News of the Week

The preliminary indication from the SLD is that over 42,000 Form 471s were received (or postmarked) within the application window that closed February 6. The vast majority of these applications - approximately 39,000 - were submitted online and, of these, 11,000 were certified electronically. Of the 3,000 - 4,000 application that were submitted on paper, approximately one-third have already been data entered.

The application total for FY 2003 is about 5,000 higher than for FY 2002. The increase probably reflects the SLD's suggestion this year that applicants file separate applications for Priority 1 and Priority 2 services. Within 2-3 weeks, the SLD is expected to release an initial estimate of the demand for funds that will provide the first broad indication of the Internal Connection funding picture for the coming year.

Once, as expected, the SLD confirms that the aggregate demand for funds represented by the applications received within the window exceeds the supply of funds, it will begin notifying applicants who missed the window that their applications have been rejected. Notifications of late applications will be made by letters, rather than by postcards, this year. These letters, like all SLD correspondence for FY 2003, will be on yellow paper in yellow envelopes.

SPAC Alerts to Applicants and Vendors

Earlier this week, the SLD began sending out e-mail notifications to applicants listing any of their suppliers who had not filed SPACs (Service Provider Annual Certification Forms) for FY 2002 or earlier years. Notifications were also sent to the delinquent vendors.

The notices reiterate a recent change in the SLD's BEAR processing rules, to take effect February 28, whereby BEARs for a given funding year will not be approved unless the associated vendors have filed SPACs for that year. The SLD's announcement of this policy change was posted on their Web site on 01/29/2003 and is still available in the "Headlines" section of the SLD home page.

Since the basic invoicing deadlines for FY 2001 or earlier years have passed, we expect that most SPAC notices will deal with FY 2002. In this case, applicants planning to file FY 2002 BEARs should do two things.

(1) If any significant reimbursements are due for services received since July 1, 2002, applicants can file their BEARs for the first portion of the funding year before the new SLD rules take effect on February 28.

(2) Assuming BEARs will have to be filed after February 28th, applicants should start calling their delinquent vendors now to urge them to file their SPACs as soon as possible.

A SPAC notice for FY 2001 and earlier suggests that the invoice deadline for the associated FRN had been extended. The new invoice deadline for any specific FRN can be determined by using the SLD's "FRN Extension Status" Utility in the "Apply Online" section of the SLD Web site. In this case:

(1) If a BEAR will be filed for the FRN, follow the two steps listed above.

(2) If all invoices for the FRN have already been filed, but additional funding remains, consider filing a Form 500 to cancel the remaining funding so that it can be committed to other applicants.

Note that the SLD's SPAC e-mails do not list the associated Form 471 application numbers or FRNs, which may be confusing to applicants who filed more than one application. To determine the specific FRNs involved, applicants should review their original FCDLs for the appropriate year (taking into account any subsequent SPIN changes).