Gift Rules
E-Rate program rules impose significant restrictions on applicants and consultants regarding the direct or indirect solicitation or acceptance of gifts from service providers or prospective service providers. Gifts are defined as gratuities, favors, entertainment, loans, or any other thing else of value to or between anyone associated with the applicant or service provider.
The purpose of these restrictions is to ensure a fair and open competitive bidding process that is free from any conflicts of interest. Any soliciting, offering, acceptance, or receipt of gifts between involved parties is considered a competitive bidding violation that could put your E-Rate funding at risk.
There are limited exceptions to the gift prohibition, which mirror federal government regulations. Exceptions to the gift rule include items worth $20 or less. Applicants may not accept gifts with a retail value greater than $20, which include but are not limited to gifts for attending seminars; marketing calls; loans of products, including those characterized as on-site product demonstrations; services or equipment; or trainings.[1] For example, meals and/or prizes at conferences are permitted if they are worth $20 or less.
The combined value of items received by any individual may not exceed $50 from any one source per funding year (period from July 1 to June 30). “One source” includes all employees, officers, representatives, agents, independent contractors, and directors of a service provider.
You should also be aware of the prohibition on the provision of free services. Applicants and service providers are prohibited from using E-Rate program funds to subsidize the procurement of ineligible or unrequested products and services or from participating in arrangements that directly or indirectly reduce the applicant’s non-discount share of costs.
Service providers may provide charitable donations, as long as those contributions are not given to circumvent the competitive bidding rules, including requiring applicants to pay for their non-discount portion of eligible costs. For example, donations for literacy programs, scholarships, and capital improvements can be made as long as such contributions are not directly or indirectly related to E-Rate procurement activities or decisions.
Gifts from a service provider employee that are given to family or friends that work for a school or library must be purchased with the service provider employee’s personal funds (without reimbursement from the employer) and cannot be related to a business transaction or business relationship.
In addition, schools, libraries, and service providers remain subject to applicable state and local restrictions regarding gifts. To the extent that a state or local provision is more stringent than the FCC gift rule requirements, violation of the state or local restriction constitutes a violation of the FCC rule.
If applicants suspect a violation, they must promptly return the item, dispose of it, or pay the donor its market value. Applicants should keep a record of this return, disposal, or payment on file in case of future questions.
Restrictions on gifts apply all year, not just during the competitive bidding process.
View the Gift Rules video in the E-Rate Videos page.
[1] While the FCC waived certain of the provisions relating to the provision of free products and/or services during the pandemic, those rules expired June 30, 2022. See Petition for Waiver of Comcast Corporation for Lift Zone Initiative, CC Docket No. 02-6, Order, 36 FCC Rcd 14349 (WCB 2021).