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Henrico County School District, Henrico, VA Document

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Released: September 11, 2013

Federal Communications Commission

DA 13-1884

Before the

Federal Communications Commission

Washington, DC 20554

In the Matter of
)
)
Petition for Reconsideration by
)
)
Henrico County School District
)
File No. SLD- 607894
Henrico, VA
)
)
Schools and Libraries Universal Service
)
CC Docket No. 02-6
Support Mechanism
)

ORDER ON RECONSIDERATION

Adopted: September 11, 2013

Released: September 11, 2013
By the Chief, Telecommunications Access Policy Division, Wireline Competition Bureau:
1.
Consistent with precedent,1 we deny a petition for reconsideration filed by Henrico County
School District (Henrico).2 The Henrico Order affirmed the decision of the Universal Service
Administrative Company (USAC) to deny funding under the E-rate program (more formally known as the
schools and libraries universal service support program) for funding year 2008.3 In its decision, USAC
found that Henrico failed to use price as the primary factor in its vendor selection process in violation of
the Commission’s competitive bidding requirements.4 Based upon our review of the record, we affirmed
USAC’s decision and denied Henrico’s request for review.5

1 Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Report and Order, 12 FCC Rcd 8776,
9029, para. 481 (1997) (Universal Service First Report and Order) (subsequent history omitted) (stating that price
must be the primary factor in selecting the winning bid); Request for Review of the Decision of the Universal Service
Administrator by Ysleta Independent School District et al.
, CC Docket Nos. 96-45, 97-21, Order, 18 FCC Rcd
26407, 26429, para. 50 (2003) (Ysleta Order) (stating that when evaluating bids, the “cost category” must be given
more weight than any other single factor).
2 The Bureau has the authority to act on petitions requesting reconsideration of final actions taken pursuant to
delegated authority. 47 C.F.R. § 1.106(a)(1); Letter from Peter Taylor, Henrico County School District, to Marlene
H. Dortch, Secretary, Federal Communications Commission, CC Docket No. 02-6 (filed June 3, 2013) (Petition for
Reconsideration) (regarding funding year 2008 FCC Form 471 application number 607894 (funding request
numbers (FRNs) 1700625 and 1077654)).
3 See Request for Review of a Decision of the Universal Service Administrator by Henrico County School District;
Schools and Libraries Universal Service Support Mechanism
, CC Docket No. 02-6, Order, 28 FCC Rcd 6277
(Wireline Comp. Bur. 2013) (Henrico Order); 47 C.F.R. §§ 54.504, 54.511 (2008); see also 47 C.F.R. §§ 54.503,
54.511 (2011) (requiring applicants to use price as the primary factor in the vendor selection process). In this order,
we describe the requirements of the E-rate program as they currently exist, but because the order involves an
application from funding year 2008, and the Commission has reorganized the E-rate rules since then, where the
Commission’s codification of the rules in the Code of Federal Regulations has changed, we also cite to the relevant
rules as they existed during the relevant funding year.
4 See Henrico Order; 47 C.F.R. §§ 54.504, 54.511 (2008); see also 47 C.F.R. §§ 54.503, 54.511 (2011).
5 See Henrico Order.

Federal Communications Commission

DA 13-1884
2.
Under the E-rate program, eligible schools, libraries, and consortia that include eligible
schools and libraries may apply for discounts for eligible services.6 The Commission’s rules provide that
these entities must seek competitive bids for all services eligible for support.7 Applicants must submit for
posting on USAC’s website an FCC Form 470 requesting discounts for E-rate eligible services or any
services for which the applicant is seeking a new contract.8 The Commission’s rules require applicants to
carefully consider all submitted bids prior to entering into a contract, and that they treat the price of
eligible products and services as the primary factor in selecting the winning bid.9 Applicants may also
consider relevant factors other than the pre-discount prices submitted by providers, such as prior
experience, personnel qualifications, management capability, and environmental objectives.10 When
evaluating bids, however, applicants must have a separate “cost category” and that category must be
given more weight than any other single factor.11
3.
In the Henrico Order, we found that Henrico failed to comply with the Commission’s
competitive bidding requirements for funding request numbers (FRNs) 1700625 and 1077654, because it
did not assign the greatest weight to price in selecting Verizon as its vendor.12 We rejected Henrico’s
argument that it would have selected Verizon if it had assigned price a weight of 30 percent, which would
have been the highest weight assigned to any factor.13 We explained that Henrico’s ability to find, with
the benefit of hindsight, a way to re-engineer its bidding process after the conclusion of its competitive
bidding process to reach an identical result using price as the primary factor did not demonstrate
compliance with the Commission’s competitive bidding rules at the time of its vendor selection process.14
Additionally, we determined that the underlying record did not reveal any special circumstances that
would justify a waiver of the Commission’s competitive bidding rules.15
4.
In its petition for reconsideration, Henrico raises new arguments that it did not previously
present in its initial request for review. While Henrico acknowledges that price was not the primary
consideration in its vendor evaluation process, it now argues that a waiver of the E-rate program rules is

6 47 C.F.R. §§ 54.501-54.502.
7 47 C.F.R. § 54.504 (2008); see also 47 C.F.R. § 54.503 (2011).
8 See id. See also Schools and Libraries Universal Service, Description of Services Requested and Certification
Form, OMB 3060-0806 (October 2004) (FCC Form 470).
9 See 47 C.F.R. §§ 54.504, 54.511 (2008); 47 C.F.R. §§ 54.503, 54.511 (2011). See also Universal Service First
Report and Order
, 12 FCC Rcd at 9029, para. 481; Ysleta Order, 18 FCC Rcd at 26429, para. 50.
10 Universal Service First Report and Order, 12 FCC Rcd at 9029-30, para. 481. See also 47 C.F.R. § 54.511.
11 See Ysleta Order, 18 FCC Rcd at 26429, para. 50. For example, if an applicant assigns 10 points to reputation and
10 points to past experience, the applicant would be required to assign at least 11 points to price. Id. at n.138.
12 See Henrico Order, 28 FCC Rcd at 6278-79, para. 4; 47 C.F.R. §§ 54.504, 54.511 (2008); see also 47 C.F.R. §§
54.503, 54.511 (2011).
13 See Henrico Order at 6278-79, para. 4.
14 Id.
15 See id. (stating that the winning vendor’s proposal was higher than competing bids); 47 C.F.R. §§ 54.504, 54.511
(2008); see also 47 C.F.R. §§ 54.503, 54.511 (2011). Generally, the Commission’s rules may be waived if good
cause is shown. 47 C.F.R. § 1.3. The Commission may exercise its discretion to waive a rule where the particular
facts make strict compliance inconsistent with the public interest. Northeast Cellular Telephone Co. v. FCC, 897
F.2d 1164, 1166 (D.C. Cir. 1990) (Northeast Cellular). In addition, the Commission may take into account
considerations of hardship, equity, or more effective implementation of overall policy on an individual basis. WAIT
Radio v. FCC
, 418 F.2d 1153, 1159 (D.C. Cir. 1969); Northeast Cellular, 897 F.2d at 1166. Waiver of the
Commission’s rules is appropriate only if both (i) special circumstances warrant a deviation from the general rule,
and (ii) such deviation will serve the public interest. Northeast Cellular, 897 F.2d at 1166.
2

Federal Communications Commission

DA 13-1884
warranted consistent with the Allendale Order, which waived the Commission’s rules for applicants that
failed to use price as the primary factor in its vendor evaluation process, but selected the lowest-cost
provider.16 Specifically, Henrico argues that if it had known that the Commission would allow applicants
to ignore non-responsive bids, as it did in Allendale, then it would have emphasized on its vendor
evaluation sheets that the lowest bid, submitted by Sprint Communications, was not responsive and
should have been excluded from consideration.17 Henrico asserts that its selection of the Verizon
proposal would then have been justified under the Allendale Order because it was the lowest responsive
bid.18 The Commission’s rules specify that a petition for reconsideration may be dismissed or denied
where the petition relies on facts or arguments not presented in the original appeal.19 We therefore
conclude that, because Henrico did not afford the Bureau an opportunity to address this argument as part
of its initial request for review, we will not consider this argument at this stage of the process.20
5.
As an alternative and independent basis for rejecting Henrico’s petition for reconsideration
seeking a waiver of the Commission’s rules, we deny the petition for reconsideration on the merits.21 As
the Commission has previously indicated, we are deeply concerned about practices that undermine the
framework of the competitive bidding process.22 Henrico could have structured its vendor evaluation
process in a manner that disqualified or excluded non-responsive bids, even before the issuance of the
Allendale Order.23 In fact, in its petition for reconsideration, Henrico acknowledges that it is the
prerogative of the contracting entity to deem a bid unresponsive when a vendor responds to a bid with an
unusually low price and virtually no evidence that the vendor is able to perform the work.24 Yet, at the
conclusion of its bid evaluation process, Henrico did not exclude the Sprint Communications bid as being
non-responsive nor did the bid evaluation sheets specify that the Sprint Communications bid should be

16 See Petition for Reconsideration at 1-2; Request for Review of Decisions of the Universal Service Administrator by
Allendale County School District et al.; Schools and Libraries Universal Service Support Mechanism
, CC Docket
No. 02-6, Order, 26 FCC Rcd 6109 (Wireline Comp. Bur. 2011) (Allendale Order) (finding that a waiver of the
Commission’s competitive bidding rules was in the public interest where the petitioners selected the least expensive
responsive service offering).
17 See Petition for Reconsideration at 3.
18 Id.
19 See 47 C.F.R. § 1.106(p)(2) (stating that petitions for reconsideration of a Commission action, not warranting
consideration by the Commission, may be “dismissed or denied by the relevant bureau(s) or office(s) where the
petition relies on facts or arguments which have not previously been presented to the Commission and which do not
meet the requirements of paragraphs (b)(2), (b)(3), or (c) of this section”). The Petition for Reconsideration does not
meet the requirements of paragraphs (b)(2), (b)(3), and (c) of section 1.106 of the Commission’s rules because it
does not relate to events which have occurred or circumstances which have changed since Henrico’s last opportunity
to present such matters to the Commission. See infra para. 5. See also 47 C.F.R. §§ 1.106(b)(2), (b)(3), (c).
20 See 47 C.F.R. § 1.106(p)(2).
21 See Petition for Reconsideration at 2.
22 See Universal Service First Report and Order, 12 FCC Rcd at 9076-80, paras. 570-80 (requiring applicants to
conduct a fair and open competitive bidding process when seeking support for eligible products and services);
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
, CC Docket Nos. 96-45,
96-262, 94-1, 91-213, and 95-72, Report and Order and Fourth Order on Reconsideration, 13 FCC Rcd 5318, 5425-
26, para. 185 (1997) (stating that competitive bidding is a key component of the Commission’s effort to ensure that
universal service funds support services that satisfy the precise needs of an institution, and that the services are
provided at the lowest possible rates).
23 See Allendale Order.
24 See Petition for Reconsideration at 4.
3

Federal Communications Commission

DA 13-1884
excluded as non-responsive. Further, Henrico did not make this argument in its initial appeal to the
Commission.25 Thus, the record does not support a determination that the Sprint Communications bid
was unresponsive. Instead, it appears that on reconsideration, Henrico is simply offering yet another way
to re-engineer its competitive bidding process after the conclusion of that process to reach its desired
result. As we explained in the Henrico Order, the fact that Henrico can find a way to re-engineer the
process to reach its desired result reach does not demonstrate compliance with the Commission’s
competitive bidding rules at the time of its vendor selection process.26 We therefore find that Henrico has
not provided special circumstances justifying a waiver of the Commission’s rules and has not otherwise
demonstrated that such waiver will serve the public interest. Consequently, we find no basis upon which
to grant the requested relief, and we deny Henrico’s petition for reconsideration.
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, 0.291, 1.3, 1.106, and 54.722(a) of the Commission's rules, 47 C.F.R. §§ 0.91, 0.291, 1.3, 1.106, and
54.722(a), that the Petition for Reconsideration filed by Henrico County School District on June 3, 2013
IS DENIED.
FEDERAL COMMUNICATIONS COMMISSION
Kimberly A. Scardino
Chief
Telecommunications Access Policy Division
Wireline Competition Bureau

25 See Letter from Dr. Paul F. Kolmetz, Henrico County School District, to Marlene H. Dortch, Secretary, Federal
Communications Commission, CC Docket No. 02-6 (filed Mar. 12, 2009).
26 Id.
4

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