USACE-RateApplicant ProcessStep 2: Selecting Service Providers
State Replacement Contracts

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State Replacement Contracts

State procurement schedules sometimes do not coincide with the timeline for the Schools and Libraries (E-Rate) program application process. For example, a state may initiate or intend to initiate a competitive bidding process to replace an expiring state master contract with a new state master contract, but that process may not be completed before the application filing window closes.

If both states and applicants follow the guidance for the appropriate scenario below, applicants may request discounts under a state master contract that was competitively bid and put in place by a state government entity for use by others to replace an expiring state master contract.

We refer to a state master contract that replaces another state master contract as a state replacement contract.

Scenarios for State Master Contracts

There are two scenarios in which one state master contract can replace another:

  • Scenario A: The original state master contract expires after the application filing window closes but before the start of the funding year. Applicants intend to receive services during the funding year under a new state master contract that has not been awarded when the applicant files its application – the state replacement contract.
  • Scenario B: The original state master contract expires during the funding year. Applicants intend to receive services under the original state master contract for a portion of the funding year and under a new state master contract – the state replacement contract – for the remainder of the funding year.

Conditions That Apply to Both Scenarios

  • The state entity must have posted an FCC Form 470 to open the competitive bidding process that resulted in the original state master contract and must post an FCC Form 470 to open the competitive bidding process that will result in the state replacement contract. If the state does not file an FCC Form 470 for both competitive bidding processes, applicants will not be eligible for discounts for the services covered with the state replacement contract for the program year.
  • All E-Rate program rules continue to apply, in addition to any state procurement rules and regulations. However, for the state replacement contract, the FCC Form 470 will be posted outside of the usual timeframe during which these forms are posted.
  • The Billed Entity must file a funding request (identified by a Funding Request Number or FRN) for the state replacement contract on an FCC Form 471 before the close of the application filing window.
    • In Scenario A, the billed entity will file one FRN for the state replacement contract in order to cover service for the entire funding year.
    • In Scenario B, the billed entity will file two FRNs, one for the original state master contract for the part of the year covered by the original contract and one for the state replacement contract for the part of the year to be covered by the replacement contract, in order to cover service for the entire funding year.
  • For both monthly recurring charges (monthly charges such as internet access), and non-recurring charges (one-time charges such as installation), the amount of the funding request cannot be greater than the charges contained in the expiring state master contract. If the state replacement contract charges are different, they can be reflected in FCC Forms 471 filed in subsequent years.
  • If no provision was made in the original state master contract for non-recurring charges, you cannot request discounts on non-recurring charges under the state replacement contract for the funding year. You may request discounts on non-recurring charges for subsequent program years in subsequent FCC Forms 471 if the state replacement contract includes non-recurring charges.
  • If USAC issues the Funding Commitment Decision Letter (FCDL) before the service provider for the state replacement contract is chosen and the contract is signed, the Billed Entity should timely file the FCC Form 486 for the state replacement contract FRN using the state replacement contract Service Provider Identification Number (SRC SPIN) 143999999, and then request an operational SPIN change from the SRC SPIN to the SPIN (also known as the service provider’s 498 ID) of the chosen service provider.
  • The state and the Billed Entity must follow the step-by-step guidance outlined in either Scenario A PDF (opens in new window) or Scenario B PDF (opens in new window) as appropriate for the applicants to receive discounts under the state replacement contract for the funding year.