Sec.  54.511   Ordering services.

   (a) Selecting a provider of eligible services. In selecting a provider of
   eligible services, schools, libraries, library consortia, and consortia
   including any of those entities shall carefully consider all bids submitted
   and must select the most cost-effective service offering. In determining
   which service offering is the most cost-effective, entities may consider
   relevant factors other than the pre-discount prices submitted by providers
   but price should be the primary factor considered.

   (b) Lowest corresponding price. Providers of eligible services shall not
   charge schools, school districts, libraries, library consortia, or consortia
   including any of these entities a price above the lowest corresponding price
   for supported services, unless the Commission, with respect to interstate
   services or the state commission with respect to intrastate services, finds
   that the lowest corresponding price is not compensatory. Promotional rates
   offered by a service provider for a period of more than 90 days must be
   included among the comparable rates upon which the lowest corresponding
   price is determined.

   (c) Existing contracts. (1) A signed contract for services eligible for
   discounts pursuant to this subpart between an eligible school or library as
   defined under  Sec. 54.501 or consortium that includes an eligible school or
   library and a service provider shall be exempt from the requirements set
   forth in  Sec. 54.504(a), (b)(3), and (b)(4) as follows:

   (i)  A  contract  signed on or before July 10, 1997 is exempt from the
   competitive bid requirements for the life of the contract; or

   (ii) A contract signed after July 10, 1997, but before the date on which the
   universal  service  competitive  bid  system  described  in  Sec. 54.504 is
   operational, is exempt from the competitive bid requirements only with
   respect to services that are provided under such contract between January 1,
   1998 and December 31, 1998.

   (2) For a school, library, or consortium that includes an eligible school or
   library that takes service under or pursuant to a master contract, the date
   of execution of that master contract represents the applicable date for
   purposes of determining whether and to what extent the school, library, or
   consortium is exempt from the competitive bid requirements.

   (3) The competitive bid system will be deemed to be operational when the
   Administrator is ready to accept and post FCC Form 470 from schools and
   libraries on a website and that website is available for use by service
   providers.

   (d)(1) The exemption from the competitive bid requirements set forth in
   paragraph (c) of this section shall not apply to voluntary extensions or
   renewals of existing contracts, with the exception that an eligible school
   or library as defined under  Sec. 54.501 or consortium that includes an eligible
   school or library, that filed an application within the 75-day initial
   filing window for 1998 (January 30, 1998–April 15, 1998), may voluntarily
   extend or renew, to a date no later than June 30, 1999, an existing contract
   that otherwise would terminate between April 15, 1998 and June 30, 1999.

   (2) For the 1998–1999 funding year, a contract exempt from the competitive
   bid requirement, as described in paragraph (c) of this section, may be
   voluntarily extended to September 30, 1999 only to the extent necessary to
   permit delivery of the nonrecurring services subject to that contract and
   for which discounts have been approved.

   [ 62 FR 32948 , June 17, 1997, as amended at  63 FR 2130 , Jan. 13, 1998;  63 FR 33586 , June 19, 1998;  63 FR 43097 , Aug. 12, 1998;  63 FR 70572 , Dec. 21,
   1998;  64 FR 22810 , Apr. 28, 1999;  68 FR 36942 , June 20, 2003]