVICES Alleghany Mt. Airy Northampton Gates Camden Currituck Ashe Stokes Rockingham Surry Person Caswell Warren Roanoke Rapids Weldon Vance Hertford Elkin Perquimans Wilkes Watauga Elizabeth City/Pasquotank Orange Granville Yadkin Halifax Forsyth Edenton-Chowan Bertie Mitchell Avery Guilford Franklin Alamance Durham Nash Caldwell Alexander Davie Chapel Hill Carrboro Thomasville Yancey Edgecombe Madison Iredell Martin Davidson Wake Randolph Tyrrell Washington Dare Burke Hickory Chatham Wilson Catawba McDowell Asheville Beaufort Mooresville Lexington Newton- Conover Pitt Rowan Asheboro Haywood Johnston Buncombe Swain Lincoln Hyde Greene Lee Kannapolis Rutherford Harnett Cabarrus Henderson Wayne Graham Jackson Stanly Moore Polk Gaston Cleveland Montgomery Lenoir Mecklenburg Craven Transylvania Macon Cherokee Pamlico Clay Cumberland Richmond Hoke Jones Union Anson Sampson Duplin Scotland Carteret Onslow Clinton Robeson Bladen Barry Pace bpace@dpi.state.nc.us (828) 756-0525 Pender Whiteville New Hanover Columbus Brunswick Jeannene Hurley jhurley@dpi.state.nc.us (252) 624-9878 www.ncpublicschools.org/erate