Alaska State Library > E-rate

Applicants must file a new form 470 each funding year that they are seeking tariffed or month-to-month services or new contractual services. When the Form 470 is filed, USAC will make it available to interested service providers by posting it to the USAC website. At this point, service providers may begin to contact you about your advertisement for services, and it becomes important to understand what is allowable under the competitive bidding process. Violation of the competitive bidding process is one of the primary reasons for funding denial in the Universal Service program. You can find guidance on the competitive bidding process USAC website.

What a Service Provider Can and Can Not Do For You

With the new emphasis on avoiding waste, fraud and abuse in the E-Rate program, dealings between applicants and vendors are coming under the heaviest scrutiny. There are Dos and Don’ts to keep in mind. In general, until you have entered into a contract with a service provider, that provider may not be a part of any decision making for your school or district.

A service provider may not be involved in the design of your system or the preparation of your form 470 if they also plan to bid for your service.

A service provider may not give you something of value that they would charge another customer for. This rule includes your governing board. Accepting services, gifts, or other tangible items such as equipment is in violation of FCC program rules. This rule extends all gifts, and not just those related to E-rate services.

A service provider may not be involved in the selection process (including the evaluation of bidding, preparation of the form 470, design of the RFP) or have access to information that any other provider might have.

Service providers MUST NOT:

• Suggest language for, sign, or submit a Form 470
• Act as the contact person, technical contact person, or authorized person on a Form 470
• Suggest language for, provide templates for, or design your Request for Proposals (RFP)
• Create or suggest language for your evaluation criteria
• Evaluate bids

Once a provider is selected or a contract is signed, the service provider is encouraged to work with you on filing the form 471 Item 21 attachments so that their billing is in line with the wording you use on your Item 21 attachments to form 471. Applicants may choose a contract, or may

You are encouraged to work with your service provider to ensure that the make, model, and billing descriptions of equipment actually used are in keeping with what was filed with USAC.

Form 470 is your way of advertising for services to service providers. You may not list any service on your form 470 that is not covered in your technology plan and are not eligible for E-rate discounts on any service that was not included in a form 470.

The form 470 (or any RFP associated with a form 470) must be posted for a minimum of 28 days prior to entering into any agreements with a service provider.

All service providers must have access to the same information during this 28 day period and up until a provider is selected. Price must be the primary factor when constructing the evaluation of bid responses. When an applicant examines and evaluates the bids received for eligible services, price must carry more weight than any other factor. This means that the price should be the primary factor, but does not have to be the sole factor. Other relevant factors may include: prior experience including past performance; personnel qualifications including technical excellence; management capability including schedule compliance; and environmental objectives. Samples of scoring rubrics can be found on the USAC website as a webpage and in PDF.

Do not enter into any agreements, verbal or otherwise, prior to the 28 day waiting period. Violation of this rule is one of the most common reasons for funding denial in the E-rate program.

Contract Language and Structure

• Before you can file a 471, you must have a contract or “legally binding agreement" with the service provider which you are listing on the Block 5 form.
• Legally binding agreements include letters of intent, purchase orders approved and signed by both school or library authorities and the concerned vendor, tariff regulations in cases of common telecommunications carriers, price sheets and bid forms signed by both parties, and other indications that your organization is firmly committed to using any funds provided for the precise services listed and with the exact vendor listed.
• Any contract/agreement must contain a beginning and ending date, a description of services and charges and 2 signatures, one from buyer and one from service provider, each with a date beside the signature.
• Contracts may not be signed prior to 28 days from the date of the form 470 posting, or the date of the RFP posting (if there is an RFP), depending on which comes later.
• Contracts must be signed before the Form 471 submission (but not earlier than 28 days after posting Form 470 or RFP.)
• The SLD reports that the most common reason for funding denial is violation of the 28 day wait rule.
• Make sure that any contract which you cannot afford without E-Rate support contains clauses stipulating that the contract award is subject to full anticipated E-Rate funding.
• You may wish to insert a clause requiring the winning bidder to participate in the E-Rate program and that their signature indicates they have a current Service Provider Annual Certification (SPAC) on file.
• Additional language which might be valuable is concerned with the length of time between your contract negotiations and signing and the actual installation of equipment. If there is any possibility that a piece of equipment may no longer be available (because it's been replaced with something more advanced, for example), you may want to have language in the contract specifying that the contractor will replace your original choice with the upgraded version for no more money.
• If there is leased equipment involved, you may wish to specify who is responsible for the removal and shipment of said equipment after the contract expires.
• If you want to extend a contract which is expiring, you need to be sure that you are not circumventing procurement or E-Rate regulations. Procurement regulations are a local matter. Your district or city may have specific regulations about the circumstances under which you may extend a contract without going through a bidding procedure. If so, you are bound by them. So far as E-Rate is concerned, you may extend a contract IF it is not contrary to local regulations and IF the possibility of an extension was announced on the 470 under which the contract was originally signed. The announcement could be made in a published RFP or in Item 7B of Block 2 of the 470. This gives all bidders an equal chance to propose a contract for whatever length of time fits your circumstances.
• If you are in the middle of a long term contract and want to upgrade the services provided without jeopardizing your E-Rate support, you must decide whether the upgrade is a simple change or will require a new 470 posting and new bidding process. To make the decision, look at the language of the present contract. If it is such that the upgrade can be done under the current documentation without any new addendums or paperwork being necessary, you can probably call it a change in service, file the appropriate paperwork, and will not need to file a new form 470. You cannot increase the amount of money requested under the current contract, but you may get an upgraded service.

Building a Paper Trail

You need to retain these documents for eight years in case of audit or review:

• Applicants must save all RFP documentation pertaining to the competitive bidding process and vendor selection for five years from the last date of service. Eight years is the recommended time.
• All forms 470 posted must be retained
• All forms 471 posted must be retained
• All viable bids received must be retained
• A list of participants in the bid evaluation process, and their relationship to the school/district, must be retained
• All evaluation criteria, spreadsheets, scoring rubric and any other materials relating to vendor selection must be retained.