About the Schools and Libraries Program
In general, a contract is a binding agreement, enforceable by law, between two or more parties that creates an obligation to do, or not do, something. Contract definitions and requirements are set out in each state or territory by that state’s or territory’s contract law.
Except for services to be delivered under non-contracted tariffed or month-to-month arrangements, an E-rate applicant must sign a contract with the service provider before signing and submitting a completed (certified) Form 471. Applicants must also comply with state contract law. Applicants must be able to demonstrate that they had a signed contract in place before or at the time they submitted their completed Form 471, section FCC 54.504c.
Establishing Forms 470. The establishing Form 470 is the Form 470 that served as the basis for the competitive bidding process. For a multi-year contract, the establishing Form 470 for that contract could have been posted in a previous funding year.
Qualified existing contracts. A qualified existing contract is
Tariffed services provided under a contract. A tariffed service provided under contract is a service offered under one or more tariffs but for which a contract has been signed. In all cases, funding requests for which a contract has been signed should be reported as contracted services. That is to say, the Form 471 Block 5 should feature the Contract Number in Item 15 (not a “T”), the Contract Award Date in Item 18, and the Contract Expiration Date in Item 20.
Legally binding agreements. We occasionally have used the phrase legally binding agreement as another term for contract. It is important for applicants and service providers to meet all FCC and state contract requirements. Verbal agreements and quotes do not meet these FCC requirements. Purchase orders may or may not meet state contract requirements.
STATE MASTER CONTRACTS
A State Master Contract is a contract that is competitively bid and put in place by an entity of state government for use by others.
Filing the Form 470.
Reporting the Contract Award Date for state master contracts. The Contract Award Date shall not be earlier than the 29th day after the posting of the Form 470. If an applicant files its own Form 470 and chooses either a new or a pre-existing state master contract as the most cost effective bid, it is advisable for the applicant to memorialize its decision to purchase off the state master contract after the bidding process is complete and to record the date of this memorialization as the relevant Contract Award Date in its submitted Form 471 application.
Purchase orders or other state master contract requirements for applicants. If the state master contract requires the issuance of purchase orders or contains other requirements for applicants, the applicants must meet those requirements. For example, if the state master contract requires the applicant to issue a purchase order by July 1, then the applicant is required to meet that deadline.
MULTI-YEAR CONTRACTS AND CONTRACTS FEATURING VOLUNTARY EXTENSIONS
A multi-year contract means a contract that covers more than one year. For example, a three-year contract would expire at the end of the third year. A contract featuring voluntary extensions means that the contract expires at the end of its original term and may be voluntarily extended for one or more years pursuant to the provisions in the contract.
To comply with the FCC competitive bid process, the applicant should indicate in its RFP and/or Item 13 on the Form 470 its intent to enter into a multi-year contract for services or a contract that includes voluntary extensions. As a best practice, the applicant may provide a range of years in Item 13 on its Form 470, such as "seeking a 3- to 5-year contract" for a multi-year contract or “seeking three 1-year contract extensions” as terms for voluntary extensions. The applicant should also indicate the type of services for which it is seeking a multi-year contract.
If an applicant has a contract with voluntary extensions for which it has filed a Form 470, it cannot extend the contract beyond its original expiration date without posting a new Form 470 and considering all bids received, unless voluntary extensions were indicated in Item 13 of the Form 470 or in the RFP.
FCC rules grant a limited extension of the FCC's competitive bidding rules for contracts for non-recurring services. "[C]ontracts for nonrecurring services may be voluntarily extended to coincide with the appropriate deadline for the implementation [of delivery and installation for nonrecurring services]. Parties may not, however, extend other contractual provisions beyond the dates established by the Commission's rules without complying with the competitive bidding process." [FCC 01-195, released June 29, 2001]. In other words, if an applicant is granted an extension of time for delivery and installation of non-recurring services, the applicant may extend the relevant contract without rebidding. Applicants should file a Form 500 to notify USAC of such contract extensions.
Multi-year contracts for newly-eligible services or entities. If the original Form 470 or RFP did not include the newly-eligible services or entities, the applicant will be required to post a new Form 470 for those services.
Content Last Modified: May 28, 2004
Need help? You can contact us toll free at 1-888-203-8100.
© 1997-2007, Universal Service Administrative Company, All Rights Reserved