§ 54.642   Competitive bidding requirement and exemptions.

   (a) Competitive bidding requirement. All applicants are required to
   engage in a competitive bidding process for supported services,
   facilities, or equipment consistent with the requirements set forth in
   this subpart, unless they qualify for one or more of the exemptions in
   paragraph (h) of 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 § 54.643.

   (b) Fair and open process. (1) All entities participating in the
   Healthcare Connect Fund must conduct a fair and open competitive
   bidding process, consistent with all applicable requirements.

   (2) Vendors who intend to bid to provide supported services, equipment,
   or facilities to a health care provider may not simultaneously help the
   health care provider choose a winning bid. Any vendor who submits a
   bid, and any individual or entity that has a financial interest in such
   a vendor, is prohibited from:

   (i) Preparing, signing or submitting an applicant's request for
   services;

   (ii) Serving as the Consortium Leader or other point of contact on
   behalf of applicant(s);

   (iii) Being involved in setting bid evaluation criteria; or

   (iv) Participating in the bid evaluation or vendor selection process
   (except in their role as potential vendors).

   (3) All potential bidders must have access to the same information and
   must be treated in the same manner.

   (4) All applicants and vendors must comply with any applicable state,
   Tribal, or local competitive bidding requirements. The competitive
   bidding requirements in this section apply in addition to state,
   Tribal, and local competitive bidding requirements and are not intended
   to preempt such state, Tribal, or local requirements.

   (c) Cost-effective. For purposes of the Healthcare Connect Fund,
   "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.

   (d) Bid evaluation criteria. Applicants must develop weighted
   evaluation criteria (e.g., scoring matrix) that demonstrate how the
   applicant will choose the most "cost-effective" bid before submitting a
   Request for Services. Price must be a primary factor, but need not be
   the only primary factor. A non-price factor can receive an equal weight
   to price, but may not receive a greater weight than price.

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

   (1) Form 461, including certifications. The applicant must provide the
   following certifications as part of the request for services.

   (i) The person signing the application is authorized to submit the
   application on behalf of the applicant and has examined the form and
   all attachments, and to the best of his or her knowledge, information,
   and belief, all statements of fact contained therein are true.

   (ii) The applicant has followed any applicable state, Tribal, or local
   procurement rules.

   (iii) All Healthcare Connect Fund support will be used solely for
   purposes reasonably related to the provision of health care service or
   instruction that the HCP is legally authorized to provide under the law
   of the state in which the services are provided and will not be sold,
   resold, or transferred in consideration for money or any other thing of
   value.

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

   (v) The applicant has reviewed all applicable requirements for the
   program and will comply with those requirements.

   (2) Bid evaluation criteria. Requirements for bid evaluation criteria
   are described in paragraph (d) of this section.

   (3) Declaration of assistance. All applicants must submit a
   "Declaration of Assistance" with their Request for Services. In the
   Declaration of Assistance, applicants must identify each and every
   consultant, vendor, and other outside expert, whether paid or unpaid,
   who aided in the preparation of their applications.

   (4) Request for proposal (if applicable). (i) Any applicant may use a
   request for proposals (RFP). Applicants who use an RFP must submit the
   RFP and any additional relevant bidding information to the
   Administrator with Form 461.

   (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 period during which bids will be accepted.

   (C) An RFP must include the bid evaluation criteria described in
   paragraph (d) of 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 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
   vendors who propose to meet those needs via services provided over
   vendor-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.

   (5) Additional requirements for 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. Consortium applicants must submit letters of
   agency pursuant to § 54.632.

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

   (1) Form 461,

   (2) Bid evaluation criteria,

   (3) Request for proposal, and

   (4) Network plan.

   (g) 28-day waiting period. After posting the documents described in
   paragraph (f) of this section on its Web site, 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 Web site before selecting and committing to
   a vendor.

   (1) Selection of the most "cost-effective" bid and contract
   negotiation. Each applicant subject to competitive bidding 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 listed in § 54.643
   to support their certifications.

   (2) Applicants who plan to request evergreen status under
   § 54.642(h)(4)(ii) 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.

   (h) Exemptions to competitive bidding requirements. (1) Annual
   undiscounted cost of $10,000 or less. An applicant 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.

   (2) 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.

   (3) Master Service Agreements approved under the Pilot Program or
   Healthcare Connect Fund. A eligible health care provider site may opt
   into an existing MSA approved under the Pilot Program or Healthcare
   Connect Fund 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.

   (4) Evergreen contracts. (i) Subject to the provisions in § 54.644, 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.

   (5) 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 Healthcare Connect
   Fund 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 Healthcare
   Connect Fund rules and procedures except for those applicable to
   competitive bidding.

   [ 78 FR 13988 , Mar. 1, 2013, as amended at  79 FR 49203 , Aug. 19, 2014]

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