UNITEDSTATESDEPARTMENTOFCOMMERCE
NationalOceanicAndAtmosphericAdministrationOfficeofAcquisitionandGrants
October26,2011BarbaraGoodsonBTOPAwardAuthorizedOrganizationRepresentativeStateofLouisiana-BoardofRegents1201North3
rd
Street,ClaiborneBuildingBatonRouge,LA70804-9095Re:StateofLouisianaBoardofRegents(Louisiana)(NT]OBIX557(046)-NoticeofTerminationofAwardUponacceptanceofagrantfromtheU.S.DepartmentofCommerce(GrantAwardNo.NT!OBIX5570046),yourorganizationagreedtocomplywithrequirementsspecifiedinthetermsandconditionsoftheaward.OnSeptember20,2011,youwereadvisedofseriousissuesregardingdeficienciesinyourcorrectiveactionplan(CAP)submittedonSeptember9,2011,andthatduetotheseCAPdeficiencies,yourawardwouldbeterminatedin30daysunlessyourorganizationsubmittedarevisedCAPbyOctober14,2011.TheNationalTelecommunicationsandInformationAdministration(NTIA)hasthoroughlyreviewedyourOctober14,20IICAPresponseandhasdeterminedthatyourresponseisdeficientinaddressingourconcernsregardingprojectbenefits,compliancewithschedulecompletion,andprojectsustainability.YourinabilitytoadheretotheapprovedconstructionplanandprojectimplementationscheduledescribedinyourgrantawardandfailuretodevelopaviableandsustainablealternativeinyourOctober14,20IICAPresponsecontinuetoplaceyouinmaterialnoncompliancewiththetermsandconditionsofyouraward.Asaresult,yourawardisterminatedimmediately.
REASONFORTERMINATION:
PriortothisNoticeofTermination,NTIAandtheNationalOceanicandAtmosphericAdministrationGrantsOfficer(NOAA)providedyouwithanumberofopportunitiestotakecorrectiveactionwithrespecttoyourawarddeficiencies.Enclosedis"ChronologyofMajorEventsandMeetings"thatsummarizeseachattempttocorrectthedelaysandotherdeficiencieswithyourproject.NOAAawardedagranttoLouisianaforaprojectthatproposedtoconstructnewtiberinfrastructureforthepurposeofdeliveringhigh-speedbroadbandservicetocommunityanchorinstitutions(CAls),aswellasunservedandunderservedcommunitiesinthestate.Louisiana,however,provedunabletoexecuteitsoriginalprojectproposaltoconstructnewfacilities.DuringNTIA'ssitevisitinMarch20II,staffraisedconcernsthataprojectthatshouldhavebeentwelvemonthsalonginitsimplementationwasalreadyatleastninemonthsbehindschedule.OnMay17,2011,NOAAsentaletterrequestingthatLouisianasubmitaCAPresponsebyJune1,20II,toaddressissueswiththelackofprogressundertheproject,andrequiringspecificinformation,suchasapreliminaryconstructionschedule,toprovideNTIAwithsufficientassurancesthattheprojectcouldbecompletedduringtheperiodofperformance.NTIAandNOAAthoroughlyreviewedyourJune1,2011responseandonJune13,2011,NOAA
respondedstatingthatyourinitialCAPresponsewasinsufficient.Insteadofaddressingourconcernsdirectly,theCAPresponsestatedthatfewermilesthanoriginallyplannedwouldbeconstructedandyouprovidednofurtherdetailonpreciselyonwhattimetabletheconstructionwouldoccur,alludingonlytoaseriesofbidpackagesthatwouldbeimplementedconcurrentlytoaddressthesignificantscheduledelays.Becausetheresponsewasdeemedinsufficient,NOAAandNTIAonceagainrequestedadditionaldetailtoprovideuswithsometypeofassurancethatLouisianacouldmakeuptorthescheduledelays.LouisianaprovidedaresponseonJune14,2011,onceagainindicatingthatatleasttwelverequestsforproposal(RFPs)wouldneedtobereleased,attachingaprojectschedule,andstatingthattheagreed-uponprojectbenetitswouldbecontingentonlast-mileprovidersofferingcompetitiveservicestocommunityanchorinstitutions.OnJuly6,20II,NTIAstaffconductedanadvancedsitevisitwithkeyofficialsfromtheLouisianaBoardofRegents(BOR)andDepartmentofAdministration(DOA)stafftoofferdirectassistancetocurethedeficiencieswiththeimplementationplan,andinthealternativetoascertainwhatenforcementactionmightberequiredtoensuretaxpayerdollarswerenotwastediftheprojectcouldnotcontinue.DuringthesitevisitNTIAstafflearnedofadditionalimpedimentsthreateningtheimplementationoftheproject.OnJuly12,20
II,
NOAAsentanotherlettertoLouisianarequiringspecificinformationbyJuly20,2011inanattempttopreventtheprojectfrombeingsuspendedorterminated.OnJuly20,2011,LouisiananotifiedNTIAthattheprojectengineeringcontractorfailedtomeetthescheduledeadlineanddidnotproducetherequireddeliverables.Alternatively,Louisianathenproposedsignificantmodificationstotheprojecttoexcludetheconstructioncomponentandtomakeupforitsscheduledelaysbypursuinganalternativedesigncenteredonthepurchaseofindefeasiblerights-of-useagreements(IRUs)fromprivateproviders,DuetothetactthatLouisianahadnowabandoneditsoriginalprojectproposalplan,NOAAsuspendedtheU.S.TreasuryAutomatedSystemApplicationforPayment(ASAP)authorizationfortheawardonAugust2,2011andrequiredyourorganizationtosubmitadetailedplandescribingtheviabilityandadequacyoftheproposedIRUapproachbySeptember9,2011.OnFriday,September9,201LNOAAandN'fIAreceivedLouisiana'sCAPresponseentitled"RequestforAlternativeDesign,"requestingpermissiontoreplacethecurrentnetworkdesignoftheproject,whichcalledfortheconstructionofnewfiberinfrastructuretodeliverhigh-speedbroadbandservicetounservedandunderservedareasofthestate,withanapproachcenteredonthepurchaseofexistingfiberinfrastructurethroughIRUarrangementswithprivatebroadbandserviceproviders.However,LouisianadidnotadequatelyaddressthemultipleconcernsraisedbyNOAAandNTIAinpreviouscorrespondence.Specifically,theresponsedidnotprovidesufficientdetail,suchasacomprehensiveimplementationscheduleoranadequatebusinessplan,toevaluatetheproposal.Asaresult,onSeptember20.2011.NOAAissueda30-dayNoticeofTerminationandrequiredyourorganizationtosubmitarevisedCAPbyOctober14,201
I.
NTIAhasthoroughlyreviewedyourOctober14,2011responseandhasrecommendedtoNOAAthatitterminateyourawardimmediately.TheCAPresponseisdeficientinaddressingNTIA'sconcernsregardingthedeliveryofpromisedprojectbenefits,compliancewithschedulecompletion,andprojectsustainability.
NTlA
hasconcludedthatyourresponselacksspecificity
anddetail;contains
information
gapsandincompleteanalyses;andtherefore.isinsufficienttoadequatelyevaluatethetechnicalfeasibilityandfinancialviabilityoftheproposa1.Specifically,theIRUplandoesnotincludemilestonesrelatedtopre-deploymentreadiness,suchasenvironmentalandhistoricpreservationrequirements,majordeploymentactivities,ordetailstosupportanacceleratedtimelineformeetingquarterlykeyperformanceindicatorssuchasmilesdeployed,CAIsconnected,orinterconnectionagreementsnegotiatedorexecutedwithlastmileandotherwholesaleserviceproviders.Inaddition,theCAPresponseoutlinesasolutions-basedprocurementapproachthatleaveskeydeterminantstobeprovidedbyentitiesrespondingtoitsIRURFPandthereforedoesnotprovidethedetailsrequired
lor
NTIAtoevaluatethebenefitstoCAIsnotdirectlyassociatedwiththeLouisianaOpticalNetworkInitiative(LONI).unservedandundcrservedcommunities,
01'
tribalentitiesdefinedintheoriginalgrantaward.Finally,theCAPresponsedoesnotincludeinformationrelatedtothemethodologyusedforrevenueprojectionsrelatedtofiberleases;cashflowanalysis,otherthanincomerelatedtoLONI;businessmodeldetails;andgeneralfinancialsupport.TheCAPresponselacksaclearandreasonablebusinessplananddoesnotaddressviabilityandsustainabilityconcernsraisedbyNTIA.Inaddition,theIRUapproachincludedmultipleRFPprocurementsthatwouldnotbeexecuteduntilFebruary2012,afulltwoyearsintotheawardperiodwhentheprojectisrequiredtobesubstantiallycomplete.Forthesereasons,NTIAdoesnotfindtheproposedIRUapproachtobeanacceptableandviablealternativetoachievetheprojectbenefitsitapprovedwhenmakingtheaward.Furthermore,thepatternofscheduledelays,uncertaintiesandcontingenciesdemonstratealackofmanagementabilityandcontrolbyLouisianatogetthisprojectbuiltonscheduleandonbudget.Finally,hadthematerialyousubmittedinyourOctober14,2011CAPresponsebeenofferedastheoriginalLouisianaBTOPgrantapplication,NTIAwouldnothaverecommendedyourprojecttotheNOAAGrantsOfficeforfundingin2010.RESULT:Asaresult,pursuantto15C.F.R.
§
24.43(a)(3),yourawardisterminatedimmediatelyduetomaterialnoncompliancewiththetermsandconditionsoftheaward.CoststhatyouincurafterterminationofyourawardarcnotallowableunlesstheNOAAGrantsOfficeandNTIAexpresslyauthorizethem.Othercostsresultingfromtheobligations,whichLouisianaproperlyincurredbeforetheeffectivedateoftermination,maybeallowableundercertaincircumstancesifsuchcostswerenecessaryandnotreasonablyavoidable.
See
15C.F.R.
§
24.43(c).Yourawardisherebyterminated.Considerationofthisadverseactionmaybeusedinfuturefundingdecisionsforyourorganization.ArleneSimpsonDirector,NOAAGrantsManagementDivision
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