The critics who say yes have an obvious self-interest, as you’ll see: They didn’t get the contract. But they also appear to have a point.

In February, Science Applications International Corp. (SAIC) landed a $28 million IT-administration contract from the Universal Service Administrative Company (USAC), a nonprofit organization that runs e-Rate, a controversial $2.25-billion-a-year program that subsidizes school and library networks. The e-Rate program is funded by consumers of telecommunications services through fees paid by carriers to the perpetually debated Universal Service Fund: In other words, we all pay for this, which is why it matters.

According to a terrific story on the brouhaha last week in eSchoolNews, those complaining about the contract are miffed that SAIC was awarded the internal USAC administration contract despite also being a provider of outside e-Rate services, most prominently a $51 million pact with the Los Angeles school system.

From the article: "Critics note that, as the information systems administrator for the program, SAIC will have unfettered access to electronic information about all E-rate applicants and other service providers -- inside information that could help the company land even more E-rate business with schools. . . . In theory, the company could use this information to submit a lower bid for the same services the next time an applicant requests these services through the E-rate program."

SAIC had nothing to say about the matter when asked to comment by eSchoolNews.

As for USAC, the organization responsible for blessing this arrangement, its spokesman says there’s no fire beneath all this smoke. Again from the article:

"We’ve looked very carefully at the possible conflicts of interest and have put in place some specific measures" to prevent abuse, says Eric Iverson, director of external relations for USAC. He noted that all SAIC employees who are working on the systems administration project have signed nondisclosure forms that legally prevent them from discussing any of the information related to their work. This would prevent them from sharing information with their SAIC colleagues who submit bids for E-rate projects, Iverson says.

Not only are the doubters not satisfied by such assurances, but they also see a double standard in how USAC runs its own shop and what it expects from e-Rate service providers, who have been made to jump through hoops to prove themselves above reproach after a number of reported sightings of that three-headed government bugaboo: waste, fraud and abuse.