How the E-rate Process Works

Successfully navigating the E-rate process can save your school thousands of dollars.

Even schools with limited financial resources can accomplish their technology goals by successfully navigating the E-rate process. In addition to receiving a discount on eligible services, schools can use the process to refine their educational technology goals and work with individual service providers to craft a bid that meets their unique needs.

From internal connections and switches to routers and other expensive technology infrastructure, E-rate allows schools to build the architecture of their educational technology program at a fraction of the regular cost and, therefore, frees up school funds to cover other educational priorities such as curriculum, classroom libraries, and professional development offerings. Below, we outline the broad steps in the E-rate application process, as well as discuss the benefits of working with an experienced E-rate consultant who can help ease the program’s administrative burdens. 

First, the school files a Form 470 and, potentially, a request for proposal.

Form 470 describes the list of eligible services requested by the school. In addition to Form 470, some local procurement rules may require an additional request for a proposal document, which either the school or E-rate consultant (on behalf of the school) must craft prior to the start of the bidding process.

The Universal Service Administrative Company (USAC), the agency that oversees the E-rate process, will then acknowledge receipt of the form and post it publicly for prospective service providers, who may then bid to fulfill the school’s requested services. Crucially, schools must ensure that the bidding process is open and fair to all applicants, even if the school has worked with one or more of the providers in the past. Preferential treatment from one vendor over another can complicate the bidding process and lead, potentially, to sanction by USAC.

At least 28 days later, the school selects its service provider.

Once the bidding process closes, schools can evaluate each of the submitted bids and determine which service provider will best meet their needs for the upcoming year. In making its determination, schools must primarily consider cost, which must be weighted more heavily than any other single factor.

To demonstrate full and fair consideration of each bid, schools must construct an evaluation that evidences their decision-making process. The school may, for example, create a five-category list and rate each provider within each category, one of which must still be cost-effective. USAC provides a number of resources, including a sample bid evaluation matrix, that can help schools craft an evaluation system. 

Next, the E-rate process allows schools to apply for discounts by filing Form 471.

This step in the E-rate process is crucial to realize the cost-savings benefits of the program. After selecting a service provider via a competitive bidding process, schools then file a Form 471 with USAC that identifies their selected service provider, as well as each of the services for which it is requesting a discount. 

The information required for each requested service is fairly specific and must include a description of the school’s internet access, connections and speeds; a list of any required technical equipment; the service provider’s name and service provider identification number (SPIN); the contract number and contract specifications, and the start and end date of the requested services, among other items. 

Form 471 certification is followed by USAC’s application review period. 

Once the school files its Form 471, USAC then conducts both an initial and final review of the school’s application. During this period, reviewers may reach out to the school for answers to questions on topics ranging from the bidding process itself to the description of the services the school is requesting. 

The school has 15 days to respond to any questions from the agency, but timeliness is key: the longer the school waits to respond to reviewers’ inquiries, the longer before the invoicing process can begin. As a result of the review process, schools may be forced to alter information in their applications before receiving approval. 

Once services start, the school must file a Form 486 before invoicing can begin.

The E-rate process continues with the filing of Form 486 that informs USAC that, first, all services for which discounts have been approved have begun and, second, that the school is in compliance with the Children’s Internet Protection Act (CIPA). During the bid evaluation process, schools should ask prospective service providers how they can assist the school with CIPA compliance. Including this metric in the evaluation process can facilitate the later filing of Form 486 and, ultimately, shorten the time between the start of any requested services and the USAC invoicing process.

Form 486 must be filed no later than 120 days after services begin. Once it’s received, USAC will then issue a Form 486 notification letter to the school and its selected service provider, either of whom can then begin invoicing USAC for the discounted costs of any approved services.

At this point, schools and service providers have two invoicing options.

If schools pay the service provider the full cost of their requested services and want to be reimbursed for the discounted amount, they can file the Form 472 or Billed Entity Applicant Reimbursement (BEAR) form. USAC will then review the form and, if approved, issue the reimbursement directly to the school’s bank account.

Alternatively, service providers can bill schools for the discounted amount of the services and then seek reimbursement from USAC themselves. Under this scenario, service providers file a Form 474 (Service Provider Invoice Form), which USAC reviews and then uses to issue a reimbursement. 

USAC may ask for documentation supporting that either the school has paid for the full cost of its requested services or, alternatively, that the service provider has billed the school for the discounted cost.

Using an E-rate consultant can greatly reduce the administrative burden on schools.

While successful navigation of the E-rate program can save schools thousands of dollars each year, the application process itself can prove burdensome. Because of this, many schools choose to hire an E-rate consultant who shepherds their application through each stage of the process, advises school leadership on what they should bid for, and drafts any required correspondence between the school and USAC. 

Perhaps most importantly, an E-rate consultant ensures the school meets all required application deadlines and takes advantage of changes to the program, such as increased Category 2 funding, that can positively impact schools’ bottom line. 

At CTS, we help our partners execute their E-rate bids and further their unique missions.

Our team has worked with more than 60 schools across the United States to successfully fulfill their E-rate bids. Once selected by a school, we work with leadership teams to develop custom project plans that ensure a successful, timely implementation of any E-rate deliverables. Contact us today to learn more about our E-rate services and how we can help your school accomplish its unique mission.

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