Category 2 Bidding Requirements/Options for PA Public Schools

November 29, 2022

Category: Category 2 Eligibility & Form 470-Bidding Guide – Public Schools FY 2023

Category 2 E-rate funding covers the equipment and related services that transport data within schools and libraries, subject to a 5-year budget cap.  The Category 2 competitive bidding rules/requirements for PA public schools are somewhat complex because there are state-specific laws in addition to E-rate rules that must be followed.  The following message outlines the options and requirements for PA public schools (as I understand them) and hopefully provides you with a step-by-step path to ensure your E-rate success.  Attached is a Category 2 Eligibility and Bidding Guide for Public Schools that provides complete details and step-by-step screenshots showing how to complete the Form 470 and PEPPM mini-bid screenshots.

Reminder: Cannot Issue PEPPM Mini-Bids Until Early January

— If you intend to use the PEPPM Mini-bid system as the procurement vehicle for your FY 2023 Category 2 equipment purchases, note that you cannot release the PEPPM mini-bid to vendors until at least January 2, 2023.  The reason is that the current PEPPM contract expires at the end of 2022 and the next contract will not become available for use until January 2, 2023.  Thus, no mini-bids can be issued to (what will be) the newly awarded vendors until at least that date.  I will send the new vendor list in a few weeks, along with the PEPPM Mini-Bid Guide.  In the meantime, please begin preparing your equipment lists so you can hit the ground running in January.

Category 2 Budgets:  What’s Remaining for Your School/Library

– FY 2023 will be the 3rd year of the current 5-year Category 2 budget which spans FY 2021 – FY 2025.   C2 budgets are calculated based on the C2 multiplier ($167/student for schools and $4.50/sq ft for libraries – or a minimum of $25,000/building) and the Category 2 enrollment or library square footage that’s currently in EPC.  The school enrollment or library square footage figure used for C2 budgets can be different from the enrollment used for discount calculations!  Schools can use the same C2 enrollment for the entire budget cycle or modify it if enrollment has increased to take advantage of the higher C2 budget.   To see what your remaining C2 budget is for FY 2023 – FY 2025 (as of 11/8/2022), see:  https://e-ratepa.org/wp-content/uploads/2014/03/Remaining-C2-Budgets-as-of-Nov-8-2022.xlsx.  If you update your C2 enrollment in EPC, the C2 budget will change and the results can be found on USAC’s C2 Budget Data Tool at: https://opendata.usac.org/E-rate/E-Rate-C2-Budget-Tool-FY2021-/8z69-hkn7.  Simply use the filter on the right side of the page.

General C2 Bidding Reminders:  

  1. E-rate rules require applicants that include a specific model number or manufacturer’s name to also include the words “or equivalent” on their Form 470 and RFP/PEPPM mini-bid documents and then evaluate equivalent products that are bid.  Applicants may state that such equipment must be compatible and interoperable with the school/library’s existing equipment (in which case the existing equipment should be identified).
  2. E-rate rules require that any bid disqualification reasons be stated in the State and Local Procurement Requirements of the Form 470/RFP or PEPPM mini-bid documents.  Disqualification reasons must be yes/no (either proposals complied or they did not).
  3. USAC requires applicants to consider all bids received up until the date you conduct your bid evaluation if your Form 470 or RFP/mini-bid don’t list a specific due date.  This is different from previously understood guidance which was that vendors should consider the 28th day after the 470 is posted as the default deadline to submit bids.  Therefore, it is extremely important that you state a deadline for vendors to submit proposals (which, of course, must be on or after the 28-day waiting period).  I suggest the following language:  “Deadline for vendor proposals is [XXXXXXX] at noon.  We reserve the right to reject late-submitted proposals.  Proposals must be e-mailed to the Form 470 contact unless otherwise noted.”
  4. Because USAC requires a full 28-days after vendor questions are answered or new information is provided, I am strongly recommending that applicants provide vendors with 2 weeks to ask questions, answer those questions within 2 days, and then have the bid due date be 29-days after the questions are answered.  This will ensure full compliance with the E-rate bidding rules.  For example, if you post a Form 470 on December 1, make the deadline for vendor questions be December 15, issue answers to vendor questions (by uploading with the existing Form 470/RFP in EPC) by December 17, then make vendor bids due January 12.
  5. The FCC prohibits the use of Universal Service funding, including E-rate funds, to purchase equipment and services from companies deemed a national security risk.  Be certain that you do not consider any proposals that include either Huawei or ZTE equipment.
  6. E-rate rules prohibit applicants from contacting potential vendors prior to bidding to seek an equipment list.  Service providers are allowed to answer general questions about the products and services they sell in response to applicant inquiries, but they may not prepare any part of a RFP or spec sheet/bill of materials that will be used by the applicant for conducting a competitive bid procurement.
  7. Applicants must have a signed contract for all Category 2 funding requests before the Form 471 is filed.  This can be as simple as a signed vendor quote as long as it contains this information:

— Contract signing date (must be on or before the Form 471 submission date).

— Term of contract (4/1/2023 – 9/30/2023 for equipment purchases).

 — List of equipment/quantities/prices (or services) and installation costs.
— Whether you want the equipment/services to be contingent upon E-rate funding approval.

Beginning in FY 2022, the Category 2 Form 470 changed slightly.   In addition to having the three C2 subcategories be description-based, the C2 Form 470 added a basic maintenance (BMIC) checkbox on the Internal Connections service request page so applicants aren’t required to post a separate BMIC service request.  However, for applicants seeking BMIC services for separate procurements (perhaps for existing equipment), the option still exists to create a separate BMIC service request.

Public School Bidding Options:  Public school entities have several bidding options as outlined below.  Please pay careful attention to all of the requirements of each option (in addition to the list of requirements noted above).

Option 1)  File a Form 470 and issue an RFP:  The RFP must be uploaded into the Form 470 as the form is being created, and the procurement must be advertised in at least 2 local newspapers of general circulation once a week for 3 consecutive weeks (done concurrently with the Form 470 bidding period).  On the 29th day after the Form 470 was posted (or later), schools must select the lowest price bid among all qualified proposals (those that met the minimum bid requirements outlined in the RFP).  Under state law, schools are not permitted to consider other bid evaluation criteria besides price. Schools will then contact the winning vendor to obtain a contract document (or final quote with exact quantities) for the District to sign.  (For C2 Equipment/services costing between $11,800 – $21,900, and if no RFP is issued, schools must request written or telephonic price quotations from at least three bidders, in addition the Form 470 bidding process.)

Best Practice Timeline:  Post 470/File RFP by first week of December, conduct your bid evaluation in mid-January, have your board approve the contract at their January or February board meeting(s), and file the Form 471 in early March.

                              OR

Option 2)  Use the PEPPM contract and conduct a ‘PEPPM Mini-Bid’:  Public schools using the PA State PEPPM contract should NOT post a Form 470, but are instead required to conduct a ‘mini-bid’ of all product lines in a specific “Category” and then consider all bids submitted by vendors.  Categories are wireless equipment, switches, routers, firewalls, UPSs, cabling/connectors, racks, and caching servers.  A complete guide to conducting a PEPPM Mini-Bid will be sent to the listserve and posted at www.e-ratepa.org. There is no 28-day mini-bid requirement, but you should give vendors at least 14 calendar days to submit proposals. Using the prices contained in the proposals submitted, schools will then create a bid evaluation to select the successful vendor.  Price of eligible equipment/services must be the most heavily weighted factor, but you may consider other factors such as previous experience with the District, compatibility with existing equipment, references, cost to train or certify staff on new equipment, etc.  Schools will then contact the winning vendor to obtain a contract document (or final quote with exact quantities) for the District to sign.

I do not recommend using the PEPPM Mini-Bid process for structured cabling projects.

Best Practice Timeline:  For FY 2023, applicants must wait until at least January 2, 2023 to issue their mini-bids to vendors.  Then conduct your bid evaluation in late January, have your board approve the contract at their February board meeting(s), and file the Form 471 in early March.  

NOTE:  Prevailing Wage Act:  PA public school entities are required to comply with the Prevailing Wage Act for public works contracts which include ‘construction, reconstruction, demolition, alteration and/or repair work other than maintenance work, done under contract and paid for in whole or in part out of the funds of a public body where the estimated cost of the total project is in excess of $25,000.’  Maintenance work is defined as the repair of existing facilities when the size, type or extent of such facilities is not thereby changed or increased.  In speaking with several knowledgeable school officials, they believe that structured cabling projects costing more than $25,000 would be required to comply with the Prevailing Wage Act.  You will want to check with your school district solicitor to determine if he or she believes the Prevailing Wage Act applies and if so, be sure to obtain a Prevailing Wage Determination from the PA Department of Labor and Industry (http://www.dli.pa.gov/Individuals/Labor-Management-Relations/llc/prevailing-wage/Pages/Prevailing-Wage-App.aspx) and include this requirement and PW Determination in your structured cabling RFP/procurement.  (The federal Davis-Bacon Act does not apply to E-rate funds.)

If you have any questions related to the information contained in this message, please don’t hesitate to contact me at jtschell@comcast.net.

— Julie

Julie Tritt Schell
Pennsylvania E-rate Coordinator
717-730-7133 – o
jtschell@comcast.net
www.e-ratepa.org

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