INTERNAL CONNECTIONS

The FCC Form 470 that established the competitive bidding process for this FRN was filed by the Texas Department of Information Resources (Texas DIR). Texas DIR is participating in the program as an applicant, BEN 16032565, and as a service provider, SPIN 143005581. A conflict of interest is created when the same entity participates in the program both as a service provider as well as an applicant. The program's competitive bidding requirements are violated when a service provider participates in that bidding process, as is the case here. Specifically, Texas DIR posted the FCC Form 470, accepted bids and negotiated the contracts for this competitive bidding process. A limited exception exists for Educational Service Agencies (ESA) if they are able to demonstrate certain separation of applicant and service provider functions. ESAs are designated by state law, and the Texas Educational Agency, has stated that Texas law defines Texas DIR as a state agency but not as an ESA. Therefore, the Texas DIR does not qualify for this limited exception and can only participate in the program as either an applicant or a Service Provider but not both. Since Texas DIR is not an ESA, Texas DIR will be considered a service provider. The FRN is in violation of the program's competitive bidding requirements as the service provider filed the FCC Form 470 that established the competitive bidding for the services sought. Therefore, funding is denied.