Frequently Asked Questions About Selective Review
The Selective Review process in detail - taken from E-rate Central newsletter, April 17, 2006.
- What is Selective Review?
- Who Gets a Selective Review?
- What Are Critical Issues In Responding?
- What Documentation Is Needed?
What is Selective Review?
A Selective Review ("SR") is special review designed to deal, in depth, with specific applicant issues. In particular, the basic SR focuses on the applicant's:
- Technology plan
- Competitive bidding process (including bid assessments and contracts) o Availability of budgeted funds to pay the non-discounted portion of the funding requests and to support other technology resources (professional development, workstations and application software, maintenance, electrical capacity, etc.)
The SR process begins when the applicant is e-mailed or faxed a Selective Review Information Request ("SRIR") document. This year's SRIR is nine pages long. It contains SR instructions, requests for additional applicant documentation, and several pages that must be completed and faxed back. A sample copy of the current form is available at http://www.universalservice.org/_res/documents/sl/pdf/selective-reviews/srir-sample.pdf?WT.mc_id=sl-newsbrief-20060407
Unlike a regular Program Integrity Assurance ("PIA") review, a SR is conducted by a special Selective Review Team. It spans all applications submitted in the funding year by a Billed Entity. Because a SR is a time-consuming process, even if an applicant "passes", FCDL(s) are likely to be delayed. Also, keep in mind that whether or not applications go through the SR process, they also have to go through the PIA process.
Who Gets a Selective Review?
As with many internal procedures, the SLD does not discuss the criteria for triggering a Selective Review. Some SRs are apparently random, heavily weighted by application size. Any large applicant who has not already had at least one SR should assume that they will get one sometime in the future.
Increasingly, however, applicants appear to be targeted for SRs either because of earlier problems of their own making, or more likely because their applications include FRNs associated with certain vendors which have been flagged by the SLD as potentially problematic. The SLD does not publicly identify vendors which have been flagged, but the probable cause of a SR can sometimes be determined using the SLD Data Retrieval Tool ("DRT"). The trick is to search by SPIN to determine if other entities using a particular vendor are also having trouble getting their applications approved. Any applicant associated with a flagged vendor should pay particular attention to the SR's competitive bidding questions.
Changing vendors or canceling affected FRNs is generally not a successful strategy for avoiding this type of problem.
One certain way to get selected for a SR is to have "failed" a SR the previous year. We have seen a few applicants who, discouraged by the scope of additional work required by the SR process, canceled their entire applications for that funding year in hopes of avoiding a SR the following year. This too is normally not a successful strategy.
What Are Critical Issues In Responding?
The most important aspect of responding to a SR is to realize that it is a serious process. Although we have seen no official figures, SR failure rates are rumored to be as high as 45%. We urge Selective Review applicants to read the SR instructions carefully and to answer all questions in a thorough and timely manner. It is also worth reading the SLD's recent News Brief discussing Selective Reviews. (See the link below)
http://www.universalservice.org/_res/documents/sl/html/SL-newsbrief-20060407.aspx
Here are some critical issues to consider when responding to a Selective Review - as well as a couple of editorial comments on the process:
- Unlike a regular PIA inquiry, which requests a response within seven days, the response period for a SR inquiry is thirty days. This is not just to be nice; it's because the more complex nature of a Selective Review requires a lot of work. As with most SLD inquiries, extensions can be requested and granted, but it is important to show meaningful progress. Editorial comment: The thirty day response period is a welcome change to this year's SR process, but we can't help noting that its benefit was partially neutralized by PIA's insistence on initiating a number of reviews just prior to many schools' April vacation week. This effectively reduced the response period by 25% or more.
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Also unlike a regular PIA inquiry, where an incomplete response will often result in a renewed query for more information, the SRIR form contains an explicit first page warning stating in part:
"USAC encourages you to provide full and complete responses. A non-response to any of the questions asked will be interpreted to mean that you had no information to provide on the question. A partial answer will be viewed as being all of the information that you have on the subject.
When your response is received, USAC will complete the Selective Review based on the information on hand."
What Documentation Is Needed?
- The SRIR requires a copy of the applicant's technology plan. It is important to remember the following:
- At a minimum, the plan should cover the entire 2006-2007 funding year.
- The plan should have been prepared before the applicant's Form 470(s) was filed for FY 2006 and it should cover all services included in the applicant's Form 471(s).
- If the SR process extends beyond July 1, 2006, it will be important to be able to demonstrate that the plan has been formally approved.
- Requested budget information must be closely aligned with the technology plan. The applicant must be able to show that it has adequate funds to pay for all technology resources, not just to pay the non-discounted portion of its E-rate requests. It is not enough to simply show that technology expenses have been budgeted; the applicant must show specific revenues to pay these expenses.
- As indicated above, documentation of a fair and open competitive procurement process is critical. It is important to remember the following:
- If formal requests for proposals ("RFPs") were used, copies must be provided.
- The RFP(s) must have been referenced in the applicant's Form 470(s) and must have been available for at least 28 days.
- Copies of all bids - winning and losing - received must be provided. If more than one bid was received for any service, the applicant must be able to document why a particular vendor was selected and that price was the most important factor. Ideally, this documentation would include some form of bid assessment matrix (see, for example, http://e-ratecentral.com/applicationTips/bidAssessment/CompetitiveBidResponseDocumentation.asp).
- This year's SRIR asks the applicant to provide "...a copy of all correspondence between your entity and any service providers or consultants regarding the competitive bidding process and the application process."
Remember that any material sent to the SLD will be reviewed and may generate additional questions.
Note also that the SRIR requires copies, properly signed and dated, of any consulting agreements (including Letters of Agency) "...relating to the planning, implementation, and support of your E-rate funding request(s)." It is not clear what the SLD means by "all" correspondence. It could be meant to include e-mails, faxes, RFP drafts, cover letter, etc - essentially everything in an applicant's E-rate files.
There have been recent SLD denials apparently based on an applicant's failure to have a consultant contract in place prior to the start of the consultant's work. Such a requirement appears to be based on an aggressive interpretation of the FCC's record retention rule illustrations in the Fifth Order, rather than on any real rule requiring consultant contracts.
Deadline to File E-Rate Form 470
