FCC awards $40M to Universal Service Administrative Company for Emergency Connectivity Fund administrative support

Contract Overview

Contract Amount: $40,153,487 ($40.2M)

Contractor: Universal Service Administrative Company

Awarding Agency: Federal Communications Commission

Start Date: 2021-04-28

End Date: 2023-04-27

Contract Duration: 729 days

Daily Burn Rate: $55.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: USAC EMERGENCY CONNECTIVITY FUND

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20005

State: District of Columbia Government Spending

Plain-Language Summary

Federal Communications Commission obligated $40.2 million to UNIVERSAL SERVICE ADMINISTRATIVE COMPANY for work described as: USAC EMERGENCY CONNECTIVITY FUND Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Administrative support services are crucial for the effective distribution of the Emergency Connectivity Fund. 3. The contract duration of 729 days suggests a significant, ongoing need for these services. 4. The fixed-price contract type provides cost certainty for the government. 5. The awardee, Universal Service Administrative Company, is a key entity in managing universal service programs. 6. No small business set-aside was applied to this contract.

Value Assessment

Rating: fair

The contract value of approximately $40 million for administrative support services over two years appears reasonable given the scope of the Emergency Connectivity Fund. However, without a competitive bidding process, it is difficult to benchmark the value for money definitively. The awardee's established role in managing similar programs suggests operational efficiency, but the lack of competition prevents a direct comparison of pricing against market alternatives. Further analysis would require understanding the specific tasks and deliverables included in the administrative support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis to the Universal Service Administrative Company (USAC). This approach was likely taken due to USAC's unique position and expertise in administering federal universal service programs, including the Emergency Connectivity Fund. While this ensures continuity and leverages existing infrastructure, it bypasses the opportunity for competitive bidding, which could potentially lead to lower prices or more innovative solutions from other qualified vendors.

Taxpayer Impact: The sole-source nature of this award means taxpayers may not benefit from the cost savings that could arise from a competitive procurement process. The government relied on the established capabilities of USAC rather than exploring potentially more cost-effective options.

Public Impact

The primary beneficiaries are the students, households, and schools receiving support through the Emergency Connectivity Fund, as USAC's administrative services facilitate the program's operations. Services delivered include program management, application processing, disbursement, and reporting for the Emergency Connectivity Fund. The geographic impact is nationwide, supporting broadband access for eligible entities across the United States. Workforce implications include the continued employment of personnel at USAC dedicated to managing this significant federal program.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award limits opportunities for new entrants and innovative solutions.
Dependence on a single entity for critical administrative functions poses a potential risk if performance falters.

Positive Signals

Awardee has established expertise in administering similar federal programs.
Contract provides continuity for a critical program aimed at bridging the digital divide.
Fixed-price contract offers cost predictability for the government.

Sector Analysis

The Emergency Connectivity Fund (ECF) operates within the broader telecommunications and technology sector, specifically focusing on broadband deployment and digital equity initiatives. This contract for administrative support is essential for the operational success of the ECF, which aims to provide internet access and connected devices to eligible households and institutions. The market for administrative support services in the federal government is vast, but contracts directly tied to specific, large-scale federal programs like the ECF are often awarded to entities with specialized knowledge and existing infrastructure, such as USAC.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for small businesses based on the information provided. The award to USAC, a large administrative organization, suggests that the primary focus was on leveraging existing capabilities rather than promoting small business participation through this specific procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Federal Communications Commission (FCC), the awarding agency. As a sole-source award, the oversight would focus on ensuring USAC meets the performance requirements and deliverables outlined in the contract. Transparency is facilitated through public contract databases, but the lack of competitive proposals limits the scope of public scrutiny regarding pricing and alternative solutions. Inspector General jurisdiction would apply if any issues of fraud, waste, or abuse arise.

Related Government Programs

Emergency Connectivity Fund
Universal Service Fund Programs
Broadband Deployment Initiatives
Digital Equity Programs

Risk Flags

Sole-source award limits price competition.
Potential for performance issues without competitive pressure.
Dependence on a single contractor for critical functions.

Frequently Asked Questions

What is this federal contract paying for?

Federal Communications Commission awarded $40.2 million to UNIVERSAL SERVICE ADMINISTRATIVE COMPANY. USAC EMERGENCY CONNECTIVITY FUND

Who is the contractor on this award?

The obligated recipient is UNIVERSAL SERVICE ADMINISTRATIVE COMPANY.

Which agency awarded this contract?

Awarding agency: Federal Communications Commission (Federal Communications Commission).

What is the total obligated amount?

The obligated amount is $40.2 million.

What is the period of performance?

Start: 2021-04-28. End: 2023-04-27.

What specific administrative tasks are encompassed by this $40 million contract for the Emergency Connectivity Fund?

The contract with Universal Service Administrative Company (USAC) for the Emergency Connectivity Fund likely covers a broad range of administrative functions essential for the program's operation. These typically include processing applications from eligible households, schools, and libraries; verifying eligibility; managing the disbursement of funds and reimbursements; maintaining program records; providing customer support to applicants and participants; and generating reports for the Federal Communications Commission (FCC) and other stakeholders. Given the scale of the ECF, which aims to connect millions of students and households, these administrative duties are substantial and require robust systems and experienced personnel, justifying the significant contract value.

How does the sole-source nature of this award impact the potential value for money compared to a competitive process?

A sole-source award, by definition, bypasses the competitive bidding process. In a competitive procurement, multiple vendors would submit proposals, allowing the government to compare pricing, technical solutions, and past performance, thereby driving down costs and potentially fostering innovation. When a contract is awarded sole-source, the government relies on the incumbent or uniquely qualified provider, often USAC in this context due to its established role in universal service administration. While this can ensure continuity and leverage existing expertise, it removes the downward pressure on price that competition provides. Therefore, it is inherently more challenging to ascertain if the 'best value' was achieved for taxpayers without a comparative benchmark from other potential bidders.

What is the track record of Universal Service Administrative Company (USAC) in managing large-scale federal programs?

Universal Service Administrative Company (USAC) has a long-standing track record of administering federal universal service programs, including the High Cost Program, Lifeline, and the Schools and Libraries Program (E-Rate). These programs involve managing billions of dollars annually and processing a high volume of applications and disbursements. USAC's experience in these complex, regulated environments suggests a high degree of operational capability and familiarity with the intricacies of federal funding distribution and compliance. Their established infrastructure and expertise are likely key reasons for their sole-source selection for the Emergency Connectivity Fund, indicating a generally reliable performance history in managing similar large-scale initiatives.

Are there any specific performance risks associated with this sole-source contract for administrative support?

The primary performance risk associated with this sole-source contract lies in the potential for complacency or inefficiency due to the lack of competitive pressure. While USAC has a strong track record, any large administrative entity can face challenges. Specific risks could include delays in application processing or fund disbursement, errors in eligibility verification, inadequate customer support, or cybersecurity vulnerabilities within their systems. Furthermore, if USAC's performance were to significantly degrade, the government would face considerable difficulty in finding and transitioning to an alternative administrative provider quickly, given the specialized nature of the ECF and USAC's established role. Robust oversight by the FCC is crucial to mitigate these risks.

How does this contract align with the overall goals of the Emergency Connectivity Fund?

This contract is fundamentally aligned with the core goals of the Emergency Connectivity Fund (ECF). The ECF's objective is to provide affordable broadband internet access and connected devices to students, schools, libraries, and households lacking adequate access, thereby bridging the digital divide. The administrative support provided by USAC under this contract is the operational backbone that enables the ECF to function. By efficiently processing applications, managing disbursements, and ensuring program compliance, USAC's services directly facilitate the delivery of these critical resources to the intended beneficiaries, making the contract essential for achieving the program's overarching mission.

What are the historical spending patterns for administrative support of similar federal broadband or connectivity programs?

Historical spending on administrative support for federal broadband and connectivity programs can vary significantly based on program scale, complexity, and duration. For instance, the FCC's E-Rate program, which USAC also administers, has historically incurred administrative costs that represent a small percentage of the total program funds disbursed annually. While specific figures for comparable sole-source administrative contracts are not readily available in the public domain, the administrative costs for large, federally funded programs typically range from 1% to 10% of the total program budget, depending on the nature of the services. The $40 million award for the ECF, relative to its total funding, appears to fall within a reasonable range for comprehensive administrative management, though direct comparisons are limited by the unique nature of each program and procurement method.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: National Exchange Carrier Association Inc

Address: 700 12TH ST STE 900, WASHINGTON, DC, 20005

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $40,153,487

Exercised Options: $40,153,487

Current Obligation: $40,153,487

Actual Outlays: $40,153,487

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline