USAC Issues Updated SPIN Change Guidance

In its January 27, 2012 News Brief, USAC provides updated guidance regarding Operational Service Provider Identification Number (SPIN) changes. The SPIN change updates in the News Brief reflect regulatory changes made by the FCC in the Sixth Report and Order, which was published in September 2010. The USAC News Brief (and Operational SPIN change area on the USAC website) lists five criteria which must be satisfied for SPIN changes to be compliant with E-rate rules:

1. the SPIN change is allowed under the applicant’s state and local procurement rules;
2. the SPIN change is allowable under the terms of any contract between the applicant and its original service provider;
3. the applicant has notified its original service provider of its intent to change service providers;
4. there is a legitimate reason to change providers (e.g., breach of contract or the service provider is unable to perform the requested service); and
5. the newly selected service provider received the next highest point value in the original bid evaluation. If the applicant did not receive multiple bids, the applicant must submit a statement explaining that it received only one or no bids.

Requirements (4) and (5) were put in place by the Sixth Report and Order, and are applicable to Operational SPIN change requests submitted for any applications from Funding Year 2011 and forward. USAC’s guidance goes on to state:

Changing service providers because the services are available at a lower cost from another provider or because you now wish to do business with a provider that did not originally participate in the competitive bidding process are not considered legitimate reasons for change, and requests citing such reasons will be denied.

The News Brief also provides additional information about the SPIN change request review process, including questions that must be answered by the applicant and information that will be required:

You must answer the following questions and provide an explanation if you answer "No" to any of them.

• • Are all SPIN changes requested in this letter allowed under all applicable state and local procurement rules? (Yes or No)
  • Are the SPIN changes allowable under the terms of the contract, if any, between the applicant and its original service provider? (Yes or No)
  • Have you notified your original service provider of your intent to change service providers? (Yes or No) If your service provider is no longer in business, have you attempted to contact them? (Yes or No)

Beginning with FY2011 FRNs, you must also provide the following two items:

• • A detailed explanation of the need for the change.
  • The final bid evaluation worksheet (a listing of the bid weighting factors and individual vendors' scores for all vendors that participated in the original competitive bidding process) for the services requested in FRN(s) associated with the SPIN change or, if applicable, a statement that there was only one or no bids received.