Questions for RFP - Administrator of the PAUSF
Question No. 1 - The RFP directs potential offerer's (see I-10. Questions &Answers) to check the Commission web site for questions and responses and advises potential offerer's that the responses will be considered as anaddendum and part of the RFP. The Commission web site indicates thatProposals should be submitted in eight copies to you, however the RFP specifies at I-11 the delivery of an original and five copies to you are a prerequisite for consideration, and at I-13 indicated consideration requires the submission by mail of eight copies to the issuing office and no other distribution is to be made by the Offerer. Please clarify and confirm the submission instructions regarding delivery and the number of copies requested in addition to the signed original proposal. Please also indicate if an electronic copy of the proposal is desired.
Answer to Question No. 1:
The original and seven copies should be sent directly to me, Frank Wilmarth, Issuing Officer.
Question No. 2 - Please refer to pages 4 and 29 of the RFP. The Problem Statement provision of the RFP indicates that the Administrator will distribute money from the USF on the first of each month to approximately32 rural telephone carriers. However, the Nature and Scope of the Project provision of the RFP specifies that the Administrator is expected to manage the cash flow of the Fund in a manner such that the monthly payments to the Administrator and to recipient carriers occur on the 28th of each month, and contributions are due on the 15th of each month. Please reconcile the apparent discrepancy regarding the distribution expectations.
Answer to Question No. 2:
Payments into the Fund are due the 15th of each month and payments to recipient carriers and the Administrator are made from the Fund on the 28th of each month to avoid problems in calculating the end of year surplus.
Question No. 3 - The Commission's Order at M-00001337 of November 2005 regarding the 2006 contribution factor and the size of the Fund for 2006 references the Administrator's Annual Report pursuant to 52 Pa.Code Section 63.164 (relating to Commission USF oversight). The Administrator's Report apparently identifies the 2004 average monthly intrastate end-user retail telecommunications revenue upon which the calculations of the 2006 contribution rate and fund size have been made. Please clarify the accrual relationship, if any, between the calculations based on the Administrator's Report, referenced in the Commission Order, and the distributions made in
2006: for example, are distributions made in October 2006 for October 2006 or for some other perhaps prior period.
Answer to Question No. 3:
I believe the payments made in October 2006 are for October 2006. The Fund began in April 2000. First invoices were mailed out March 15, and payments were due April 15, 2000. The tariffs lowering intrastate access charges and intraLATA toll rates were effective April 1, 2000. There is no accrual to my knowledge.
Question No. 4 - Has the Commission initiated a rulemaking docket as designated at page 9 of the Order of July 10, 2003 (entered July 15, 2003) at M-00021596 or other docket which can impact the Pa USF in any way? Please identify any such proceeding and the status of that proceeding.
Answer to Question No. 4:
The Commission has initiated at I-00040105 an Investigation Regarding Intrastate Access Charges and IntraLATA Toll Rates of Rural Carriers and The Pennsylvania Universal Service Fund. Currently, this proceeding has been stayed for one year and there is a currently pending before the Commission a Motion requesting a further 1-year stay or, in the alternative, until the FCC makes a ruling regarding its Unified Intercarrier Compensation proceeding at CC Docket No. 01-92. The Commission is currently scheduled to address this Motion at the Public Meeting or 11/9/06.
Question No. 5 - Have there been any proposed revenue neutral rate changes that require Pa USF funding since December 31, 2004, if so please identify the Commission Orders authorizing the changes?
Answer to Question No. 5:
The most recent rate changes among rural recipient carriers involve the three companies of Denver & Ephrata Telephone and Telegraph Company, Buffalo Valley Telephone Company and Conestoga Telephone and Telegraph Company, Docket No. P-00918430F000, June 23, 2006. The RLECs file annual price stability index/service price index filings annually and sometimes adjust their rates accordingly.
Question No. 6 - Are there any proceedings before the Pa PUC which could result in changed rates, rules or regulations which may impact the operation of the Pa USF, the contribution rate for 2007, or the level of support to be distributed in 2007?
Answer to Question No. 6:
Nothing that will change the contribution factor for next year. The Commission is working with the current USF Administrator, Solix, Inc., to finalize the Administrator's report and draft an order amending the contribution factor for next year (2007).
Question No. 7 - Has any legislation been proposed or enacted which could impact the operation of the Pa USF during the term of the contract identified in the RFP that is not reflected in the published regulations?
Answer to Question No. 7:
There is pending federal legislation designed to change the existing federal USF funding. The bill is called the Universal Service Reform Act of 2006 (HR 5072). Another comprehensive legislative telecommunications reform initiative (HR 5252) also contains stabilization provisions for federal universal service funding purposes. Our PaUSF is potentially impacted by any federal legislation that preempts state authority over the establishment of intrastate access charges.
Question No. 8 - How may R&S as a potential responder to the RFP gain access to copies of:
(1) the most recent Administrators Annual Report to the Commission;
(2) the most recent balance sheet, income statement, and sources and uses of funds statements corresponding to the latest monthly report to the Commission;
(3) the most recent auditors report;
(4) the most recent aging reports (receivables & payables) corresponding to the latest monthly report to the Commission;
(5) a copy of a sample notice of delinquency;
(6) a copy of the log of notices of delinquency issued by the Administrator for calendar 2006;
(7) copies of each of the monthly reports of fund activity from the Administrator to the Commission for 2006 detailing carrier assessments, delinquent payers, late payment charges (if applicable), fund disbursements, interest earned, and cumulative results;
(8) a copy of the general ledger for 2006 through the latest monthly report to the Commission;
(9) a copy of the chart of accounts; and
(10) copies of any additional reports that may have been requested by the Commission for or during 2006.
Answer to Question No. 8:
Some of the reports and ledgers requested contain confidential information that is sensitive to the carriers -- especially with regard to their individual annual revenues. The Auditor's report, Administrator's report and financials are public and are posted on our website at . However, the monthly reports to the Commission from the Administrator contain confidential information and are not available to potential offerors.
Question No. 9 - Although we do not anticipate the need to inspect the statements of any financial institutions used by the current administrator for purposes of responding to the RFP, we request the Commission's assurance of assistance and cooperation in (a) securing prompt and timely access to banking, investment and daily lock box statements; (b) the provision of all of the above reports for 2006 not previously made available, to include all reports and supporting documentation through the term of the current administrator; as well as (c) each carrier's account financial transaction history (detailed statements of account) to include at least all of 2005 and 2006 activity, if the contract is awarded to R&S.
The support of the Commission, as necessary, can significantly reduce the necessity of a contract extension if the Commission is otherwise prepared to make a prompt determination regarding the award of a contract, prior to the expiration of the current contract. R&S is generally familiar with the administrative practices of Solix and has successfully transitioned other state programs (Vermont, Arkansas and Maine) from Solix to R&S. R&S will be prepared to assume the duties of the administrator on short notice.
Answer to Question No. 9:
Currently, Fund monies are held in two financial instruments, a money market fund at Mellon Bank of PittsburghPA, and Merrill Lynch Premier Institutional Fund, Boston, MA.
Question No. 10 -RFP Section I-6 (p.5) states, "it is proposed that if the Issuing Office enters into a contract as a result of this RFP, it will be a firm fixed price contract, whereas RFP Section III-4(c) refers to "fixed and variable prices" contained in the bid. Please resolve this apparent inconsistency and explain which components of the price proposal - if any - may be stated as variably priced.
Answer to Question No. 10:
Through this answer we amend the RFPso as to remove the sentence that reads as follows: "It is proposed that if the Issuing Office enters into a contract as a result of this RFP, it will be a firm fixed price contract."
We expect thata fixed flat monthlyAdministrator's amount will be charged the fund each month. Thischarge canbe adjusted annually. We expect paymentto be made on the 28th of each month. This amount should cover expenses for routine monthly reports to the Commission, the annual Administrator's report due September 1st of each year, the mailings of invoices to carriers, revenue/access line growth surveys to carriers, and notice-of-delinquency letters to carriers when carriers are 30 and 60 days late in payments. The monthly fee should cover one trip annually to the PUC, Harrisburg, PA and the time and materials required to support one external audit each year. Theamount should coverat least one reassessment of carriers per year.It is up to the Offeror to explain in detail what the monthly amountcovers. The Offeror may want to go into more detail and should follow the Administrator's Duties under part IV of the RFP.
Variable prices may be a part of the proposal. This is up to the Offeror. Examples of variable costsare in-person participation at a PUC proceeding, court activity associated with the duties of the Administrator, participation in lawsuits or collection proceedings beyond the letter notices of delinquency to carriers or auditing of a carrier's financial records and reports. These additional costs, which are not anticipated, but may arise, could be billed at a variable or fixed rate depending upon the preference of the Offeror.
Question No. 11 -RFP Section II-9 (p.21) directs Offerors to specify how compensation will be proportionally adjusted if the winning Offeror actually begins work after January 1, 2007. Does the PA PUC envision the possibility of a contract term of less than 48 months in the event work begins after January 1, 2007?
Answer to Question No. 11:
Assumingthat work beginsafterJanuary 1, 2007, there would necessarily be a proration to reflect the fact that theexisting contractoris continuing to operate the fund under the 3-month extension provision in the current administrator's contract. In the event of such occurrence, we would anticipate negotiating with the new contractor the appropriate prorated amount.
Question No. 12 -RFP Section III-4(a) (p.22) refers to "associates." Please define this term as it relates to this section.
Answer to Question No. 12:
"Associates" is intended to include allentities or personsthat may potentially come before the Commission with which the Offeror has a"more-than-incidental"business relationship. For example, iftheOfferorshares building space, personnel, computers, data, fund monies, etc.,withan affiliate or associated entity that has ties to regulated telecommunications carriers then this relationship must be disclosed fully.Disclosure must fully detail the measures that will be taken to avoid any conflict of interest that may arise with such Associates. For example, assurances that no personnel who representor have an interest in any telecommunications carrier would be privy to any sensitive dataor information that comes from thecarriers or the Commission regarding the administration of the fund, that computer access isrestricted,that account monies are kept separate from other funds,and that safeguard measures such as firewalls have beenconstructed.When in doubt, it is certainly preferable to disclose any potential Associates.
Question No. 13 -(Contract Terms and Conditions, p.1, Item #7) Will the Contractor be authorized by the Commonwealth forEvaluatedReceiptSettlement orVendorSelf-Invoicing? Please describe the Vendor Self-Invoicing and Evaluated Receipt Settlement processes.
Answer to Question No. 13:
Yes. The contractor need not send a monthly invoice itemized by line item to Commission staff unless the amount requested is above the flat monthly amount agreed upon in the contract. The Contractor must note in the monthly report to the Commission the date upon which the Administrator was paid and how much from the PaUSF for the month being reported.
Question No. 14-(Contract Terms and Conditions, p. 2, Item #8)What is the amount of the fee that theContractor would be required to pay should the Commonwealth elect to use a purchasing card?
Answer to Question No. 14:
The Commonwealth will not be paying the vendor. There is no purchasing card. This service contract is not a standard contract in that no Commonwealth monies are being used to compensate the vendor. All compensation is paid from the PaUSF. The PUC oversees the management of the fund to ensure thefund is properly run.
Question No. 15- When does the Commission anticipate awarding the contract for an administrator of the PA USF?
Answer to Question No. 15:
The Commission anticipates the selectionprocess and award-of-contract letter to be finalized before the end of December.
As of Dec. 4, 2006