Florida's request for more than $7 million to help fund its educational computer system has been rejected by federal eRate authorities for a second time.

Because state funding runs out at the end of January, the state is going to have to scramble to find the money to keep the network running, the New York Times Regional Newspaper Group reported Nov. 26. The state has vowed to keep the program running.

If state lawmakers can't find other ways to pay for the network, Florida's school systems may be forced to shoulder some of the cost themselves, according to news reports.

The Florida Information Resource Network (FIRN) links Florida's 3,700 public schools to the internet and offers eMail service to thousands of teachers. FIRN also is used by all 11 public universities and the state's 28 community colleges.

Last March, the state transferred operation of FIRN to Hayes E-Government Resources, which beat out three rivals for the $13 million contract.

Soon after receiving the contract, Hayes ended free dialup internet access for school employees while at home. But the state said the privatization deal would expand capacity and reduce downtime, leading to improved overall service.

FIRN is largely paid for under the federal eRate program, which is financed by surcharges levied by telecommunications companies. The program is run by a nonprofit agency set up by the Federal Communications Commission (FCC), called the Universal Service Administrative Co. (USAC).

After studying the Hayes deal, USAC's Schools and Libraries Division (SLD) this summer concluded Florida had not followed federal rules in awarding the contract to Hayes. Those rules require that the price of the contract be the "primary factor" used in selecting a vendor.

The state Department of Education defends its choice. It says other factors, such as technical skill and minority ownership, were considered, but value--or cost relative to the level of service provided--was the primary consideration.

To find the most cost-effective solution, the state reportedly developed a rubric that assigned points to the various parts of the bids to help evaluators easily compare them. The category for "Overall Project Concept, Design, and Cost" was weighted the highest, accounting for 35 percent of a bid's total score. The company selected by the state, Hayes E-Government Resources Inc., received the highest score of 83.6 percent. The next highest were Fijitsu (74.6 percent), AT&T (72.4 percent), and ITC Delfacom (41.6 percent).

Among other services, bidders were asked for their plans to provide help-desk functions, end-user support, and security against hackers, viruses, and other threats. Based on its overall approach, Hayes's proposal offered the best value for the state, officials said.

However, the SLD in mid-November denied the state's appeal for $7.6 million in eRate discounts to run the system for the coming year.