Goto Section: 54.621 | 54.623 | Table of Contents

FCC 54.622
Revised as of January 15, 2020
Goto Year:2019 | 2021
  § 54.622   Competitive bidding requirements and exemptions.

   (a) Competitive bidding requirement. All applicants are required to
   engage in a competitive bidding process for supported services,
   facilities, or equipment, as applicable, consistent with the
   requirements set forth in this section and any additional applicable
   state, Tribal, local, or other procurement requirements, unless they
   qualify for an exemption listed in paragraph (j) in this section. In
   addition, applicants may engage in competitive bidding even if they
   qualify for an exemption. Applicants who utilize a competitive bidding
   exemption may proceed directly to filing a funding request as described
   in § 54.623.

   (b) Fair and open process. (1) Applicants participating in the
   Telecommunications Program or Healthcare Connect Fund Program must
   conduct a fair and open competitive bidding process. The following
   actions are necessary to satisfy the “fair and open” competitive
   standard in the Telecommunications Program and the Healthcare Connect
   Fund Program:

   (i) All potential bidders and service providers must have access to the
   same information and must be treated in the same manner throughout the
   procurement process.

   (ii) Service providers who intend to bid on supported services many not
   simultaneously help the applicant complete its request for proposal
   (RFP) or Request for Services form.

   (iii) Service providers who have submitted a bid to provide supported
   services, equipment, or facilities to a health care provider may not
   simultaneously help the health care provider evaluate submitted bids or
   choose a winning bid.

   (iv) Applicants must respond to all service providers that have
   submitted questions or proposals during the competitive bidding
   process.

   (v) All applicants and service providers must comply with any
   applicable state, Tribal, or local procurement laws, in addition to the
   Commission's competitive bidding requirements. The competitive bidding
   requirements in this section are not intended to preempt such state,
   Tribal, or local requirements.

   (c) Selecting a cost-effective service. In selecting a provider of
   eligible services, the applicant shall carefully consider all bids
   submitted and must select the most cost-effective means of meeting its
   specific health care needs. “Cost-effective” is defined as the method
   that costs the least after consideration of the features, quality of
   transmission, reliability, and other factors that the health care
   provider deems relevant to choosing a method of providing the required
   health care services. In the Healthcare Connect Fund Program, when
   choosing the most “cost-effective” bid, price must be a primary factor,
   but need not be the only primary factor. A non-price factor may receive
   an equal weight to price, but may not receive a greater weight than
   price.

   (d) Bid evaluation criteria. Applicants must develop weighted
   evaluation criteria (e.g., a scoring matrix) that demonstrates how the
   applicant will choose the most cost-effective bid before submitting its
   request for services. The applicant must specify on its bid evaluation
   worksheet and/or scoring matrix the requested services for which it
   seeks bids, the information provided to bidders to allow bidders to
   reasonably determine the needs of the applicant, its minimum
   requirements for the developed weighted evaluation criteria, and each
   service provider's proposed service levels for the criteria. The
   applicant must also specify the disqualification factors, if any, that
   it will use to remove bids or bidders from further consideration. After
   reviewing the bid submissions and identifying the bids that satisfy the
   applicant's specific needs, the applicant must then select the service
   provider that offers the most cost-effective service.

   (e) Request for Services. Applicants must submit the following
   documents to the Administrator in order to initiate competitive
   bidding:

   (1) Request for Services, including certifications. The applicant must
   submit a Request for Services and make the following certifications as
   part of its Request for Services:

   (i) The health care provider seeking supported services is a public or
   nonprofit entity that falls within one of the seven categories set
   forth in the definition of health care provider, listed in § 54.600;

   (ii) The health care provider seeking supported services is physically
   located in a rural area as defined in § 54.600, or is a member of a
   Healthcare Connect Fund Program consortium which satisfies the rural
   health care provider composition requirements set forth in § 54.607(b);

   (iii) The person signing the application is authorized to submit the
   application on behalf of the health care provider or consortium
   applicant;

   (iv) The person signing the application has examined the Request for
   Services and all attachments, and to the best of his or her knowledge,
   information, and belief, all statements contained in the request are
   true;

   (v) The applicant has complied with any applicable state, Tribal, or
   local procurement rules;

   (vi) All requested Rural Health Care Program support will be used
   solely for purposes reasonably related to the provision of health care
   service or instruction that the health care provider is legally
   authorized to provide under the law of the state in which the services
   are provided;

   (vii) The supported services will not be sold, resold, or transferred
   in consideration for money or any other thing of value;

   (viii) The applicant satisfies all of the requirements under section
   254 of the Act and applicable Commission rules; and

   (ix) The applicant has reviewed all applicable requirements for the
   Telecommunications Program or the Healthcare Connect Fund Program, as
   applicable, and will comply with those requirements.

   (2) Aggregated purchase details. If the service or services are being
   purchased as part of an aggregated purchase with other entities or
   individuals, the full details of any such arrangement, including the
   identities of all co-purchasers and the portion of the service or
   services being purchased by the health care provider, must be
   submitted.

   (3) Bid evaluation criteria. Requirements for bid evaluation criteria
   are described in paragraph (d) in this section and must be included
   with the applicant's Request for Services.

   (4) Declaration of Assistance. All applicants must submit a
   “Declaration of Assistance” with their Request for Services. In the
   Declaration of Assistance, the applicant must identify each and every
   consultant, service provider, and other outside expert, whether paid or
   unpaid, who aided in the preparation of its applications. The applicant
   must also describe the nature of the relationship it has with each
   consultant, service provider, or other outside expert providing such
   assistance.

   (5) Request for proposal (if applicable). (i) Any applicant may use an
   RFP. Applicants who use an RFP must submit the RFP and any additional
   relevant bidding information to the Administrator with its Request for
   Services.

   (ii) An applicant must submit an RFP:

   (A) If it is required to issue an RFP under applicable State, Tribal,
   or local procurement rules or regulations;

   (B) If the applicant is a consortium seeking more than $100,000 in
   program support during the funding year, including applications that
   seek more than $100,000 in program support for a multi-year commitment;
   or

   (C) If the applicant is a consortium seeking support for
   participant-constructed and owned network facilities.

   (iii) RFP requirements.

   (A) An RFP must provide sufficient information to enable an effective
   competitive bidding process, including describing the health care
   provider's service needs and defining the scope of the project and
   network costs (if applicable).

   (B) An RFP must specify the time period during which bids will be
   accepted.

   (C) An RFP must include the bid evaluation criteria described in
   paragraph (d) in this section, and solicit sufficient information so
   that the criteria can be applied effectively.

   (D) Consortium applicants seeking support for long-term capital
   investments whose useful life extends beyond the time period of the
   funding commitment (e.g., facilities constructed and owned by the
   applicant, fiber indefeasible rights of use) must seek bids in the same
   RFP from service providers who propose to meet those needs via services
   provided over service provider-owned facilities, for a time period
   comparable to the life of the proposed capital investment.

   (E) Applicants may prepare RFPs in any manner that complies with the
   rules in this subpart and any applicable state, Tribal, or local
   procurement rules or regulations.

   (6) Additional requirements for Healthcare Connect Fund Program
   consortium applicants.

   (i) Network plan. Consortium applicants must submit a narrative
   describing specific elements of their network plan with their Request
   for Services. Consortia applicants are required to use program support
   for the purposes described in their narrative. The required elements of
   the narrative include:

   (A) Goals and objectives of the network;

   (B) Strategy for aggregating the specific needs of health care
   providers (including providers that serve rural areas) within a state
   or region;

   (C) Strategy for leveraging existing technology to adopt the most
   efficient and cost-effective means of connecting those providers;

   (D) How the supported network will be used to improve or provide health
   care delivery;

   (E) Any previous experience in developing and managing health
   information technology (including telemedicine) programs; and

   (F) A project management plan outlining the project's leadership and
   management structure, and a work plan, schedule, and budget.

   (ii) Letters of agency (LOA). Consortium applicants must submit LOAs
   pursuant to § 54.610.

   (f) Public posting by the Administrator. The Administrator shall post
   on its website the following competitive bidding documents, as
   applicable:

   (1) Request for Services;

   (2) Bid evaluation criteria;

   (3) RFP; and

   (4) Network plans for Healthcare Connect Fund Program applicants.

   (g) 28-day waiting period. After posting the documents described in
   paragraph (f) in this section, as applicable, on its website, the
   Administrator shall send confirmation of the posting to the applicant.
   The applicant shall wait at least 28 days from the date on which its
   competitive bidding documents are posted on the Administrator's website
   before selecting and committing to a service provider. The confirmation
   from the Administrator shall include the date after which the applicant
   may sign a contract with its chosen service provider(s).

   (1) Selection of the most “cost-effective” bid and contract
   negotiation. Each applicant is required to certify to the Administrator
   that the selected bid is, to the best of the applicant's knowledge, the
   most cost-effective option available. Applicants are required to submit
   the documentation, identified in § 54.623, to support their
   certifications.

   (2) Applicants who plan to request evergreen status under this section
   must enter into a contract that identifies both parties, is signed and
   dated by the health care provider or Consortium Leader after the 28-day
   waiting period expires, and specifies the type, term, and cost of
   service(s).

   (h) Gift restrictions. (1) Subject to paragraphs (h)(3) and (4) in this
   section, an eligible health care provider or consortium that includes
   eligible health care providers, may not directly or indirectly solicit
   or accept any gift, gratuity, favor, entertainment, loan, or any other
   thing of value from a service provider participating in or seeking to
   participate in the Rural Health Care Program. No such service provider
   shall offer or provide any such gift, gratuity, favor, entertainment,
   loan, or other thing of value except as otherwise provided in this
   section. Modest refreshments not offered as part of a meal, items with
   little intrinsic value intended solely for presentation, and items
   worth $20 or less, including meals, may be offered or provided, and
   accepted by any individual or entity subject to this rule, if the value
   of these items received by any individual does not exceed $50 from any
   one service provider per funding year. The $50 amount for any service
   provider shall be calculated as the aggregate value of all gifts
   provided during a funding year by the individuals specified in
   paragraph (h)(2)(ii) in this section.

   (2) For purposes of this paragraph:

   (i) The terms “health care provider” or “consortium” shall include all
   individuals who are on the governing boards of such entities and all
   employees, officers, representatives, agents, consultants, or
   independent contractors of such entities involved on behalf of such
   health care provider or consortium with the Rural Health Care Program,
   including individuals who prepare, approve, sign, or submit Rural
   Health Care Program applications, or other forms related to the Rural
   Health Care Program, or who prepare bids, communicate, or work with
   Rural Health Care Program service providers, consultants, or with the
   Administrator, as well as any staff of such entities responsible for
   monitoring compliance with the Rural Health Care Program; and

   (ii) The term “service provider” includes all individuals who are on
   the governing boards of such an entity (such as members of the board of
   directors), and all employees, officers, representatives, agents,
   consultants, or independent contractors of such entities.

   (3) The restrictions set forth in this paragraph shall not be
   applicable to the provision of any gift, gratuity, favor,
   entertainment, loan, or any other thing of value, to the extent given
   to a family member or a friend working for an eligible health care
   provider or consortium that includes eligible health care providers,
   provided that such transactions:

   (i) Are motivated solely by a personal relationship;

   (ii) Are not rooted in any service provider business activities or any
   other business relationship with any such eligible health care
   provider; and

   (iii) Are provided using only the donor's personal funds that will not
   be reimbursed through any employment or business relationship.

   (4) Any service provider may make charitable donations to an eligible
   health care provider or consortium that includes eligible health care
   providers in the support of its programs as long as such contributions
   are not directly or indirectly related to the Rural Health Care Program
   procurement activities or decisions and are not given by service
   providers to circumvent competitive bidding and other Rural Health Care
   Program rules, including those in § 54.611(a), requiring health care
   providers under the Healthcare Connect Fund Program to contribute 35
   percent of the total cost of all eligible expenses.

   (i) Exemptions to the competitive bidding requirements—(1) Government
   Master Service Agreement (MSA). Eligible health care providers that
   seek support for services and equipment purchased from MSAs negotiated
   by federal, state, Tribal, or local government entities on behalf of
   such health care providers and others, if such MSAs were awarded
   pursuant to applicable federal, state, Tribal, or local competitive
   bidding requirements, are exempt from the competitive bidding
   requirements under this section.

   (2) Master Service Agreements approved under the Rural Health Care
   Pilot Program or Healthcare Connect Fund Program. An eligible health
   care provider site may opt into an existing MSA approved under the
   Rural Health Care Pilot Program or Healthcare Connect Fund Program and
   seek support for services and equipment purchased from the MSA without
   triggering the competitive bidding requirements under this section, if
   the MSA was developed and negotiated in response to an RFP that
   specifically solicited proposals that included a mechanism for adding
   additional sites to the MSA.

   (3) Evergreen contracts. (i) The Administrator may designate a
   multi-year contract as “evergreen,” which means that the service(s)
   covered by the contract need not be re-bid during the contract term.

   (ii) A contract entered into by a health care provider or consortium as
   a result of competitive bidding may be designated as evergreen if it
   meets all of the following requirements:

   (A) Is signed by the individual health care provider or consortium lead
   entity;

   (B) Specifies the service type, bandwidth, and quantity;

   (C) Specifies the term of the contract;

   (D) Specifies the cost of services to be provided; and

   (E) Includes the physical location or other identifying information of
   the health care provider sites purchasing from the contract.

   (iii) Participants may exercise voluntary options to extend an
   evergreen contract without undergoing additional competitive bidding
   if:

   (A) The voluntary extension(s) is memorialized in the evergreen
   contract;

   (B) The decision to extend the contract occurs before the participant
   files its funding request for the funding year when the contract would
   otherwise expire; and

   (C) The voluntary extension(s) do not exceed five years in the
   aggregate.

   (4) Schools and libraries program master contracts. Subject to the
   provisions in § 54.500, § 54.501(c)(1), and § 54.503, an eligible health
   care provider in a consortium with participants in the schools and
   libraries universal service support program and a party to the
   consortium's existing contract is exempt from the competitive bidding
   requirements if the contract was approved in the schools and libraries
   universal service support program as a master contract. The health care
   provider must comply with all Rural Health Care Program rules and
   procedures except for those applicable to competitive bidding.

   (5) Annual undiscounted cost of $10,000 or less. An applicant under the
   Healthcare Connect Fund Program that seeks support for $10,000 or less
   of total undiscounted eligible expenses for a single year is exempt
   from the competitive bidding requirements under this section, if the
   term of the contract is one year or less. This exemption does not apply
   to applicants under the Telecommunications Program.

   Effective Date Note: At  84 FR 54979 , Oct. 11, 2019, § 54.622 was
   revised. However, 54.622(d), (e)(2), (e)(4) and (e)(5) contain
   information collection and recordkeeping requirements and will not
   become effective until approval has been given by the Office of
   Management and Budget.

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Goto Year: 2019 | 2021
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