Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C
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Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) Schools and Libraries ) CC Docket No. 02-6 Universal Service Support Mechanism ) ) Request for Review or Waiver by ) Application No. 181018926 Baltimore City School District ) Funding Request Nos. 1899054547 ) and 1899054557 REQUEST FOR REVIEW AND/OR WAIVER BY THE BALTIMORE CITY SCHOOL DISTRICT OF FUNDING DECISIONS BY THE UNIVERSAL SERVICE ADMINISTRATIVE COMPANY In accordance with sections 54.719 and 54.722 of the Federal Communications Commission's (“FCC” or “Commission”) rules,1 the Baltimore City School District2 (“BCSD” or “Applicant”) hereby respectfully requests review of a Universal Service Administrative Company (USAC) decision to deny Schools and Libraries Universal Service Support Mechanism (E-Rate) funding for Funding Year 2018.3 USAC denied the above-referenced Funding Request Numbers (FRNs) for Funding Year 2018 because it claimed that BCSD made “cardinal changes to the FCC Form 470” and “because applicant did not wait 28 days after making cardinal changes to the FCC Form 470/RFP.”4 USAC based its decision on three addenda that were posted in the E-Rate Productivity Center (EPC) less than 28 days prior to closing the bid process. 1 47 C.F.R. § 54.719(b), (c); 47 C.F.R. § 54.722(a). 2 Billed Entity Number: 126376. 3 Exhibit 1, FRN Status Tool Spreadsheet with FCDL Comments. 4 See Exhibit 1. BCSD respectfully asks the Wireline Competition Bureau (“WCB” or “Bureau”) to reverse USAC’s decision. The RFP addenda at issue merely offered clarifications to alleviate confusion and/or questions from interested service providers, which cannot reasonably be considered cardinal changes based on USAC’s own guidance. As an alternative, if the Bureau agrees that BCSD violated the 28-day rule, BCSD requests a waiver of that rule. BCSD received four bids in response to the RFP and selected the most cost-effective bid. Therefore, it is clear that the three addenda cited by USAC in its denial explanation did not compromise the fair and open competitive bidding process. I. BACKGROUND Baltimore City School District is an urban metropolitan school district comprised of 177 schools and 80,900 students, 83% are eligible for free and reduced-price meals.5 On September 1, 2017, BCSD posted FCC Form 470 Number 180000022 and RFP- 18008 in EPC seeking bids for 1 Gbps to 10 Gbps Wide Area Network (WAN) services via Leased Lit Fiber, Leased Dark Fiber, or a Dark Fiber Indefeasible Right of Use (IRU). The deadline for bid submission was November 2, 2017. On October 16, 2017, BCSD issued Addendum # 3,6 which provided clarifications based on questions submitted by interested service providers. 5 Information available at: http://www.marylandpublicschools.org/programs/Pages/School-Community- Nutrition/FreeReducedPriceMealStatistics.aspx 6 Exhibit 2, Addendum No 3, dated October 16, 2017. On October 24, 2017, BCSD issued Addendum # 4,7 which provided clarification of a response given in Addendum # 3, for which additional information had been submitted by the service provider. On October 27, 2017, BCSD issued Addendum # 5,8 which provided a corrected Financial Proposal Form, replacing Financial Proposal Worksheet-Appendix H9 with Financial Proposal Worksheet-Appendix H v2.10 Six service provider submitted bids by the November 2, 2017 deadline. Education Networks of America (ENA) and K12 Networks submitted bids for Leased Lit Fiber. Comcast submitted a bid for Leased Dark Fiber. ENA and Port Networks submitted bids for Leased Dark Fiber IRU. BCSD selected ENA’s Leased Dark Fiber IRU as the most cost-effective bid received, and submitted its Funding Year 2018 FCC Form 471 Number 181018926 on March 22, 2018. On November 16, 2018, USAC denied FRNs 1899054557 and 1899054547,11 stating: DR1: Applicants are required to conduct a fair and open competitive bid process. Applicants are also required to post the FCC Form 470 and any requests for proposals (or other bidding documentation) in the E-rate Productivity Center and wait at least 28 days prior to selecting the winning bid. If the applicant makes cardinal changes to the FCC Form 470 or to other bidding documents, the applicant must post the updates in E-rate Productivity Center and wait an additional 28 days prior to closing the bid process. During the review, it was determined that the applicant made cardinal changes to the FCC Form 470. Specifically, Addendum No 3 modified the requested network design from a ring topology to a point to 7 Exhibit 3, Addendum No 4, dated October 24, 2017. 8 Exhibit 4, Addendum No 5, dated October 27, 2017. 9 Exhibit 5, Financial Proposal Worksheet – Appendix H 10 Exhibit 6, Financial Proposal Worksheet – Appendix H v2 11 See Exhibit 1. point network and was posted on 10/16/2017, 17 days from the due date of 11/02/2017. Addendum No 4 provided clarification on who needed to attend the mandatory meeting and was posted on 10/24/2017, 9 days from the due date of 11/02/2017. Addendum No 5 and revised Proposal Worksheet was posted on 10/27/2017, 6 days from the due date of 11/02/2017. All amendments referenced above represented a cardinal change and the applicant did not wait 28 days after making this cardinal change to the FCC Form 470. Therefore, this FRN is denied… And; DR1: This FRN is associated with FRN 1899054557. FRN 1899054557 is denied because applicant did not wait 28 days after making cardinal changes to the FCC Form 470/RFP. This FRN requests maintenance and operations associated with the denied FRN. Therefore, this FRN is also denied. BCSD appealed USAC’s denial on January 15, 2019. USAC denied the appeal on December 27, 2019, restating its previous determinations.12 Appeals to the Commission are due within 60 days.13 As such, this appeal is timely filed. II. USAC’S TREATMENT OF CARDINAL CHANGES DOES NOT APPEAR TO BE CONSISTENT WITH COMMISSION INTENT The Commission used the term “cardinal change” to provide guidance to applicants regarding situations that would necessitate rebidding a multi-year contract. Specifically, the Commission stated applicants must rebid a contract when the applicant wants to procure services that exceed the scope of the original contract.14 USAC has applied this guidance to Requests for Proposals (RFPs), even though the Commission has done so itself. 12 Exhibit 7, FRN Status Tool Spreadsheet with Post Commitment Rationale. 13 47 C.F.R. § 54.720. 14 Federal-State Joint Board on Universal Service, Access Charge Reform, Price Cap Performance Review for Local Exchange Carriers, Transport Rate Structure and Pricing End User Common Line Charge, Fourth Order on Reconsideration, CC Docket Nos. 96-45, 96-45, 96-262, 94-1, 91-213, 95-72, 13 FCC Rcd 5318, ¶ 228 (1997) (Fourth Order on Reconsideration). USAC has provided the following guidance pertaining to cardinal changes: “In general, if you are making one or more significant ("cardinal") changes that are outside the original scope of your competitive bid, you should file a new FCC Form 470… “If your changes can fit into the description of you existing FCC Form 470 – and you attached at least one RFP documents to your original form – you can add one or more RFP documents to provide information about the change(s) you want to make. However, if your changes are significant, you must restart your 28-day clock.”15 “In general, you should post a new FCC Form 470 if you make one or more significant changes that are outside the scope of your original project or service requests ("cardinal changes). In some cases, you can explain those changes by posting a new RFP document to an existing form, but you will have to start a new 28-day waiting period and count the days yourself.”16 “If the document you are now issuing results in a cardinal change to your original form and any attached documents, you must restart your 28-day clock. A cardinal change is a change that is outside of the scope of your original project, and is significant enough that bids submitted in response to your original submission would not adequately address the change in scope.”17 Additionally, the SLD has released guidance that specifically refutes its denial reasons: “If the document you are now issuing does not result in a cardinal change, you do not need to restart your 28-day clock. For example, your document could be a list of clarifying questions from potential bidders together with 15 Exhibit 8, Schools and Libraries Program January 26, 2018 News Brief, p. 3 (emphasis added). 16 Exhibit 9, Schools and Libraries Program February 9, 2018 News Brief, p. 2 (emphasis added) 17 Exhibit 10, Schools and Libraries Program February 16, 2018 News Brief, p. 2 (emphasis added) your answers, or a notice of a minor correction that is within the scope of your original submission.”18 (emphasis added) None of the addenda cited in the denial reason meet these definitions. The scope of BCSD’s RFP was to solicit proposals to “compare lit services, leased dark fiber service, and Indefeasible Right of Use (IRU) dark fiber service, to meet the current and future bandwidth needs.” None of the three addendums cited above changed that scope. III. BCSD’S ADDENDUM # 3 DID NOT REPRESENT A CARDINAL CHANGE USAC’s assessment of Addendum No 3 was incorrect. First, RFP-1800819 did not request or specify a ring topology; in fact, the RFP did not specify any topology, nor did it contain the word “ring”. Sections 3.1.1 LIT FIBER SERVICE OPTION SPECIFICATIONS20 and 3.1.2 LEASED DARK FIBER SERVICE OPTION SPECIFICATIONS21clearly stated “…Respondents may propose to connect sites to one of the City Schools Data Center Facilities with logical redundancy to the other...” (emphasis added) and provided a graphic for illustrative purposes only.