E-Rate 101 Overview of the Program

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							                   E-Rate 101:
             Overview of the Program
                  Training for Success
              Schools and Libraries Division

Washington, DC • Orlando • Boston • New Orleans • Cleveland • San Francisco • Phoenix
                              September/October 2007
                                                                               www.usac.org
                                 Overview
   Eligibility
   Eligible services
   Technology planning
   Requesting services (Form 470)
   Discounts
   Ordering services (Form 471)
   PIA Review and commitments
   Confirming services (Form 486)
   Invoicing (Form 472 or Form 474)
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                       Funding Timetable
 Funding commitments are made by funding
  year (July 1 – June 30)
  – Recurring services received July 1 – June 30
    (12 months)
  – Non-recurring services delivered and installed
    July 1 – September 30 (15 months)
 The Window: Form 471 filing window (mid-
  November to early February before the
  start of the funding year)
 We encourage you to file online
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                      Applicant Eligibility
 To be eligible, a school:

  – Must meet the statutory definition of an
    elementary or a secondary school in the
    No Child Left Behind Act of 2001
  – Must not be operating as a for-profit
    business
  – Must not have an endowment exceeding
    $50 million
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                       Applicant Eligibility

 To be eligible, a library:

  – Must be eligible for assistance from a
    State library administrative agency
    under the Library Services and
    Technology Act
  – Must not be operating as a for-profit
    business
  – Budget must be completely separate
    from any schools
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                      Applicant Eligibility
 Consortia
  – Can include both eligible and ineligible
    entities
  – Only eligible entities can receive
    discounts
  – Consortium leader has record-keeping
    and administrative responsibilities

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            Service Provider Eligibility
 Form 498 (contact information)
  – Request a Service Provider
    Identification Number (SPIN)
  – Provide/update contact information
 Form 473 (annual certification)
  – Must be filed for each funding year
    before USAC will pay invoices

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                                          www.usac.org
            Service Provider Eligibility

Telecommunications Carriers
 Must provide telecommunications services
  on a common carriage basis
 Must file Form 499A every year and may
  be required to contribute to the Universal
  Service Fund


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                           Eligible Services
Four categories of eligible services
 Priority 1 (funded first)
  – Telecommunications Services
  – Internet Access
 Priority 2 (funded beginning with neediest
  applicants first)
  – Internal Connections
  – Basic Maintenance of Internal Connections
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                           Eligible Services

 Priority 1
  – Telecommunications Services
     • Local and long distance, wireline and
       wireless, voice/data/video
  – Internet Access
     • Basic conduit access to the Internet


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                            Eligible Services
 Priority 2
  – Internal Connections
    (switches, hubs,
    routers, wiring, cabling)
      • Internal Connections funded
        only 2 in 5 funding years
  – Basic Maintenance of Internal Connections
  NOTE: End user equipment - such as
  computers, monitors, or phone sets - is NOT
  eligible
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                          Technology Plan
 Applicants must develop a technology plan
   – Use telecommunications services and
     information technology to achieve
     educational goals and/or library
     improvements
 A plan IS required for discounts on any
  products or services other than “Basic
  Telephone Service” and voice mail.
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                  Technology Planning
 Must contain five elements:
  – Goals/Strategies for using technology
  – Professional development
  – Needs assessment
  – Evaluation process
  – Sufficient budget
                          Make sure your technology plan is
                          written at the time the Form 470 is filed

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                                                         www.usac.org
                   Technology Planning
 Must be written before Form 470 is filed
 Must cover all 12 months of the funding year
 Should not cover more than 3 years
 Must be approved by a USAC-certified
  Technology Plan Approver (TPA) by the start
  of services or the filing of Form 486,
  whichever is earlier
 Service providers should not be involved in
  the creation of the technology plan and
  should not act as the technology plan
  approver
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                                         www.usac.org
                                    Form 470
Form 470 – Services Requested
 Filed by applicants to define desired services
  and open the competitive bidding process
 Must be posted on the USAC website for at least
  28 days before selecting service provider and/or
  signing a contract
 Form 470 request must be based on the
  technology plan
 Applicants can also issue a Request For
  Proposal (RFP), which must also be available for
  at least 28 days

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                                  Form 470
Multi-year or annual posting
 Can be filed once for multi-year contracts or
  contracts with voluntary extensions, but Form
  470 and RFP must indicate intent
 Tariffed or month-to-month services must
  post Form 470 annually
 Service providers are prohibited from filing
  and signing Form 470 or representing
  applicant in bidding process
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                                    Form 470
 Competitive Bidding
  – The applicant must conduct a fair and open
    bidding process
     • All bidders are treated the same
     • All bidders have equal access to information
     • All bidders know what is required of them
  – The applicant must choose the most cost-
    effective offering with the price of eligible
    products and services being primary

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                                            www.usac.org
           Receipt Notification Letter

Receipt Notification Letter (RNL)
 Issued by USAC after Form 470 is posted
 Provides important information
   – Allowable Vendor Selection/Contract
     Date (28 days after posting)
 Offers opportunity to make allowable
  corrections

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                                     www.usac.org
                                      Discounts
 Schools and libraries can receive
  discounts on eligible services.
 Discounts range from 20% - 90% on
  eligible products and services
 Discounts are based on:
  – Percentage of students eligible for the
    National School Lunch Program (NSLP)
  – Urban or rural location of school or library

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                                     Discounts
Discount Matrix

       Percent of           Urban   Rural
       Eligible Students
       Less than 1%         20%     25%
       1% - 19%             40%     50%
       20% - 34%            50%     60%
       35% - 49%            60%     70%
       50% -74%             80%     80%
       75% -100%            90%     90%
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                                     Discounts
   Calculating Discount Methods
    – Primary measure: NSLP
    – Alternative discount mechanisms
   Shared Discounts
    – School districts use the weighted average of
      the discounts of individual schools in the
      school district
    – Libraries use the simple average discount of
      the school district in which they are located
    – Consortia use the simple average of the
      consortium members
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                                      Contracts

 Applicants must sign and date contracts before
  the Form 471 is certified
  – Date can be written in contract
 Contracts can cover more than one year or
  contain extensions, but these options must be
  indicated in the establishing Form 470
 Tariffed and month-to-month services do not
  require a contract, but they are considered
  contracted services if a contract is signed

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                                   Form 471
Form 471 – Services Ordered
 Contains specific information on services
  ordered, quantities, from whom, at what price
 Shows discount rate calculation and lists
  entities receiving services
 Applicant certifies compliance with rules and
  verifies that it has the necessary resources to
  make effective use of the discounted services
 Must be filed each year within the filing
  window

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                                      Form 471
 Service providers are encouraged to:
   – Provide guidance to the applicant on its
     services and functionality
   – Assist with providing information for the Item
     21 attachment and other information
 Service provider should always provide correct
  SPIN and contact information
 Service providers should avoid any involvement
  in the bidding process except as bidders and
  should not answer any questions regarding the
  bidding process.

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                                              www.usac.org
                               Receipt
           Acknowledgment Letter (RAL)

 Issued by USAC to applicants and service
  providers after Form 471 is certified
 Confirms the filing of the Form 471 and
  provides the details of the funding requests
 Offers an opportunity to make allowable
  corrections


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                                   PIA Review
 Program Integrity Assurance (PIA) checks for
  compliance with program rules, eligibility of
  entities and services, verification of service
  types/costs
   – Provide complete and prompt responses to
     PIA’s questions
   – Ask for clarification if you don’t understand
   – Service providers can assist applicants in
     responding to PIA questions about the
     products and services they are providing but
     not about other areas.

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                   Funding Commitments
 USAC issues Funding Commitment Decision Letter
  (FCDL) to applicants and service providers when
  PIA review is complete
 Funding status by Funding Request Number (FRN):
   – Funded (includes modifications)
   – Not funded
   – As yet unfunded (applicant FCDL only)
   – Canceled
 Funds approved for specific services from specific
  service providers at the applicant’s approved
  discount rate
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                                  Form 486
Form 486 – Services Confirmed
 Notifies USAC that services have started
  and invoices can be paid
 Applicant certifies that its technology plan
  meets program requirements
 Applicant certifies its status under
  Children’s Internet Protection Act (CIPA)

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                                Form 486
Form 486
 Filed online or postmarked no later than
  – 120 days after the Service Start Date or
  – 120 days after the date of the FCDL,
     whichever is later
 There may be a penalty for filing late
 Service Start Date
  – Cannot be before July 1 of the funding
     year
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                                 Invoicing
Form 472 or 474 – Services Invoiced
 Requests reimbursement from USAC for
  discount on cost of services delivered
 Filed online or postmarked no later than
   – 120 days after the last date to receive
     service or
   – 120 days after the date of the Form 486
     Notification Letter, whichever is later
 Two options for requesting reimbursement
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                                   Invoicing
Form 472
Billed Entity Applicant Reimbursement
  (BEAR) Form
   – Filed if applicant PAID for services in full
   – Reimbursement handled through service
     provider
   – Cash or credit reimbursement
   – Service provider must reimburse applicant
     within 20 days of receipt of funds
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                                 Invoicing
Form 474
Service Provider Invoice (SPI) Form
  – Filed by service provider
  – Applicant gets discounted bills
  – Submitted AFTER applicant has
    received service and been billed by
    service provider

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