SUNYNet Technology Services

SUNYNet Local Loop Spending

Memo to Campus SUNYNet Contacts from Ted Phelps

October 22nd, 2002 Memo to Campus SUNYNet Contacts from Ted Phelps regarding a Warning on Local Loop Spending Limits for campuses who have, or plan to have, a DS3 or multiple T1s to AT&T Internet Service.

Procurement Suggestion
Keep track of how much you are spending with AT&T on your access lines so that it doesn't exceed the legal annual limits. If it goes over the limit, auditing authorities (for State-operated campuses it is New York State Office of the State Comptroller) may stop payments to AT&T until you demonstrate the proper competitive selection process for your level of payments. Stopped payment is a serious problem with many ramifications, including disruptions in Internet service. There are several ways to avoid this and we can help you work through the issues. See Offer to Help, below.

Details
State-operated campuses and Community Colleges have procurement guidelines that allow purchases without contracts or competitive bids, as long as the annual expenditures from the campus to a given vendor do not exceed certain thresholds. AT&T Internet service consists of two parts: 1) the Internet services themselves, and 2) the access lines (e.g. T1s) from campus to AT&T's Internet point-of-presence.

If the Internet services (#1, above) are purchased through the State contract, they are not subject to purchasing thresholds and are not of concern here. Access lines leased through AT&T (#2, above) are not on contract and therefore are subject to procurement thresholds. The highest threshold we know of under which a campus may make a purchase without bidding is $30,000, but some campuses may have lower thresholds .This figure represents the amount spent by a campus within a fiscal year with one vendor without a bidding process.

Most of SUNYNet ISP customers are safely below $30,000, but we do not know what the limits are for each campus. Each campus is responsible for projecting when its threshold will be reached and determining its own proper procurement procedures. There is a State contract for local access lines, but it is with Verizon, not AT&T. We all may use this contract if we need to or wish to, but it has not been preferred. When we order access lines from AT&T, AT&T subcontracts with local companies such as Verizon and Citizens, AT&T coordinates the installation, and that makes the installation much smoother and less expensive. Also, the recurring charges for AT&T access lines (at least those ordered through SUNYNet) are much lower than the State Verizon contract. So, SUNYNet and nearly all other campuses and agencies have been getting their lines directly through AT&T. AT&T tells us that 98% of its Internet Service customers in NY have chosen to do it this way.

Offer to Help
SUNYNet Technology Services wants to help campuses work through this procurement threshold issue. We would be happy to facilitate a working group with a few campuses to design templates for doing competitive selection processes, such as a) three quotes, b) five sealed bids, c) RFP. This work might be turned into a SUNY-wide contract at some point. We are also working with the State on other alternatives. If you want to work with us, let me know.

Ted Phelps

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|| Theodore K. Phelps
|| Director of Network Planning and Development
|| SUNY System Administration
|| N307 University Plaza
|| Albany, New York 12246
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|| 518-443-5596 FAX: 518-443-5799
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