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Tuesday, September 09, 2008

CER obfuscation

Oh, man, I'm going to have to moderate my caffeine intake on Friday morning so I don't lose my composure during the Cost Effectiveness Review presentation. Here's what the slides say about why CERs are conducted:

FRNs are reviewed to determine:
  • Whether the costs of the products and services are significantly higher than the costs generally available in the applicant’s marketplace for the same or similar products or services;
  • Whether equipment is priced two or three times greater than the prices available from commercial vendors; and
  • Whether there are extenuating circumstances that warrant the products or services costs.
  • Whether the most cost-effective bid was selected with price of the eligible products or services being the primary factor
  • Whether the applicant used applicant’s evaluation criteria during the vendor selection process
From the CERs I've seen, none of those reasons cause a CER, and from the denials I've seen appeal, CER denials are not for any of the reasons above. The only reason I've seen for starting a CER or for denial after a CER is:
  • Whether the solution proposed by the service provider and accepted by the applicant has a cost/student significantly higher than the norm.

I'm happy to see some light shed on the CER process, but that part of the slide show seems very misleading to me. The FCC's definition of "cost effective" does not include anything about cost/student, so I can understand USAC's reluctance to put it on a slide, but if it's the main reason for CERs, then tell us. Also, following the precedent in the Caldwell Parish order, if USAC puts it in a slide, it becomes a program rule, without any need for FCC approval.

Another gripe: the presentation doesn't have the two pieces of information I requested last year, but never got:

  1. How many CERs are conducted annually?
  2. How many (or what percentage) of CERs result in denial?

The presentation doesn't cover what applicants really need to know, like"what to do when your application is found not to be cost-effective" or "which extenuating circumstances we pay attention to." But if they gave away those answers, there would be one less reason for E-Rate consultants.

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