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Form 471 Guidance & PIA Review

After you have negotiated with your vendor and signed a contract, you will have to file a Form 471 to officially request E-rate funding for your new service or equipment purchase. After this form is filed, it will undergo a process known as program integrity assurance (PIA) review where USAC will decide if it will provide the funding you requested on your Form 471.

  Form 471 Filing Deadline is Approaching

This year, the deadline to submit a Form 471 is March 27. Although little has changed on the 471 since last year’s filing window, here are some tips and reminders to help you navigate the filing process effectively and on time.

WAIT 28 DAYS
If you are filing for new services (or existing services but under a new contract) don’t forget that you must wait a minimum of 28 calendars days after filing your Form 470 and RFP (or after filing the last addendum to your 470 or RFP) before you sign a contract for the new service. Contracts should be signed no sooner than the 29th day after your Form 470 was filed.

FOLLOW YOUR OWN RULES

When you are evaluating bids, make sure you follow the bid evaluation criteria you decided on at the beginning of the process. If you introduce new criteria or eliminate a bid based on criteria that was not disclosed in your 470/RFP, that could be grounds for a competitive bidding violation and subsequent denial of your funds. And remember, you must select the most cost-effective solution; while this doesn’t always mean the least expensive, you need to make sure you have a solid, written explanation of why you selected your winner and be ready to defend it during the review process.

BE PREPARED
Prior to starting your Form 471, you will need to upload any new contracts into the EPC system and associate them with the Form 470 that initiated the relevant bidding process.

GET YOUR VENDOR INVOLVED
Per the program’s competitive bidding rules, you must keep all vendors at arm’s length during the bidding and evaluation process. However, that all changes once you’ve selected a winning vendor. Once that contract is signed, they are your partner and you can and should work with them to gather the information needed to complete your Form 471. This could include:

  1. Line Item Information: For Category 2 projects (internal connections equipment and services), you are often purchasing a lot of different items, from routers and wireless access points down to jacks, screws, and cables. On the Form 471 you will need to enter the information for every last piece of equipment, the number of each item being purchased, and the cost. We recommend asking your vendor to fill out a spreadsheet with this information for you, which you can then upload into the EPC system instead of having to type it all out yourself. You can find templates for these spreadsheets HERE.
  2. Build Cost Information: If your new Internet Access or WAN service requires special construction of fiber optic or microwave connections, you need to be prepared for a LOT of questions regarding the build costs. Many of these questions can only be answered by your vendor, so make sure and reach out to them as quickly as possible to gather this data. This information may include:
  • For fiber builds, the length of the fiber being installed in feet, and the cost per foot of the construction.
  • The cost of any modulating electronics, maintenance, and operations, or additional equipment (for dark fiber or self-provisioned fiber projects).
  • The number of strands of fiber being installed. The E-rate program will only cover the cost of the actual number of strands being lit and used by the applicant, so if additional strands are being installed a cost allocation should be done for the incremental cost of those extra strands.
BREAK IT OUT

Although you can file for both Category 1 and Category 2 projects and services on the same Form 470, you must submit separate Form 471s for each Category. Also, within your Form 471s, you will need to make sure and file separate funding requests for parts of certain projects. For example, if you are requesting funding for a fiber build that includes special construction costs, you will submit one funding request (FRN) for the monthly recurring charges (MRC) related to the ongoing use of the fiber, and a separate FRN for the non-recurring charges (NRC) related to the special construction.

STATE MATCHING FUNDS
18 States now offer E-rate State Matching Funds for Special Construction Projects. Simply put, if you are filing for special construction funding for a fiber or microwave build, and you are located in one of these states, you can file for matching funds. If approved, your state will cover an additional 10% of the cost of the NRC special construction costs, AND the E-rate program will match that, essentially increasing your discount (on the up-front construction costs only, not the MRC) by 20%. So if you have an 80% E-rate discount you will pay nothing for the special construction costs, if you have a 70% discount you will only pay 10%, and so forth. In order to access these funds:

  • You will need to follow the application process specific to your state. Links to this information can be found here.
  • On your Form 471, when you create your FRN for the special construction costs, you will be asked if state matching funds are available. Answer ‘yes’ and then upload the requested documentation. If you have not received approval for state match, upload a placeholder showing that you have applied; you will then need to provide proof of approval during the review process.
PREPARE FOR REVIEW

Once you have submitted your Form 471, unfortunately, it’s not yet time to relax. The next phase is the review process, when USAC’s Program Integrity Assurance (PIA) team reviews your form, asks you questions, requests supporting documentation, and ultimately sends you a Funding Commitment Decision Letter (FCDL). This letter, which is actually an email nowadays, lets you know if your funding has been approved or denied.

KEEP EVERYTHING
Make sure you retain all documentation, electronic and otherwise, related to your application. This would include:

    • Bid evaluation score sheets, notes, and memos.
    • School board minutes and records related to contract approval.
    • All correspondence with service providers.
    • ALL bids received, whether winning or losing.
    • Supporting documentation for your discount level (i.e. NSLP school lunch forms or surveys).
READ YOUR RAL: After submitting your Form 471 you will receive a “Receipt Acknowledgement Letter” (RAL), actually a message via the EPC system, confirming that your form has been submitted. Read this carefully! If you notice any errors in the data you submitted on your Form 471, the RAL gives you the opportunity to submit corrections before the PIA review process begins. This can speed up your review and get you your discounts much faster. You can see a list of what is correctable HERE.

BE AVAILABLE: At the beginning of your Form 471, there is a field that asks for “Summer Contact Information.” If you are going to take a much-deserved vacation, or be out of the office or away from your email for part of the summer, be sure and provide alternative contact information in this field.

If the PIA reviewer reaches out to you to begin the review process and does not receive a response, they will put a ‘summer hold’ on your application and it will not be looked at again until September. Furthermore, once the PIA process has started you definitely don’t want to be out of contact, as you typically only have 15 days to respond to PIA questions, after which they will simply review your application without the information they have requested – and usually deny it.

VIDEO

Here are some best practices to help you complete the FY2019 Form 471 application process.

Form 471 Tips

Information required to fill out a Form 471 such as service provider name, contract length, type of service, and the related costs can easily be found on the contract you signed. An important field for each funding request on your Form 471 is the narrative. This is where you can provide more details or relevant information for the services you are seeking that may not be clear in the other fields you must fill out. Providing more detail in the narrative box can help reviewers make a decision on your funding request much quicker. Additionally, there are a few other tips for the Form 471 that can save you a lot of time and frustration in the future. Read more about the Form 471 on the USAC website.

Include all necessary funding requests on the same Form 471

When your project requires multiple funding requests (for example, leased dark fiber service and the equipment to light it), all the funding requests need to be on the same Form 471. If you are not requesting funding for an expected component (for example, you already own the necessary equipment to place leased dark fiber into service), you should mention this fact in your narrative.

If you are requesting USAC will expect to see individual funding requests for the following on the same Form 471:
Leased Lit Fiber with special construction
  • Monthly recurring cost and any standard non-recurring cost if applicable
  • Special construction charges
Leased Dark Fiber without special construction
  • Monthly recurring cost for the lease OR non-recurring cost for the IRU fee
  • Network equipment to place the fiber into service
  • Maintenance and operations services if requested
Leased Dark Fiber with special construction
  • Monthly recurring cost for the lease OR non-recurring cost for the IRU fee
  • Special construction charges
  • Network equipment to place the fiber into service
  • Maintenance and operations services if requested
Self-Provisioned Fiber
  • Special construction charges
  • Network equipment to place the fiber into service
  • Maintenance and operations services if requested

Category 1 special construction details

When requesting any funds for special construction associated with an eligible Category 1 service, you will be asked to supply more details on the construction costs. It is extremely important to answer these questions accurately in order to save you time during PIA review.

Field Input Guidance
Total Project Plant Route Feet This measure only accounts for newly deployed fiber, and should not include any existing fiber. For example, if the total project covers 150,000 feet but 5,000 feet is existing infrastructure that will be spliced to the newly deployed fiber, the response to this field would be 145,000 feet.
Average Cost per foot of outside plant This will equal the “Total Special Construction Charges” divided by “Total Project Route Feet.” If total special construction charges are $5,000,000.00 for 145,000 feet special construction, then the response in this field should be $5,000,000.00/145,000 feet = $34.48/foot.
Total Strands Enter the total number of strands installed at the time of construction. For example, if the build is segmented into a backbone segment with a 48 strand cable and a lateral segment with a 12 strand cable, then the response for this field would be 60 strands. You can provide additional explanation in the narrative field.
Number of E-rate Eligible Strands Enter the total number of strands that will be lit within the current funding year and are for the exclusive use of eligible E- rate entities. Using the example above, if 12 strands are being lit in the backbone segment and 8 strands in the lateral segment for the exclusive use of the E- rate eligible entities, then the response to this field would be 20 strands. If this number is less than the number in Total Strands, you must have an ineligible cost listed on the funding request.

Category 2 allocations

When filling out the necessary information on your Form 471, it will ask you to list the Recipients of Service for each service you are requesting funds for. For Category 2 requests, it is extremely important to accurately list which schools will receive the listed service. Since Category 2 budgets are calculated per-school, incorrectly listing a school as a recipient of a funding request could deplete its budget for a purchase it is not receiving. While this type of error may be caught during PIA review, it saves time to make sure this is correct when the form is filed.


Reminder: you have to file separate Form 471’s for Category 1 and Category 2.


PIA Review

All E-rate funding requests undergo a review process known as Program Integrity Assurance (PIA) review before any funding commitments are made. This is a necessary part of E-rate to protect against waste, fraud, and abuse of program funds. If you are unfamiliar with the PIA review process, read more on the USAC website.

All requests that include special construction, as well as leased dark fiber requests with no special construction, undergo a more detailed PIA review. It is important to know that the review of your request will be much more involved than you may be used to and you will be asked for detailed documentation proving the most cost-effective solution was chosen. Knowing what to expect, having the information prepared, and providing it in a timely fashion will speed up the decision. Possible information requested may include:

  • Copies of bidding documents: RFP, amendments, and communication with vendors during the procurement process
  • Copies of all bids received
  • Proof that the most cost-effective solution was chosen: bid evaluations, reasons for bid disqualifications, explanation of cost comparisons
  • Excess strands and ineligible costs: how many fiber strands are being built, how many are eligible, and documentation showing proper cost-allocation of any ineligible costs
  • Maps of construction route and whether alternative routes were considered
  • Detailed, invoice-level pricing of construction costs:
    • Costs for ROW access, easements, permitting, surveys, environmental impact assessments, traffic control, construction labor, and testing
    • Quantity and costs of required OSP materials such as handholes, splice enclosures, and marker posts
    • Total footage and cost of fiber being installed
    • Percentage of the build that will be aerial and buried
      • Whether new or existing conduit will be used
      • Total footage and cost of new conduit
      • Whether new or existing poles will be used
      • Quantity and cost of new poles
      • Costs of trenching, boring, pole attachments, and pole make-ready
    • Explanation of special materials or procedures required, such as:
      • Galvanized conduit
      • Directional boring through hard rock or under a paved surface
      • An excessive number of handholes or marker posts
      • New pole installation
  • Proof that you have the necessary equipment to place leased dark fiber or self-provisioned fiber into service if you did not request new equipment for this purpose.
  • Proof that your solution will meet the long-term FCC bandwidth goals if you are requesting state matching funds.