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Denies request from Pennsauken Township School District seeking review

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Released: May 2, 2013

Federal Communications Commission

DA 13-870

Before the

Federal Communications Commission

Washington, DC 20554

In the Matter of
)
)
Request for Review of a
)
Decision of the
)
Universal Service Administrator by
)
)
Pennsauken Township School District
)
File No. SLD-650758
Pennsauken, NJ
)
)
Schools and Libraries Universal Service
)
CC Docket No. 02-6
Support Mechanism
)

ORDER

Adopted: May 2, 2013


Released: May 2, 2013

By the Chief, Telecommunications Access Policy Division, Wireline Competition Bureau:
1.
Consistent with precedent,1 we deny a request from Pennsauken Township School District
(Pennsauken) seeking review of a decision made by the Universal Service Administrative Company
(USAC) under the E-rate program (more formally known as the schools and libraries universal service
support program).2 In its decision, USAC determined that Pennsauken violated E-rate program rules
because Pennsauken failed to provide documentation regarding its vendor selection process for funding
request number (FRN) 1809245 and thus could not demonstrate compliance with the Commission’s
competitive bidding rules.3
2.
Under the Commission’s competitive bidding rules, applicants must submit for posting on
USAC’s website an FCC Form 470 requesting discounts for E-rate eligible services or any services for


1 See Request for Review of the Decision of the Universal Service Administrator by Central Islip Free Union School
District et al.; Schools and Libraries Universal Service Support Mechanism
, CC Docket No. 02-6, Order, 26 FCC
Rcd 8630, 8636, para. 12 (Wireline Comp. Bur. 2011) (finding that petitioners violated the Commission’s
competitive bidding rules because they failed to provide documentation regarding the vendor selection process for
the services at issue); Request for Review of the Decision of the Universal Service Administrator by Gila Bend
Unified School District 24; Schools and Libraries Universal Service Support Mechanism
, CC Docket No. 02-6,
Order, 26 FCC Rcd 6870, 6873-74, para. 8 (Wireline Comp. Bur. 2011) (finding that the applicant failed to retain
the required documentation that would demonstrate its compliance with the Commission’s competitive bidding
rules).
2 See Letter from Shari D. Phillips, E-Rate Exchange, on behalf of Pennsauken Township School District, to
Marlene H. Dortch, Secretary, Federal Communications Commission, CC Docket No. 02-6 (filed Sept. 30, 2010)
(regarding funding year 2009 FCC Form 471 application number 650758, funding request number (FRN) 1809245)
(Request for Review). Section 54.719(c) of the Commission’s rules provides that any person aggrieved by an action
taken by a division of USAC may seek review from the Commission. 47 C.F.R. § 54.719(c).
3 See Letter from USAC, Schools and Libraries Division, to Shari D. Philips, E-Rate Exchange, on behalf of
Pennsauken Township School District (dated Sept. 13, 2010) (Administrator’s Decision on Appeal Letter) (ADL);
Letter from USAC, Schools and Libraries Division, to Shari D. Philips, E-Rate Exchange, on behalf of Pennsauken
Township School District (dated June 3, 2010) (Funding Commitment Decision Letter) (FCDL).

Federal Communications Commission

DA 13-870

which the applicant is seeking a new contract.4 The applicant must describe the requested services with
sufficient specificity to enable potential service providers to submit bids for such services.5 After
submitting an FCC Form 470, the applicant must wait 28 days before making commitments with the
selected service providers.6 The applicant must consider all submitted bids prior to entering into a
contract, and price must be the primary factor in selecting the winning bid.7 The Commission’s rules
require applicants to retain all documents related to the application for, and receipt and delivery of, E-rate
eligible services for at least five years after the last day of service delivered in a particular funding year.8
Any document that demonstrates compliance with the statutory or regulatory requirements for the schools
and libraries mechanism must be retained as well.9 Applicants and service providers are required to
produce such records upon request.10
3.
Based on our review of the record, we affirm USAC’s decision and find that Pennsauken
failed to provide documentation concerning the vendor selection process for FRN 1802945 and therefore
failed to demonstrate how its vendor selection process complied with E-rate program rules.11
Specifically, the record shows that Pennsauken initiated a competitive bidding process for
telecommunications services in funding year 2009 by filing an FCC Form 470, which was posted on
December 22, 2008.12 Pennsauken states that it received one bid from Magellan Hill (Magellan) in
response to this posting and then selected Magellan to provide the requested services.13 According to
Pennsauken, Magellan was unable to provide the documentation needed to secure the service contract
before the FCC Form 471 application certification deadline. Therefore, Pennsauken states that it
requested and obtained an informal quote from Verizon New Jersey (Verizon) to provide the requested
services.14 Pennsauken then submitted its funding year 2009 FCC Form 471 application naming Verizon
as the selected service provider for the FRN at issue.15
4.
During the program integrity assurance review process, USAC asked Pennsauken to
provide documentation explaining its vendor selection process.16 Specifically, USAC asked Pennsauken
to provide the bid evaluation sheets that Pennsauken created during the bid evaluation period and
evidence of how it selected Verizon as its vendor (indicating the criteria used and the weighting of the
criteria in percentages that identifies which criteria was the primary factor for the selection of winning


4 See 47 C.F.R. § 54.504 (2009); see also 47 C.F.R. § 54.503 (2011).
5 Id.
6 Id.
7 See 47 C.F.R. §§ 54.504, 54.511 (2009); see also 47 C.F.R. §§ 54.503, 54.511 (2011).
8 See 47 C.F.R. § 54.516(a)..
9 Id.
10 Id.
11 See 47 C.F.R. §§ 54.504, 54.511, 54.516 (2009); see also 47 C.F.R. §§ 54.503, 54.511, 54.516 (2011).
12 See FCC Form 470, Pennsauken Township School District (posted Dec. 22, 2008).
13 See Request for Review.
14 Id.
15 See FCC Form 471, Pennsauken Township School District (Feb. 6, 2009).
16 See Letter from USAC, Schools and Libraries Division, to Shari D. Philips, E-Rate Exchange, on behalf of
Pennsauken Township School District (dated Mar. 24, 2010).
2

Federal Communications Commission

DA 13-870

bids).17 Additionally, USAC asked Pennsauken to provide copies of “all correspondence between the
applicant’s entity and any service providers or consultants regarding the competitive bidding process and
the application process.”18 Pennsauken failed to provide any documentation regarding its vendor
selection process for the FRN at issue (or the alleged deficiencies of Magellan’s contract) except to
produce a copy of its E-rate bid response log and the single bid submitted by Magellan.19 Further,
Pennsauken failed to provide copies of any correspondence, file memoranda, or documentation explaining
what prevented it from executing its contract with Magellan. USAC therefore denied Pennsauken’s
request for E-rate support.20
5.
On appeal, Pennsauken simply asserts that it selected Verizon to provide the services at
issue because Magellan was unable to secure the service contract before the FCC Form 471 application
filing window deadline.21 However, Pennsauken provides no documentation supporting this allegation.22
Because Pennsauken has failed to demonstrate compliance with the competitive bidding rules and also
appears to have violated applicable document retention requirements,23 we find no basis upon which to
grant the requested relief. Consequently, we deny Pennsauken’s Request for Review.


17 Id.; Letter from USAC, Schools and Libraries Division, to Shari D. Philips, E-Rate Exchange, on behalf of
Pennsauken Township School District (dated Feb. 2, 2010) (Selective Review Information Request).
18 See Selective Review Information Request.
19 See Request for Review. We note that Magellan’s bid included proposed pricing for the desired services, the
terms and conditions of providing the services, and signature lines to enable the parties to move forward with
contract execution. See Letter from Ronald B. Johnson, Magellan Hill Technologies, to Fred Hanke, Director of
Technology, Pennsauken Township School District (dated Dec. 23, 2008).
20 See ADL; FCDL.
21 See Request for Review.
22 Note that the Commission permits applicants to initiate service provider identification number (SPIN) changes for
specified reasons (e.g., the service provider went out of business or is unable to perform) after a funding
commitment has been issued. See Schools and Libraries Universal Service Support Mechanism; A National
Broadband Plan for Our Future
, CC Docket No. 02-6, GN Docket No. 09-51, Sixth Report and Order, 25 FCC Rcd
18762, 18802, para. 91 (2010). Applicants must have a legitimate reason for the SPIN change and be able to
demonstrate why the current service provider is unable to continue with the service contract. Id.; see also Request
for Review of the Decision of the Universal Service Administrator by Copan Public Schools; Federal-State Joint
Board on Universal Service; Changes to the Board of Directors of the National Exchange Carrier Association, Inc.,
CC Docket Nos. 96-45, 97-21, Order, 15 FCC Rcd 5498 (2000) (Copan Order). We recognize that the
circumstances presented here do not trigger the Commission’s SPIN change procedures. However, we take this
opportunity to emphasize that if an applicant needs to make a change from one service provider to another, the
applicant must provide, at a minimum, documentation demonstrating the reason for the change. See Copan Order.
23 See 47 C.F.R. §§ 54.504, 54.511, 54.516 (2009); see also 47 C.F.R. §§ 54.503, 54.511, 54.516 (2011).
3

Federal Communications Commission

DA 13-870

6.
ACCORDINGLY, IT IS ORDERED, pursuant to the authority contained in sections 1-4
and 254 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151-154 and 254, and sections
0.91, 0.291and 54.722(a) of the Commission’s rules, 47 C.F.R. §§ 0.91, 0.291 and 54.722(a), that the
Request for Review filed by Pennsauken Township School District IS DENIED.
FEDERAL COMMUNICATIONS COMMISSION
Kimberly A. Scardino
Chief
Telecommunications Access Policy Division
Wireline Competition Bureau
4

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