Transcript Priority 2 Funding: An Applicant’s Guide - E-Rate

Priority 2 Funding:
An Applicant’s Guide
Presented by:
Julie Tritt Schell
PA E-rate Coordinator
January 2012
Agenda
•
•
•
•
•
•
•
•
•
•
•
•
•
What is Priority 2 Funding?
Eligible/Ineligible Locations
What Equipment/Services are Eligible/Not Eligible
Basic Maintenance
Cost Allocation
Technology Plan Requirement
2/5 Rule
State Master Contracts and Guidelines
Service Substitutions
Equipment Transfer and Disposal Rules
Deadlines and Invoicing
Maximizing Discounts
Most Common Mistakes
2
What is Priority 2 Funding?
• Applicant demand for E-rate funding exceeds available resources ($2.25
billion, + inflation adjustment)
• FCC created two priorities to determine which requests would receive
funding
– Priority 1 – Telecommunications Services and Internet Access
• Provided to all eligible entities, at all discount levels
– Priority 2 – Internal Connections/Basic Maintenance of Eligible
Internal Connections
• If funding remains after Priority 1 requests are awarded, then Priority 2
requests are funded, beginning with the 90% discount requests, then
89%, 88%, etc. until all funding is exhausted for that year
3
Eligible/Ineligible Locations
• School and library buildings are eligible for Priority 2 funding
• Support is NOT available for P2 funding in non-instructional school
buildings or in separate administrative buildings of a library, unless those
internal connections are essential for the effective transport of
information to an instructional building of a school or to a nonadministrative building of a library
– This means... Non-Instructional Facilities (NIFs) that house the network hub
are eligible for Priority 2 services and equipment
– Administrative buildings that are NOT the network hub are not eligible for P2
funding
4
Should I Apply for P2 Funding?















FY 1998 -- funded to 70%
FY 1999 – all funded
FY 2000 – down to 82%
FY 2001 – down to 87%
FY 2002 – down to 81%
FY 2003 – down to 70% - $500M rollover
FY 2004 – down to 81%
FY 2005 – down to 80%
FY 2006 – down to 86%
FY 2007 – down to 81% - $650M rollover
FY 2008 – down to 87% - $600M rollover
FY 2009 – down to 77% - $900M rollover
FY 2010 -- all funded - $1.15B rollover + inflation
FY 2011 – down to 90% so far - $850M rollover + inflation
FY 2012 -- ?
5
Eligible Equipment & Services
Consult Eligible Services List for comprehensive information. In summary:
•
•
•
•
•
•
•
•
•
•
•
•
•
Network and Phone Cabling
Routers
Hubs
Switches
Wireless Access Points/WLAN Controllers
PBXs (Private Branch Exchanges)
Firewalls
GBICs and modulating electronics to light fiber
Voice/Video Over IP Equipment
Certain Network Servers
UPSs connected to eligible equipment
Equipment racks housing eligible equipment
Installation of eligible equipment and cabling
–
•
Only by outside vendor; school/library staff salaries not eligible
Training for equipment use
6
Ineligible Equipment
• Any end-user equipment (phones, fax machines, computers, cameras)
• Security equipment/cabling
• Remote access components
7
Eligible Servers
An eligible server must serve as a conduit for information rather than as a
source for content. If servers are used for both eligible and ineligible
purposes, the ineligible portion must be cost allocated.
• One monitor per eligible server or other eligible component requiring a
visual display is eligible for discount.
• Eligible Servers:
–
–
–
–
–
Dynamic Host Configuration Protocol (DHCP) Server
Domain Name Service (DNS) Server
E-mail Server
Firewall, or Proxy Server
Terminal Server, but not eligible as a source for ineligible software applications or
other ineligible uses.
– Web Server, but only eligible if used to display content to users of the Internet. Not
eligible as a source for software applications, database functions, or storage of
end-user files
8
Ineligible Servers
•
•
•
•
•
Storage servers
Application servers
Cashing servers
Print servers
Any server that is used for storage of application software, databases
accessed by end users, or end-user files other than e-mail files
• End-user computers/laptops even if they also provide server functionality
9
Eligible Software
• Virtualization software that is a server based, shared product is eligible if
used for an eligible server function. Voice mail software
• Operating system software
• Client Access Licenses for eligible equipment
• VOIP licenses
10
Ineligible Software
•
•
•
•
•
•
Security/Utility software, such as anti-virus and anti-spam software
Application software
Network management software
End-user software such as curriculum & productivity software
Filtering software
If such a software product is used for or provides substantial ineligible
functionality, such as archiving, applications, network management, a cost
allocation to remove the ineligible functionalities is required.
11
Limited Training
• On-site training is eligible as a part of installation services but only if it is
basic instruction on the use of eligible equipment, directly associated with
equipment installation, and a part of the contract or agreement for the
equipment
• Training must occur coincidently or within a reasonable time after
installation
• End-user training, such as training of teachers, is not eligible
12
Installation/Configuration
• Eligible:
– Installation, activation, and initial configuration of eligible components are
eligible if they are part of a contract or bid for those eligible components
– Such eligible services may include basic design and engineering costs and
basic project management costs, if these services are provided as an integral
component part coincident with installation
• Ineligible:
– Initial planning to determine the technology and/or components to be
deployed
– Network architecture design
– Development of technology plans
– Construction costs, other than incidental charges to restore a facility to preinstallation conditions
13
Distance Learning Equip - Eligible
• Centralized video equipment necessary to transport information to the
individual classrooms or public areas of a library is eligible, including:
–
–
–
–
–
–
–
–
CODEC
Master Control Unit
Multipoint Control Unit
PVBX
Video Amplifier
Video Channel Modulator
Enhanced Multimedia Interface
Equipment that is used to control the programming, distribution, and
selection of video content may be eligible, if used in the transport of
information to individual classrooms or public areas of a library
14
Distance Learning Equip - Ineligible
• End-user video equipment and equipment for the creation of video
content is NOT eligible for discount, including:
–
–
–
–
–
Video monitors
Televisions
Video cameras
Video recorders and playback devices
Broadcast and cable television equipment used for the display or distribution
of broadcast and cable television signals
15
Basic Maintenance
• Considered a recurring service and must be delivered July 1 – June 30
– Does not align with the equipment purchase, but with the funding year
– If you don’t use the funding by June 30 of that funding year, the funding is lost
– 2/5 rule does not apply to basic maintenance requests
• Beginning with FY 2011, maintenance severely curtained
• Eligible:
– Bundled manufacturer warranties up to 3 years
• Cannot have separate price
– Software patches, online tech support
• 100% of cost paid
– Break-fix and labor costs
• Only actual labor and replacement costs will be paid
• Ineligible:
– Unbundled warranties
– Insurance-type warranties, including Smartnet
16
Basic Maintenance
Service
Contract
Calculating Request
USAC Will Pay...
Bundled Warranties
Must be included with
cost of service
No separate funding
request
N/A
Break/Fix and
Associated Labor Costs
Contracts must state the
eligible components
covered, make, model
and location. Eligible and
ineligible equipment
must be listed separately
Must be based on an
estimated number of
maintenance hours per
year and/or cost of
replacements for eligible
equipment, based on
current life of equipment
and history of needed
repairs
USAC will only pay for
cost of actual work
performed (which
includes labor,
equipment fix, or if it is
beyond repair,
equipment replacement).
Actual vendor invoices
must be submitted with
BEAR or SPI to prove
costs incurred
Software Upgrades and
Patches, Security
Upgrades and Patches,
and Online and Phonebased Tech Support
Contracts must state the
eligible components
covered, make, model
and location. Eligible and
ineligible equipment
must be listed separately
Should be based on
actual amount of
contracted service
100% of costs will be
paid without
demonstration that work
was performed
17
Cost Allocation
• Cost allocation required when:
– Equipment contains an eligible and ineligible component
• Example: VOIP equipment contains remote access functionality
– Equipment performs an eligible and ineligible service
• Example: Server performs e-mail and e-mail archiving functions
– Equipment is shared between eligible and ineligible entities
• Example: Diocese VOIP equipment used by Diocese offices and schools
• Cost allocation methodology must be based on tangible criteria that
provide a realistic result
– Many different ways to perform cost allocation
18
Technology Plan Requirement
• Technology plan required if applying for P2 funding
• Must include four SLD technology plan criteria
–
–
–
–
Goals and Strategies for using technology
Needs Assessment
Professional Development
Evaluation
• Must align with funding requests and bidding documents
• Must be “written” before 470 is filed
– Or, if purchasing from PEPPM, must be written before 471 is submitted
• Must cover full 12 months of NEXT funding year and must include dates
• Cannot be for longer than 3 years
19
Technology Plan Approvals
• Must be approved by USAC ‘certified’ approver
• Public schools – PDE approves
– PDE requires submission by Sept. 30 for plans expiring June 30, 2012
• Submissions still being accepted
• Nonpublic schools – Various entities approve
– List on SLD website
– CAIU 15 will approve if no organization on the SLD list represents your entity
• Libraries – Commonwealth Libraries approves
20
When Posting a Form 470...
• Be sure to be specific about the equipment and services you want
• Beginning with FY 2013, applicants will be required to be vendor neutral
or request equivalent product bids
– For example, Cisco 4500 switch or equivalent
21
2/5 Rule
• A school or library entity may only receive discounts 2 out of every 5 years
(on a rolling basis) for internal connections
– Doesn’t include basic maintenance
– 2 years also known as ‘strikes’
• Applies at the building level, not district level
• If central equipment is purchased for network hub, each building receiving
benefit of that equipment receives a strike
– Example: If server is placed in data center and serves entire district, then all
schools would receive a strike that year
– Plan accordingly to maximize discounts
22
2/5 Rule
• A ‘strike’ is incurred when funding is committed, not when a 471
application or invoice is submitted
– An applicant may cancel an FRN to get a strike (year) back, but not after
funding has been disbursed
– An applicant also can cancel funding at the building level to get a strike back
• Refer to http://www.usac.org/sl/tools/newsbriefs/preview.aspx?id=79&WT.mc_id=sl-newsbrief-20070420 for
instructions
• Hint: Don’t use a strike for a $300 piece of equipment
• USAC’s 2/5 Tool can help keep track of schools’ strikes:
http://www.usac.org/sl/tools/search-tools/two-in-five-tool.aspx
23
Using State Master Contracts
• Applicants may use a State Master Contract (SMC) without posting their
own Form 470 to purchase E-rate eligible equipment, as long as that SMC
was competitively bid using an E-rate Form 470 and otherwise complied
with all E-rate competitive bidding rules
• The DGS Co-Stars Contract does not award contracts to vendors based on
price as the most heavily weighted factor and therefore is not E-rate
eligible
– Schools and libraries may post their own Form 470s and use the Co-Stars Contract
as a bid response
– In this situation, a signed contract would be required before the 471 is submitted
• The State PEPPM Contract, administered by IU 16, has complied with the
Form 470 and E-rate bidding requirements
– Therefore, schools and libraries may skip local 470 posting and purchase directly
from PEPPM for P2 equipment and services
– No separate contract is required because the PEPPM contract is considered the
contract (but vendor price quote is required)
24
Using PEPPM for P2 Purchases
• Instructions:
– Obtain written quote from PEPPM vendor(s) for products/services
needed
• Quote must be dated before Form 471 is submitted
• Quote must be on vendor letterhead
• Quote must identify equipment/services by building
– Use vendor quote as basis for funding request and Item 21 attachment
on Form 471
• E-mail with details of which Form 470 number/contract signing dates should be
used is sent to PA E-rate listserve each January
– If purchase IS contingent upon E-rate:
• After FCDL is issued, school should issue a purchase order to the vendor
• P.O. may be for full price or non-discounted price
– If purchase is NOT contingent upon E-rate:
• School may issue P.O. to vendor anytime on or after July 1, 2012 to purchase
equipment
• P.O. should be for full price if E-rate funding has not yet been awarded
– School will then submit a Form 472 BEAR to collect E-rate funding after FCDL arrives
25
Service Substitutions
• Service substitutions required when a change is made to any piece of
equipment that was listed on your Item 21 attachments and approved
• Substitutions can only be requested after FCDL issued
• Must meet these conditions:
–
–
–
–
Services or products have the same functionality as the services or products contained in the original
proposal. For example, these service substitution requests meet the requirement for same
functionality:
• A network switch for a network router (Function: "data distribution")
• A UPS for a tape backup (Function: "data protection")
• A telephone key system for a telephone PBX (Function: "telephony")
Does not violate any contract provisions or state or local procurement laws.
Does not result in an increase in the percentage of ineligible services or functions.
The requested change is within the scope of the controlling FCC Form 470, including any Requests for
Proposal, for the original service.
• Good idea to seek approval PRIOR to doing substitution in case it’s not
approved by SLD
• Can’t request more funding
• Can change quantities, model numbers, equipment as long as it meets the
above criteria
26
Transfer/Disposal of Equipment
• E-rate-funded equipment must remain at approved site for 3 full
years from date of installation
• After 3 years, equipment may be moved to another eligible location
– Documentation must be retained describing transfer
• If school or library closes, equipment may be moved to another
entity, regardless of discount
– Must send letter to USAC outlining closing of school and transfer of equipment
– Must keep documentation regarding transfer for 5 years
• After 5 years, equipment may be disposed of or sold
– Disposal does not need to be reported to USAC
– Proceeds from sale do not need to be returned to USAC
27
Deadline to Use Non-Recurring Funds
Depends on when you get funded...
– IF your FCDL is dated before March 1:
• Deadline to have equipment delivered (or vendor installed if installation is
included) is September 30
• For example, for FY 2012, a 12/1/2012 FCDL date would have a deadline
of 9/30/2013
– IF your FCDL is dated on or after March 1:
• Deadline to have equipment delivered (or vendor installed if installation is
included) is September 30 of the FOLLOWING year
• For example, for FY 2012, a 4/1/2013 FCDL date would have a deadline of
9/30/2014
28
Deadline to Use Recurring Funds
• Priority 2 Basic Maintenance is considered a ‘recurring charge’
• All recurring charges must be used during the July 1 – June 30 funding year
• It doesn’t matter if you requested funding for maintenance on equipment
that was funded after June 30...
• Maintenance doesn’t follow the equipment deadlines... It must be used
during the actual E-rate funding year
29
Deadline to Invoice
Depends on when you get funded...
– IF your FCDL is dated before March 1:
• Deadline to submit invoice to USAC is January 28 (120 days after last day
to receive equipment/service)
• For example, for FY 2012, a 12/1/2012 FCDL date would have an
installation deadline of 9/30/2013, and an invoice deadline of 1/28/2014
– IF your FCDL is dated on or after March 1:
• Deadline to submit invoice to USAC is January 28 of the FOLLOWING year
(120 days after last day to receive equipment/service)
• For example, for FY 2012, a 4/1/2013 FCDL date would have an
installation deadline of 9/30/2014, and an invoice deadline of 1/28/2015
30
Leasing of Priority 2 Equipment
• Leasing of Priority 2 equipment from a vendor is not permitted
• If the school or library takes out a loan and pays the vendor in full, and
then repays the loan over several years, this is permitted as long as it can
be shown that the school or library paid the vendor in full at time of
equipment purchase
– (Priority 1 VOIP Leasing Note: Leasing of ineligible equipment as part of a
hosted VOIP service does not make that ineligible equipment eligible)
31
How to Maximize Discounts
• Applicants permitted to ‘bundle certain schools’ on an FRN to obtain a
high blended discount rate
– This is risky
• Apply for 90% schools, 80% schools, etc. to ensure the funding of at least
the 90% schools
• If your district’s blended discount rate is 68%, but you have one 90%
school and one 80% school, don’t apply for all schools together using the
68% discount rate
– Disaggregate and apply for the highest discount schools individually
32
Contract Suggestions
•
•
•
•
•
Specify make, model and school location of equipment
Specify whether warranty is included
Specify whether training is included
Specify whether installation is included
Be sure to have it expire September 30, 20XX to align with E-rate
installation deadline for non-recurring services
• Specify that applicant may extend contract to align with E-rate installation
dates should FCDL be issued late
33
Step-by-Step – Local 470
•
•
•
•
Develop technology plan
Determine 2/5 approach
Decide whether to post 470 or purchase from PEPPM
If posting own 470 (by February 21):
–
–
–
–
–
–
–
–
–
–
Be specific in equipment/service requests
Obtain vendor proposals
Do bid evaluation
Sign contract (which can be signed vendor quote)
Submit 471 by March 20
After FCDL received, submit service substitution if needed
Issue PO to vendor
Submit Form 486 listing PO or shipping date as service start date
Receive, label and install equipment
Submit BEAR if paid in full. Vendor submits SPI if school only paid nondiscounted portion
34
Step-by-Step – Using PEPPM
•
•
•
•
Develop technology plan
Determine 2/5 approach
Decide whether to post 470 or purchase from PEPPM
If using PEPPM 470:
–
–
–
–
–
–
–
–
–
–
Review PEPPM website to identify awarded vendor
Contact PEPPM vendor to request written quote by building
Obtain correct PEPPM 470 information from January e-mail
Be sure technology plan is ‘written’
Submit 471 by March 20
After FCDL received, submit service substitution if needed
Issue PO to vendor
Submit Form 486 listing PO or shipping date as service start date
Receive, label and install equipment
Submit BEAR if paid in full. Vendor submits SPI if school only paid nondiscounted portion
35
Most Common P2 Mistakes
• Putting P2 requests on P1 Form 471 application
– This becomes a polluted application and delays all funding
•
•
•
•
•
•
•
•
•
Putting different discount P2 requests on the same 471 application
Not using “or equivalent” language on 470
Missing installation or delivery deadlines
Not getting vendor quote from PEPPM before submitting the 471
Not signing a contract before the 471 is filed if NOT purchasing from
PEPPM
Believing Co-Stars is an E-rate eligible contract
Not notifying USAC of equipment transfer from closed school
Not labeling equipment with Funding Year and FRN
Not submitting a service substitution request when different equipment is
being purchased
36
Resources
• Cisco E-rate Eligibility - http://www.ciscoerate.com/
• E-rate Eligible Services List http://www.universalservice.org/sl/tools/eligible-services-list.aspx
• PEPPM PA - http://www.peppm.org/pa/default.htm
• PA E-rate Website:
http://e-ratepa.org/state_contracts.htm
37
Questions?
38