Here’s a story that may help others avoid a pitfall as they prepare for the next round of putting telecommunication services out for bid.

There is a library in a small Illinois town, whose name and location shall remain unidentified.  The money saved by receiving the E-Rate discount has allowed a balanced budget in the last few years for this library.  The director fills out all the E-rate paperwork herself.  As she went through the Form 470, she came to an optional question for naming a technology contact.  Because she knows very little about technology and her LAN, she wrote in her current vendor’s name and contact information.  She opened the only bid responce herself, alone in her office.

The FCC and USAC/SL have had cases of fraud and collusion where a vendor filled out or helped fill out the Form 470 putting other vendors at a disadvantage in the bidding process.  Clearly, a prospective vendor could get biased information if they contacted the current vendor for technical information.  The FCC has ordered that putting a vendor on a Form 470 is a “fatal error” in an E-Rate application because it indicates that an open competitive bidding process did not take place.

Our small town librarian is now faced with not receiving a discount in the coming funding year, trying to make budget cuts to cover higher telecommunications costs, and trying to find some way to repay the discounts received in the previous two funding years when she made the same error.

Please note that a vendor should never, never be identified on a Form 470 for any reason. This is one of the Top 10 Reasons for denial of e-rate funding. Here is the full list:

1. Ineligible products and services
2. Contracts not signed or not in place
3. Unauthorized consortium members
4. Insufficient documentation
5. Insufficient support resources
6. Form 470 not filed
7. Competitive bidding violations
8. 28-Day Rule violations
9. Invalid telecom provider
10. Form 470 not certified or certified late

You can find more detailed explanation of these in “Common Reasons for E-Rate Funding Denials.”