Below is a compilation of some frequently asked questions regarding
contracts.
*1. Are we required to sign a contract for a Category One service (telecom
and Internet)?*
Contracts are not required if you are purchasing the service on a
month-to-month basis. Other than that, applicants are required to sign
contracts for E-Rate eligible telecommunications or Internet access
services before a Form 471 is submitted.
*2. Are contracts required for Category Two services/equipment purchases
(internal connections and basic maintenance)?*
Yes. Contracts are required to be signed for all Category Two
services/purchases before the Form 471 is submitted.
*3. Must contracts be signed by both the applicant and the vendor?*
No. In March 2007, the FCC clarified that the vendor's signature is not a
program requirement unless state and/or local contract law includes this
requirement.
*4. Are we required to obtain school board approval prior to signing
contracts?*
E-Rate rules require that applicants follow local requirements and local
policy when it comes to contract approvals. So if your school board
requires their approval on all contracts, then the board must approve those
contracts prior to their signing and Form 471 submission. Some school
boards have given superintendents or business managers delegated authority
to sign certain contracts, and that is permissible under E-Rate rules.
*5. Are we allowed to negotiate a contract or must we accept the vendor's
standard terms and conditions?*
Negotiate! Often a vendor will submit their standard terms and conditions,
but you are under no obligation to accept them as-is. Read the fine print;
discuss what happens if service isn't delivered for x period of time, or if
service isn't turned on by the contracted date.
Important: With so many districts closing school buildings, it is extremely
important to review the service termination terms and negotiate a reduced
or waived termination liability should the district have to close school
buildings. You don't want to get stuck in a contract that requires you to
pay for service going to a closed school.
*6. Should we specify discounts or reimbursements in our contract?*
If you care deeply about whether you pay your bill in full and seek
reimbursement, or whether the vendor submits to you discounts bills, you
should specify these terms in your contract. It is not a requirement,
however. Most applicants tell their vendors which funding method they
prefer after they receive their Funding Commitment Decision Letter (FCDL).
*7. Can/should we include service upgrades in the contract?*
Absolutely. USAC has very strict rules regarding upgrading service or
products. If your original Form 470 Request for Services included upgrade
language such as, “X service or faster” or “Y component or upgrade”, AND if
your contract include language that permits such upgrades in the middle of
the contract, upgrading to a faster bandwidth or newer component will be
much easier and you likely won't have to repost a new Form 470.
*8. Should we submit a copy of the contract with our Form 471?*
This is optional. You will have to provide many specific details about your
contract in the Contracts Module within EPC prior to submitting your Form
471. You have the option of uploading a contract to EPC at that time. USAC
may ask to see a copy of your contract during review if they have
questions, and having it already available in EPC may save time
particularly if more than one FRN is filed as a result of that contract.
*9. Are contingent contracts permitted?*
Yes. Because the E-Rate application cycle requires contracts to be signed
months prior to the start of the actual funding year, USAC accepts
contingent contracts. The most common contingencies include those for
E-Rate funding or formal budget approval. Nevertheless, USAC expects these
contracts to be binding if these conditions are met.
*10. How long should our contract run?*
If possible, effective contract dates for recurring services should cover
the entire funding year, from July 1st to June 30th (for example, July 1,
2016 - June 30, 2017). Similarly, a non-recurring service or equipment
contract should be written to extend at least until the September 30
following the funding year, normally the last allowable date to receive a
non-recurring service or equipment.
*11. Are we permitted to sign contracts that include voluntary extensions?*
Yes! A contract including voluntary extensions means that the contract
expires at the end of its original term and may be voluntarily extended for
one or more years. In order to take advantage of the extension years the
contract would have to include specific language describing the exact
number of years that the contract may be extended. Open-ended contracts or
automatic annual renewals cannot be considered voluntary contract
extensions. For example: "a 2-year contract with two, one-year renewals" is
fine and no new Form 470 would have to be posted during the renewal
periods. But "A 2-year contract, with automatic annual renewals" is not
acceptable and the service would have to be rebid at the end of the 2-year
contract.
*12. Can I sign my contract before my 28-day waiting period is up?*
No! Pay careful attention to not sign a contract or select a service
provider before the end of the 28 day Form 470 waiting period. The contract
must be signed and the Form 471 application must be submitted on or after
the Allowable Contract Date which is basically the 29th day after the
corresponding 470 is posted.
_____________________________________________
*Anne Perloff*
Maine State E-Rate Coordinator for Schools
Networkmaine ... a unit of the University of Maine System
Web: www.networkmaine.net/erate/
Email: [log in to unmask]
Phone: 207-561-3584
Fax: 207-561-3531
Mail:
Networkmaine
5752 Neville Hall Rm 244
University of Maine
Orono, ME 04469
|
