Government lawyers on my side

Man, I love the latest appeal from the Bureau of Indian Education (BIE)! They made two arguments that I would love to see them win.

First, they said that other government procurement processes, even if they differ from the FCC process, should satisfy the "competition" requirement. The BIE is talking about federal rules, but imagine if the FCC said following federal or state public contract law satisfied the competition requirement. Suddenly, only private schools would have to file a Form 470, since public schools and libraries already follow state public contract laws.

The other argument is one that could make it more difficult for USAC to COMAD. Apparently, in the absence of evidence to the contrary, it should be assumed that public officials acted conscientiously. (I know the idea of assuming that public officials are conscientious just made some of you blow your morning coffee out through your nose, but that's what the law says, according to the BIE.)

The FCC has been approaching this point of view, for example when they remanded the "pattern analysis" denials, but this idea opens up a new line of defense against COMADs. Up until August 13, 2004, when the Fifth Report & Order was released, the only records that applicants were required to keep were records they would normally keep. So USAC shouldn't be able to COMAD any application before that date, unless the applicant happened to keep records that demonstrate that officials broke the rules.

Let's take this further: while the Fifth Report & Order listed many documents that must be retained, it didn't actually say that all those documents must be created. For example, all RFPs must be retained, but RFPs do not have to be created. So if an applicant didn't create a bid evaluation worksheet, can they say there is no evidence that officials were not conscientious, so USAC must presume that they selected the most cost-effective vendor, with price as the primary factor?

As I see it, the FCC has two choices: either scrap the 470 process, or come up with a real set of procurement rules, like the Federal Acquisition Regulation (FAR), which is about 1900 pages long. Currently, the FCC is making up the rules one appeal case at a time, which benefits no one.

In any case, it sure feels good to have government lawyers making these arguments.

New wave

Is it just me, or has PIA been drinking too much coffee? I've just been getting swarmed with new requrests this week. I'd guess that maybe a fifth of all our applications went into review this week. Maybe it's just the luck of the draw.

That's what I said!

I got my paper copy of eSchoolNews and reread the special report that I talked about earlier. This time I saw support for two things I've been saying for years.

First, only about a quarter of respondents thought the 2-in-5 rule was effective. You know I hate the 2-in-5 rule. At first, I was please that so many recognized its ineffectiveness. Then I started thinking: how could anyone think it's been effective? Show me some effect that it's had. (Besides perhaps inadvertently forcing a tiny but positive rule change on cabling.)

Second, the #1 change that applicants would like to see is a simplified application for Priority 1 services. Now how can we channel that into some kind of campaign? First, we need a catchy name: 471EZ? PIA Lite? The "Same As Last Year" Button?

Monster mash

If the two-signature/two-date rule was Jason, and COMADs call to mind NOMAD, then what is the Cost-Effectiveness Review (CER)? I recently compared it to Frankenstein's monster, but now it has reached a new level of evil.

I just picked up a new client, and right off the bat, I'm hit with a CER. Only it's for a 2005-2006 FRN for which disbursements are complete. So the client may be looking at a COMAD. It's like Frankenstein's monster and NOMAD working together. And they have a time machine.

Audits for us all!

The FCC's Office of the Inspector General (OIG) has released another semi-annual report. It didn't seem like as good a read as before, although the Judy Green investigation was interesting reading on a consultant gone bad. She got 7.5 years in prison!

One thing the report does make clear is why so many FCC OIG audits are being launched this year. The Improper Payments Information Act (IPIA) apparently requires more auditing if initial audits find more than 2.5% of payments (and at least $10 million) were improper. The E-Rate comes in at 12.9% of payments made improperly. So apparently IPIA has some formula that gets used to determine the new amount of audits, so the OIG will be doing 260 audits this year.

At what cost? Well, the audit I was involved in seemed to provide full employment for 3 auditors for at least 4 weeks (and it was not a big or complicated audit), so let's just use 12 person-weeks per audit. Multiply that by 260, and you get 3,120 person-weeks. Divide that by 52 weeks/year, and you get the equivalent of 60 full-time people. How much would a person like that cost as a contractor (salary+benefits)? $60,000? That's $3.6 million in audits.

Still, the OIG projects an improper payment amount of $210 million, so maybe that's a reasonable cost.

Will the new round of audits bring the program under the IPIA's 2.5% threshold? No way. This program is so complex, and so many of the rules are hidden, that there is no way the percentage of improper payments is going to get anywhere near that low. So what happens when 260 audits also find that the E-Rate is "at risk"? More audits?

So what can we do to cut the amount of improper payments? Simplify the rules. I would bet that 90% of the audit findings (and most of the program fraud, too) come from applicants not understanding the rules. If applicants knew how to follow the rules, they would.

How do we start? Put all the rules in one book, and make that book available to applicants. Once all the rules were in one place, it would be obvious that it was an embarassing amount of rules to have for a program that is mostly giving public entities a few thousand dollars off their phone bill. And it would become more apparent where the rules are contradictory and where the rules don't make clear what should be done. And the rules could be approved by the FCC, so there would be no applicant claims that USAC gave them incorrect information. And it would be clear to auditors later what set of rules should be used.

If only I could find the time, I would start compiling The Book myself. Alas, I have applications to work on.

Look! Up in the sky!

This new appeal made me smile: the Metropolis Public Library missed a 471 deadline. What, they couldn't get Superman to reverse the spin of the Earth and rewind time like he did in the movie? Or perhaps Clark Kent is not a regular library visitor.

Opportunity knocks

A new survey report has been released by eSchoolNews and Funds for Learning. It's worth a read, though most of it is about what you'd expect. Here are some things that jumped out at me:

First, the opening story is a library director getting fired for making a simple mistake on the application.

"The average applicant spends 21 hours a month managing the E-rate process." There is no way this little program should take so much time for most applicants.

"More than 2 in 5 respondents (43 percent) have experienced some type of program audit." Is this the most audited funding program in the world or what? And really, PIA is sort of an audit, so in my book, 100% of applications are audited.

Only 18% of applicants use a consultant. I know it's higher in NJ, but it's not always possible to tell which applicants are using a consultant.

It makes me want to crank up the marketing machine. If I promise to take the bullet for any mistakes, free up 252 hours of staff time each year and handle all audits, I ought to be able to pick up the 82% of applicants not currently using a consultant.