(Editor’s note: Now that the filing window for schools to request 2010 e-Rate discounts on their telecommunications and internet services has opened, here is some timely advice from e-Rate consulting firm Funds For Learning on applying for your share of the $2.25 billion in funding available.)
Each year, Funds For Learning hears from at least one applicant who has discovered an error on its Form 470 or finds its e-Rate funding in jeopardy because of issues with this form. These frantic calls usually involve pleas to help correct the problem or find some way around the issue. While some Federal Communications Commission (FCC) orders, like the Bishop Perry Order, have ushered in a new era of flexibility when it comes to correcting application errors, there are some things that can’t be corrected.
Therefore, it pays great dividends to put a little extra effort into this form and the processes that surround it, so that you won’t find yourself in a situation where your school or district could lose thousands or even millions in e-Rate dollars.
We have compiled the following list of 10 items to keep in mind related to your organization’s e-Rate procurement process.
1. Make sure your technology plan is the driving force behind all e-Rate purchases.
While your organization does not need to have a final, approved technology plan before you start the e-Rate procurement process, a draft must exist before you submit the Form 470. And, this draft needs to address the Schools and Libraries Division’s (SLD’s) "five elements" about how technology will be used to meet your organization’s educational objectives. It’s within these elements that the e-Rate eligible services your organization seeks will be derived.
Your technology plan does not need to name specific "feeds and speeds" (to use a USAC term), but the services for which your organization ultimately seeks e-Rate discounts must be justified within the technology plan. For example, if a district seeks discounts for a considerable amount of bandwidth, the use of that bandwidth must be justified by something in the technology plan–such as distance learning between campuses.
2. Describe the services sought on the Form 470, even if an RFP is being issued.
We have seen instances where an applicant has listed "see RFP" in the service description section of its Form 470. According to the SLD, this does not give a potential service provider enough information to determine whether it should consider responding to the form. Therefore, the Form 470 must describe with some specificity the products and services that the applicant is seeking, even if these are described in detail within an associated RFP. On the Form 470 is where the previously mentioned "feeds and speeds" are indicated.
Applicants also should not list overly generic descriptions, such as "eligible telecommunications services," on the Form 470. This, too, does not give a potential service provider enough information to decide if it offers the services your organization is seeking.
3. Select all possible service categories a service might fall within.
There are some services that are eligible for e-Rate discounts that can (or should) be listed in more than one category on the Form 470. The perfect example is cell phone service with data plans. While the ultimate Form 471 funding request will fall within the "Telecommunications Services" category, the SLD will check to make sure that the "data plan" portion was included in the "Internet Access" service category on the original Form 470.
If you aren’t sure which service category a service falls within, you can do a little research by reviewing the SLD’s eligible services list, which breaks out eligible services by category. If you are still unsure, you can list a service in more than one category to ensure that you won’t run afoul of e-Rate rules down the road.
4. Declare multi-year or renewable contracts both on the Form 470 and within the final contract’s language.
Applicants that enter into a multi-year contract or a contract that features voluntary extensions do not need to file a new Form 470 in the subsequent years of the contract, provided two criteria are met.
The first criterion is that the Form 470 that predicated the contract must specify that you sought to enter into a multi-year contract or a contract that features voluntary extensions or renewals. These items are selected in Block 2, Item 7 of the Form 470. If you’re unsure about the path you might choose regarding the type of contract you’ll enter into, you can select all of the options on this item, as they are non-binding.
The second criterion is that the contract you enter into must specify the length and any renewal or extension options (and their requirements). Any "good" contract should have these terms specified anyway, and the SLD will check to ensure they are there. Also, be sure to exercise any renewal or extension options prior to submitting your Form 471 application for funding in the future years of the contract.
5. Make sure the role of potential service providers in the procurement process is proper.
It is appropriate to talk with potential e-Rate vendors about their solutions or about technology trends, but once you start the procurement process, you want to be in control of the bidding process and limit the involvement of potential service providers.
One of the SLD’s missions is to ensure that every applicant conducts a fair and open competitive bidding process. The SLD continually cautions applicants that a potential service provider cannot in any way run or influence this process. This includes helping applicants fill out or post a Form 470, provide template language for the Form 470 or RFP, negotiate with prospective bidders, or serve on the evaluation team that selects the winning bid.
It’s actually easier to state what a potential service provider can do during the competitive bidding and selection process: respond to the Form 470 or RFP just as every other bidder does. If a potential service provider does anything beyond this, the process could be considered tainted–and all funding requests based on the Form 470 will be denied.
6. Select a service provider only after the Allowable Contract Date.
Every Form 470 that is successfully posted to the SLD’s web site will receive an "Allowable Contract Date." This is the earliest date on which an applicant can evaluate the bids or proposals they have received and choose a service provider.
Simply put, do not sign a contract with a vendor before the allowable contract date–or your funding will be denied. Applicants must wait a minimum of 28 days after a Form 470 is posted before they can sign a contract with a vendor or choose the winning proposal. Even if your local procurement regulations stipulate that schools can wait 21 days, based on FCC regulations, you must wait a minimum of 28 days.
7. The cost of e-Rate eligible items must always be the highest weighted factor.
This is common knowledge in e-Rate circles, but some applicants get "caught" by this rule each year. There are two common ways this happens. The first is that the cost of e-Rate eligible items must truly be the highest weighted factor in the evaluation process–it cannot be equal to or less than any other factor. We’ve seen instances where the cost of eligible items is equal to some other factor, and this is a violation of this rule. The cost of eligible items must be at least 1 percent higher than any other factor you use to evaluate potential bids.
A second way that applicants run into problems is when they have a multi-stage selection process, where a preliminary evaluation is performed and a smaller group of bids are selected for a final round of evaluations. The SLD has clarified its stance on these types of selection processes to say the cost of eligible items must be the highest weighted factor in each stage of the selection process.
8. Don’t forget to certify your Form 470.
This is one of those things that flusters newcomers to the e-Rate program, but it is critically important. There is a distinction between posting a Form 470 and certifying it.
Posting means successfully submitting the form to the SLD so it appears on the agency’s web site. This also triggers the SLD to send a "Receipt Notification Letter" (or RNL) to the applicant, which memorializes the posting of the form. To some, receiving the RNL gives them a false sense of security that everything with the Form 470 is complete, which might not be the case.
Certifying means submitting your certifications to the SLD, in which you attest to your compliance with established e-Rate rules and regulations. This is a separate step that must follow the posting of the form online. If you submit a Form 470 on paper, the certifications are found on the final pages of the form.
If the certifications aren’t made by the time the Form 471 is submitted, you could find yourself in a precarious situation. If you have any doubt whether your Form 470 is certified, you can find the certification status on the SLD’s web site or by calling the SLD’s Client Service Bureau.
9. Understand that Bishop Perry can’t fix everything–especially with the Form 470.
Many people have heralded the FCC’s Bishop Perry Order as the open-ended, second chance to fix any mistakes on their e-Rate form. This is simply not the case. When looking at the items that can be corrected on a Form 470, the list is really short. It only allows applicants to correct information about their organization.
The Bishop Perry Order does not allow applicants to add services or service categories to the Form 470; nor does it allow applicants to change the types of contracts they want to enter into. If any of this information is incorrect or omitted on the Form 470, a new Form 470 would be required to rectify the mistake. This leads to the last item on our list…
10. Don’t wait until the last minute to begin the procurement process.
When the Form 471 filing window closing is announced, the de facto Form 470 window is established as 28 days prior to this date. If you were to wait until this last possible date to post your Form 470, you would have only one day to choose service providers, sign contracts, and complete a Form 471. This also raises the likelihood of mistakes in the process.
Give yourself plenty of time to complete Forms 470 and 471 without feeling any unnecessary pressure by the established deadlines. The Form 470 itself might only take a few minutes to complete; however, it should be done with the utmost of care. And if you’re up against the deadline, you may not have the luxury of filing a new form if you make a mistake.
Peter Kaplan is the director of regulatory affairs and Scott Weston is the executive director of information services for e-Rate consulting firm Funds For Learning LLC.
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