What is Competitive Bidding?
What is competitive bidding in the E-Rate program? Competitive bidding is a formal process to identify and request products and/or services needed by an applicant, so that service providers can submit bids. It is designed to be fair and open and requires the applicant to select the most cost-effective provider based upon a bid evaluation process, with the price of eligible equipment and services given the most weight.
Competitive bidding comes after a Form 470 filing; however, you may not always need to file a Form 470. Please see HWC Consultants Form 470 blog post for more information regarding whether you may need to file one. If you do file a Form 470, you must ensure you follow the E-Rate competitive bidding rules. Any party with a potential financial interest in the E-Rate program is subject to competitive bidding guidelines.
Generally, the entity filing the Form 470 must ensure that all bidders are treated the same. If, for example, you are going to answer questions from one bidder, questions must be answered from all bidders. No bidder can have advance knowledge of project information, and there can be no secrets in the process. All bidders must know what is required from them, so information may not be shared with one bidder but kept from the others (including information shared via phone calls, walk throughs, etc.).
There are a few other competitive bidding guidelines to consider, which we encourage you to read through. For example, there’s a no gift rule, which means that, with limited exceptions, applicants may not receive gifts from service providers or potential service providers. Additionally, the value of all price reductions, promotional offers, and free products and/or services must be deducted from the pre-discount cost of services indicated in funding requests.
It is important to remember that the Form 470 - and therefore the competitive bidding process - must be open for a 28-day period before you can close your competitive bidding process or sign any contracts.
Applicants are required to maintain records of all bids and bidder communication, including all bids obtained (even those the applicant does not go forward with), and any factors utilized in evaluating the responses and determining the winning bidder (a “bid matrix,” which will be the subject of our next blog post). These records must be provided to auditors or USAC upon request.
Should you determine that you need help with your E-Rate application, or other services including telecom project management or a telecom audit, reach out to us at HWC Consultants!