Form 471 Filing Guide – Category 2 Services

February 5, 2018

Attached: Form 471 Category 2 Filing Guide FY 2018

~ PIA already reviewing submitted 471s – including C2! ~
~ Bulk Upload Guide Coming Next ~
~ Be Sure to Read Helpful Hints below ~

CATEGORY 2 FILING GUIDE

Category 2 is the E-rate funding mechanism designed to fund networking equipment and infrastructure within a school or library building.  All eligible requests that have followed the proper bidding rules will be funded, regardless of E-rate discount, up to a building’s 5-year pre-discount cap.  Attached you will find the FY 2018 Category 2 Form 471 Filing Guide, containing 108 slides, walking you through three funding requests as follows:

• Wireless Equipment – 2 line items – WAPs/Controller (starts on slide 19)
• Network Switches – 1 line item (starts on slide 53) – Note:  most switch FRNs will have multiple FRN Line items.
• Structured Cabling – 1 line item  (starts on slide 76)

WHAT’S NEW RELATED TO CATEGORY 2 FORM 471 FILINGS FOR FY 2018

• Service Start Date Must Be 7/1/2018 – Unlike previous years, the Service Start Date must always be July 1, not April 1.  Equipment is allowed to be purchased on or after April 1, and vendor invoices also may be dated on or after April 1.  But on the Form 471, where it asks for the Service Start Date, leave it populated to be 7/1/2018.  Note:  The Service Start Date is not the same as the Contract Award Date; the Contract Award Date is what you provide in the Contract Record as the date you signed the contract.
• New Version of Category 2 Bulk Upload Template – The optional Bulk Upload Template is identical to last year except they added several vendors to the drop down choices.  The updated template is Version 18.0.  The Bulk Upload process is most useful for C2 Internal Connections FRNs with multiple line items or multiple recipients of service.  Version 18.0 Template available at: https://www.usac.org/_res/documents/sl/xls/window-hq/Category-Two-Internal-Connections-v18.0.xlsm.
• Form 470 Error Checking – Just like a Category 1 Form 471, when an applicant cites a Form 470 #, the system will check for the information from that form to ensure that it meets the minimum requirements for the FRN being filed.  Specifically:  System will check to see if the cited Form 470 contains the category of service requested on the 471 (for example, if you are requesting Basic Maintenance funding, but did not select this category on the 470, system will not allow you to proceed).  Also, the system will check to see if the cited Form 470 in the Contract Record was been posted for at least 28 days (for example, if you are creating your Contract Record on February 15, but the Form 470 # that you cite was just posted on February 1, the system will not allow you to proceed).

HELPFUL HINTS FOR FILING THE FORM 471

1. Multi-Year Product Licenses Eligibility

Product licenses are E-rate eligible and should be requested as Internal Connections on the 471.  The full cost of a multi-year license may be requested upfront in the year it will be purchased, even if the number of license years exceeds the number of years remaining on a school’s C2 budget.  Request the license as if it is the piece of equipment belonging to the license, and then list the license SKU in the ‘Model’ field.  That way the PIA reviewer will know it is for a license and not the actual product.

2. Basic Maintenance Services Are Not Considered Licenses

Be careful not to mistaken maintenance services as product licenses.  Also, E-rate rules do not permit the requesting of multi-year maintenance services in a single year – these must be amortized and requested in the funding year for which the service covers.

3. Ignore the “View Category 2 Budget Information” in the Form 471

On the Main FRN Page of the Form 471, there is a link in the top right corner of the page “View Category 2 Budget Information”.  The data contained in that link is inaccurate and will only confuse you.  A more accurate tool is available at: https://sltools.universalservice.org/portal-external/budgetLookup/ except that it does not contain the updated enrollments you listed in EPC during the FY 2018 Admin Window.

4. Have Structured Cabling Contracts be Single Priced

For structured cabling, try to have your vendor contracts be for a single price, by building – not broken down by widget.  Then just create 1 FRN Line Item in the Form 471.  Vendor invoices, therefore, also should have just a single price, by building – not broken down by widget.

5. Break Out All Components into Separate FRN Line Items – Including Switches

If your Category 2 request contains multiple components, you must create a separate FRN Line Item for each component (model), and then show the # of units, the cost per unit, and which schools will be using the equipment.  For example, a common mistake applicants make is to request just a single FRN Line Item for switches, with a single SKU.  Then during USAC invoicing, the invoices are denied because the individual components were not listed/approved on the Form 471.

6. Break Out Ineligible Costs of Firewalls

Firewalls often have ineligible components, such as the anti-virus, anti-spam, and filtering modules/software, and the costs of these ineligible items cannot be included on the FRN.  If the firewall is sold as a bundled package from the manufacturer, the vendor must give you a % eligibility for the bundle to account for the ineligible components/features bundled with the eligible equipment.

7. Category 2 Contract Requirement

All Category 2 purchases require a signed contract prior to submitting the Form 471.  This can be as simple as signing/dating the vendor contract, and including the contract term and any funding contingencies.  Before starting your Form 471, upload the signed contract into EPC.  Landing Page > Name of District > Contracts > Manage Contracts.  The Contract Module Guide can be found at: https://e-ratepa.org/?p=24081.  The PEPPM Contract Module Guide can be found at: https://e-ratepa.org/?p=24161.

8. Wisely Allocate C2 Budgets for Shared Equipment

If a piece of Category 2 equipment is shared by two or more schools, the cost of the equipment must be allocated from the C2 budgets of the schools sharing the equipment (core switches and wireless controllers are good examples of shared equipment).  Deciding which cost allocation method to choose — and making sure you do so correctly on your Form 471 — is important.  You can either 1) allocate the costs equally (the same amounts) from each school’s C2 budget that is using the equipment, or 2) allocate the costs on a weighted basis.   The second option requires some off-line math to be done, but it allocates more funding from the schools that have larger C2 budgets which may be advantageous to you.  Here is a Guide to help you figure out the cost allocation guidelines/math for shared equipment – https://e-ratepa.org/?p=12651.

9. Caution if Using “Copy FRN” Feature

I’ve recently worked with several applicants having trouble submitting their FY 2018 Form 471s and the commonality seems to be whether they used the Copy FRN Feature.  Therefore, starting now, I won’t recommend that applicants use this feature when creating their Form 471 FRNs for FY 2018.  Note: If you’ve already created an FRN using the Copy FRN feature, and if you encounter a problem, delete the FRN and start over.

If you have any questions as you’re working through your Form 471, please don’t hesitate to e-mail me at jtschell@comcast.net.

Happy 471 Filing!

— Julie

Julie Tritt Schell
PA E-rate Coordinator
717-730-7133 – o
717-730-9060 – f
jtschell@comcast.net
www.e-ratepa.org

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