| The SLD announced this week that it will be unable to fund FY 2002 Internal Connection (Priority 2) requests at the 80% discount rate. This is the third year in a row that the cutoff for Internal Connection funding was above 80%. Since funding awards for FY 2002 as of Wave 29 total only $2.2 billion, about a half-billion below the SLD’s funding authorization, this decision suggests that the SLD has had to establish a significant reserve to deal with appeals and with pending applications still under review and/or investigation.
The SLD also announced that it had determined that FY 2003 Internal Connection requests will definitely not be funded below 70%. At similar stage last year, the decision had been that funding would not be available below 80%, so this announcement provides encouragement that FY 2003 Priority 2 funding will reach down to at least 80% and, perhaps, to somewhere in the 70-79% discount rate band.
In reaching this decision, the SLD has also explicitly determined that no funding will be available for applications received after the close of the original FY 2003 filing window on February 6, 2003. Applicants who submitted late Form 471s should be notified shortly.
These announcements have two implications for future funding waves.
(1) Since Wave 29, the SLD has skipped two biweekly release dates for FY 2002 funding. Wave 30, which is now expected to be released on or about June 30, will likely include a large group of decisions indicating that 80% Priority 2 requests are “Not Funded” due to a shortage of funds.
(2) Similarly, Wave 5 for FY 2003 funding will likely include a number of denials of Priority 2 funding requests below next year’s 70% cutoff. On a regularly scheduled basis, Wave 5 would be released on or about June 23, but we would not be surprised to see a short delay that would give the SLD the opportunity release as many FY 2003 decisions as possible prior to the start of the actual funding year on July 1.
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| A Form 470, the first step in the annual filing cycle for E-rate funds, can now be filed for FY 2004, the 2004-2005 funding year. As in past years, a Form 470 must be filed for all tariffed, month-to-month, and new contract services for which discounts will be requested on a Form 471. Although the Form 471 application window for FY 2004 has not yet been announced, it is expected to run from sometime in November through January or early February 2004.
The SLD has released a new version of the Form 470, dated May 2003. A copy of the new Form 470, together with its instructions and a list of special reminders, can be downloaded at Applicant Area.
Applicants can also fill out and/or submit a Form 470 online from the Apply Online section of the SLD Web site (see Apply Online Area) in either of two ways. There is an online PDF version that looks just like the new version of the Form 470, and there is an online interview format that will step an applicant through the filing process. The interview format is nicely done and is recommended particularly for less experienced applicants.
We strongly recommend filing Form 470s (and other E-rate forms) online whenever possible. Please remember, however, that unless an applicant has received a PIN for e-certification, the signature/certification pages of the Form 470 (pp. 11-12) must be printed out, signed, and mailed to the SLD.
Remember also that the funding year specified for new Form 470 submissions must be July 1, 2004 to June 30, 2005. Applicants planning to fill out a Form 470 offline must be particularly careful since the use of any other dates will result in an invalid Form 470 for FY 2004. When filing online, the 2004-2005 dates are the only option.
Several other aspects of the new Form 470, instructions, and reminders should be noted.
(1) Minimum processing standards require that applicants use either the new May 2003 version, or the previous April 2002 version. The April 2002 version, which does not include the OCR-scannable “hash” marks, is no longer available on the SLD Web site but can be found in the Forms Section of the E-Rate Central site.
(2) Additional language has been added to Item 13 stating “If you intend to enter into a multi-year contract based on this posting or [any] contract featuring an option for voluntary extensions, you may provide that information below.” Although the words “may provide” indicate an option, we recommend referencing at least the possibility of multi-year contracts if such use is at all likely.
(3) The new Form 470 Reminders section includes fairly extensive guidance on the procurement process focusing on RFPs, competition, fairness and openness, and cost-effective bid analysis. It indicates that “You must save documentation showing that you have complied with all applicable competitive bidding requirements, including copies of competing bids and documentation of the bid evaluation process and bid criteria used.”
An applicant, who does not have a RFP available at the time a Form 470 is filed, but plans to use a RFP process later in the procurement cycle, must be particularly careful. Our recommendation is, at a minimum, to indicate the planned use of a RFP in Item 12. Better yet, submit a second Form 470 after the RFP is available (and make sure that the bid submission date for the RFP is not set before the required 28-day posting period for the Form 470).
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| The SLD’s Waste, Fraud, and Abuse Task Force held its second meeting in Kansas City on May 29-30 which led to a number of proposed recommendations. An update on the Task Force’s progress, including a list of recommendations being considered, is (see Task Force Update).
In general, these recommendations fall into six broad categories which are directly or indirectly related to waste, fraud, and abuse: enforcement and compliance, wasteful incentives, competitive bidding, eligible services, inadequate education, and program complexity. A number of other potential recommendations will be discussed at the Task Force’s next meeting at the end of June.
Applicants and service providers wishing to comment on these or other possible recommendations are encouraged to contact one or more of the Task Force members listed at Task Force Members.
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