Answers to 9 Common Questions About E-Rate Contracts

When E-rate evaluations are complete and you’ve selected a vendor, the next step is putting pen to paper and signing a contract. Before you do, here’s a list of nine frequently asked questions about E-rate contracts and the answers that can make the process a lot easier.

blue question markDo I need my school board to approve anything prior to signing a contract?
E-rate rules require that applicants follow local requirements and local policy when it comes to contract approvals. If your school board requires its approval on all contracts, then the board must approve those contracts prior to signing and submitting Form 471. Some school boards have given superintendents or business managers delegated authority to sign certain contracts, and that’s permissible under E-rate rules.

blue question markDoes the vendor that I choose need to sign the contract?
While a vendor’s signature is not necessary unless state and/or local contract law includes this requirement, to assure that all i’s are dotted and t’s are crossed, the vendor should sign the contract as well.

blue question mark

Should I specify discounts or reimbursements in the contract?
While not a requirement, if you care about whether you pay your bill in full and seek reimbursement, or whether the vendor submits to you discounted bills, you should specify these terms in your contract. Most districts tell vendors the funding method they prefer after they receive their Funding Commitment Decision Letter (FCDL).

blue question markShould I include service upgrades in the contract?
Absolutely. The E-rate program has very strict rules regarding upgrading service or products. If your original Form 470 Request for Services included upgrade language―and if your contract includes language that permits such upgrades in the middle of the contract―upgrades will be much easier and you likely won’t have to repost a new Form 470.

blue question markShould I submit a copy of our contract with our Item 21 attachment?
No. You should submit a description/breakdown of the services contained in your contract and the contract pricing. You may be asked for a copy of your contract, but initially submitting a copy of your entire contract is not advised because the Schools and Libraries Program (SLD) has to review every line of every page that is submitted.

blue question markAre contingent contracts permitted?
Yes. Because the E-rate application cycle requires contracts to be signed months prior to the start of the actual funding year, the SLD accepts contingent contracts. The most common contingencies include those for E-rate funding or formal budget approval. Nevertheless, the SLD expects these contracts to be binding if these conditions are met.

blue question markCan I sign a contract that includes voluntary extensions?
Yes. A contract including voluntary extensions means that the contract expires at the end of its original term and may be voluntarily extended for a specific number of years. In order to take advantage of the extension years, the contract would have to include specific language describing the exact number of years that the contract can be extended.

blue question markIf I have a multi-year contract that contains voluntary extensions, what should I list as the contract expiration date on the Form 471, Block 5, Item 20b?
The contract expiration date should be the end of the initial contract, not the last possible date that the contract could expire. For example, if a contract were signed for three years, with two one-year renewal options, in Item 20b, you would list the end of the third year of the contract.

If you are exercising one of your renewal options and have signed an extension agreement, you should still list the original Form 470 number that was used to bid the service and the original contract signing date (not the date of the signed extension agreement).

blue question markCan I sign my contract before my 28-day waiting period expires?
No. You should pay careful attention to not sign a contract or select a vendor before the end of the 28-day Form 470 waiting period. The contract must be signed and the 471 application must be submitted on or after the Allowable Contract Date, which is basically the 29th day after the corresponding Form 470 is posted on the SLD’s website.