Pitfalls to Avoid in Filing Form 470

1. Free Service Advisory

The SLD is aware that some service providers have offered price reductions or promotional offers for services in addition to the discounts available from the Schools and Libraries Universal Service Program. We are pleased that service providers are increasing the ability of schools and libraries to acquire the services that they need to make effective use of technology. However, we want to remind applicants and service providers that the value of these price reductions/promotional offers must be applied before the service provider submits the bid for the pre-discount cost. The pre-discount cost is the basis upon which funding requests will be made by Form 471 applicants. The value of all price reductions or promotional offers must be deducted from the cost of service to the applicant to establish the applicant's pre-discount cost. In other words, the Universal Service Program "Pre-Discount Cost" that will appear in Columns C, E, H, and I of Item 23 on FCC Form 471 must take into account all service provider price reductions.

For example, if a service provider informs an applicant that its best regular price is $100, but that it will also offer the applicant a 20% price reduction, then the pre-discount cost to be included on Form 471 is $80. The applicant's universal service discount will be applied to this $80 pre-discount cost. The service provider and applicant cannot use the $100 price as the pre-discount cost to be used for computing the Schools and Libraries Universal Service Program funding, and then have the service provider convey the additional 20% price reduction to the applicant's non-discounted portion of the cost. In other words, all service provider discounts must be reflected in the competitive bid price offered in response to a Form 470 posting. The SLD will be reviewing applications to assure that the FCC rules on competitive bids and lowest corresponding price are complied with fully. If the SLD determines that a Form 471 application features a pre-discount cost where the value of service provider price reductions/promotional offers has not already been deducted, the SLD will deny the request for such services.

2. What Exactly is "Most Cost Effective" Service?

When you examine the bids you receive for eligible services, you must select the most cost-effective bid. This means that the price should be the primary factor, but does not have to be the sole factor, in evaluating the bids. Other relevant factors may include: prior experience including past performance; personnel qualifications including technical excellence; management capability including schedule compliance, and environmental objectives. The value or price competitiveness of services or products that are ineligible for universal service discounts cannot be factored into the evaluation of the most cost-effective supplier of eligible services.

For example, Service Provider A offers a price for eligible services of $1,000. Service Provider B offers a price for the same services for $1,200, but this price also includes ineligible services valued at $300 to be provided at no additional cost to the applicant. The value of this "free" software or hardware cannot be factored into the evaluation of the most cost-effective supplier of eligible services. All other things being equal, Service Provider A is offering the most cost-effective bid for services eligible for a universal service discount.

3. Service Provider Offers to Complete Form 470

Many service providers offer to complete the E-rate forms for their clients. It is important to remember that applicants — and only applicants — can sign and file the Form 470. The signing of a Form 470 by a service provider, or the listing of a service provider representative as the Form 470 contact, are considered by SLD and the FCC to be violations of the competitive bidding requirements of the program. The reason is that it appears that the applicant has a pre-existing relationship with that service provider. This appearance of such a relationship compromises the open and fair quality of the competition that is the subject of the Form 470. As a result, those Forms 470 signed by service providers, or listing service provider representatives as contacts, will be rejected; any Form 471 citing such Forms 470 will be rejected.

4. Approving the Technology Plan

Only technology plans approved by SLD-certified approvers will be accepted by the SLD. Certified approvers include state education agencies, state library agencies and a variety of nonpublic school associations. In previous funding years the SLD has received applications referring to technology plans approved by a wide assortment of organizations, including service providers. The SLD Client Service Bureau can help you find a SLD-certified Technology Plan approver.

5. Online Filers: How to Successfully Submit your Form 470

Follow these simple steps to make sure your Form 470 is successfully submitted to the SLD:

1. After you have completed each block, print a copy of the screen for your records.

2. Provide the appropriate answers in Block 5, Items 19-29.

3. Print a copy of this screen for your records.

4. Click the "Next" button to move on to the next page, which features special instructions.

5. On this special instructions page, read all the instructions and then click the "Next" button at the bottom of the screen. By clicking "Next" you are simultaneously releasing your completed application to the SLD for posting, AND viewing a complete version of Block 5 of your Form 470. This version represents the Block 5 information as it appears in the SLD database. Clicking "Next" will prevent any further changes to the application. Please be sure that you are satisfied that all entries to the Form 470 are correct and you are fully authorized to release this form for posting before clicking "Next" on this page.

6. Print a copy of this Block 5 Certification and Signature page, sign Item 25 with an original ink signature, and submit it to the SLD either manually, by mail, express delivery or U.S. Postal Service Return Receipt Requested. For Funding Year 4, make sure that the certification is postmarked no later than January 18, 2001.