A lot of non-profit and government organizations use competitive bidding to make sure they get the best value when they’re purchasing a new product or service, and the E-rate Program requires it!
Competitive bidding is a formal process to identify the products/services you need, and allow vendors to submit bids to provide them. The goal of competitive bidding is to attract as many bidders as possible, so you can receive better service and a lower price. For E-rate, you also need to remain fair and open so all vendors have an equal opportunity to win you as a customer.
E-rate requires at least 28 days of bidding
The E-rate Program requires a minimum 28-day competitive bidding period. This means that for 28 days, you cannot evaluate bids or select a service provider (you can start evaluation/selection on day 29).
The 28-day competitive bidding period starts when you submit your FCC Form 470 online. Some schools/libraries need to allow more time due to state or local procurement rules (check your state and local procurement rules!).
The right service at the best price
Think of competitive bidding as a contest between potential vendors to show you that they can provide the services that best address your needs at the best price possible.
A low cost is important, but you could choose a higher-cost service if it comes closer to fully addressing your needs. For example, if you were getting your home fixed, would you only select the builder on price? No! You would also consider their experience, reputation, etc., to find the best value.
Exemptions to competitive bidding
There is a situation where schools/libraries can skip competitive bidding. If you are buying services that:
- Are commercially available, business class Internet access services,
- Cost $3,600 or less annually per entity (including one-time costs like installation fees),
- Have speeds of at least 100 Mbps downstream and 10 Mbps upstream, and
- Provide basic conduit access to the Internet at those required minimum speeds,
then you are exempt from competitive bidding, and don’t need to keep your FCC Form 470 posted for 28 days. Instead, after you submit FCC Form 470, you can purchase the service and fill out FCC Form 471 right away.*
To qualify for an exemption, the service needs to meet ALL FOUR of the exemption requirements, not just some, so please note exemptions from competitive bidding are the exception rather than the rule. Most applicants must keep their forms posted for the full 28-day period.
In the next post, we’ll review how the competitive bidding process for E-rate works.
* If you are buying a service that is exempt from competitive bidding, we recommend filing an FCC Form 470 anyway, as a back-up plan. It’s especially helpful if there are “surprise” installation (or other) fees you find out about later that bump the cost over $3,600. Filing FCC Form 470 as a back-up plan protects you in case this happens. If you decide not to use it, on the FCC Form 471 question, “were you required to file an FCC Form 470?” just click “no;” it is perfectly OK to abandon an unused form.