Category 2 Bidding Rules/Options for PA Public Schools

November 17, 2025

~ C2 Eligibility and Form 470 Filing Guide Available ~
~ New C2 Funding Budget Cycle ~

~ General C2 Bidding Reminders ~

~ Bidding Options – Form 470/PEPPM Filing Info and Upcoming PEPPM Training ~

Category 2 (C2) E-Rate funding covers the equipment and related services that transport data within schools and libraries, subject to a 5-year budget cap.  The Category 2 competitive bidding rules/requirements for PA public schools are somewhat complex because there are state-specific laws in addition to E-Rate rules that must be followed.  The following information outlines the options and requirements for PA public schools (as I understand them) and hopefully provides you with a step-by-step path to ensure your E-Rate success.  A Category 2 Eligibility and Bidding Guide for Public Schools, providing complete details and step-by-step screenshots on how to complete Form 470, is available at: Category-2 Eligibility-Form-470-Bidding-Guide-Public-Schools-FY-2026.pdf. 

Important – If you are considering using the PEPPM Mini-Bid process, a training session has been scheduled for December 11th at 11:00 a.m.  To register, go to https://e-ratepa.org/?page_id=745.  See “Option 2:  Use the upcoming PEPPM contract”below.

Proposed Changes to FY 2026 Category 2 Eligible Services

  • The FY2026 Eligible Services List (ESL) has not been released yet, but the FCC has proposed Category 2 changes to move “Remote Maintenance Support” under Internal Connections starting in FY 2026!!  If approved:
    • Multi-year remote support licenses can be requested and reimbursed in the first year of the subscription/contract term.
    • Because renewal licenses for some equipment have mixed functionality, including both Right-to-Use (RTU) and Remote Maintenance Support, which have caused issues in the past, this is welcome news! 

New Category 2 (C2) 5-Year Budget Cycle Beginning

  • FY 2026 is the first year of the new 5-year Category 2 budget, which spans FY2026 – FY2030.   C2 budgets are calculated based on the new C2 multiplier ($201.57/student for schools and $5.43/sq. foot for libraries – or a minimum of $30,175/school or library). 
  •  Applicants will be required to validate their student counts or library square footage in the first year they apply for C2 support during the FY2026-2030 cycle.
  • The C2 budget is calculated based on the school enrollment or the library square footage that will be entered in a separate C2 field in EPC.  For schools, this is a different field from the enrollment used for discount calculations.  Schools may use the same C2 enrollment for the entire budget cycle or modify it if enrollment increases, allowing them to take advantage of the higher C2 budget.   

Reminder of Changes to the Form 470

  • Last year, the Form 470 had functionality added to allow RFP documents to be uploaded to an existing Form 470, even if no RFP document was originally uploaded.  The system will also ask if this is a substantial change. If you answer yes, the system clock will reset and extend your Allowable Contract Date by an additional 28 days.  Note: USAC considers most changes to a Form 470 or RFP a substantial change.  Find 470 > Related Actions > Add RFP Document
  • Functionality was also added in EPC to allow you to cancel an existing Form 470 as long as it has not yet been cited on a funded Form 471.  Find 470 > Related Actions > Cancel Form 470.

General C2 Bidding Reminders:   

  1. E-Rate rules require applicants that include a specific model number or manufacturer’s name to also include the words “or equivalent” on their Form 470 and RFP/PEPPM mini-bid documents and then evaluate equivalent products that are bid.  Applicants may state that such equipment must be compatible and interoperable with the school/library’s existing equipment (in which case the existing equipment should be identified).
  2. E-Rate rules require that any and all bid disqualification reasons be stated in the State and Local Procurement Requirements of the Form 470/RFP or PEPPM mini-bid documents.  Disqualification reasons must be yes/no (either the proposals complied or they did not).
  3. USAC requires applicants to consider all bids received up until the date you conduct your bid evaluation if your Form 470 or RFP/mini-bid does not list a specific due date.  Therefore, it is extremely important that you state a deadline for vendors to submit proposals (which, of course, must be on or after the 28-day waiting period).  I suggest the following language:  “Deadline for vendor proposals is [XXXXXXX] at noon.  We reserve the right to reject late-submitted proposals.  Proposals must be e-mailed to the Form 470 contact unless otherwise noted.”
  4. Because USAC requires a full 28-days after any new information is provided (including new information provided during vendor Q/A), I strongly recommend that applicants provide vendors with 2 weeks to ask questions, upload the answers to those questions to the existing Form 470 in EPC within 2 days, and then have the bid due date be 29-days after the questions are answered.  This will ensure full compliance with the E-Rate bidding rules.  For example, if you post a Form 470 on December 1, set the deadline for vendor questions to December 15. Issue answers to vendor questions (by uploading them with the existing Form 470/RFP in EPC) by December 17. Then, set the vendor bid due date to January 12.
  5. The FCC prohibits the use of Universal Service funding, including E-Rate funds, to purchase equipment and services from companies deemed a national security risk.  Be certain that you do not consider any proposals that include equipment on this list:  Covered List.
  6. E-Rate rules prohibit applicants from contacting potential vendors before bidding to seek an equipment list.  Service providers are allowed to answer general questions about the products and services they sell in response to applicant inquiries, but they may not prepare any part of an RFP or spec sheet/bill of materials that the applicant will use for conducting a competitive bid procurement.  Likewise, vendors are not permitted to provide sample Form 470 language.
  7.  Applicants must have a signed contract for all Category 2 funding requests before the Form 471 is filed.  This can be as simple as a signed vendor quote, as long as it contains this information:·      Contract signing date (must be on or before the Form 471 submission date).·       Term of contract (4/1/2026 – 9/30/2027 for internal connections purchases).·       List of equipment/quantities/prices (or services) and installation costs.·       Whether you want the equipment/services to be contingent upon E-Rate funding approval.
  1. Because the FY2026 ESL has not yet been approved, USAC recommends that, if requesting Remote BMIC Support/Renewal Licenses, continue to request the service under both Internal Connections (IC) and BMIC as a “just in case.”.  You can use the newer Category 2 Form 470 feature by clicking on the Basic Maintenance (BMIC) checkbox on the Internal Connections service request page, which will create both an IC and BMIC service request on the form.  The Category 2 Eligibility and Bidding Guide mentioned above will guide you through the steps.  However, for applicants seeking BMIC services for separate procurements (perhaps for existing equipment), the option still exists to create a separate BMIC service request. 

Public School Bidding Options: Public school entities have several bidding options, as outlined below.  Please pay careful attention to all of the requirements of each option (in addition to the list of requirements noted above).

Option 1:  File a Form 470 and issue an RFP:  The RFP must be uploaded into the Form 470 as the form is being created.  If needed, you can find two sample C2 RFP templates at Category 2 RFP – Sample 1 and Category 2 RFP – Sample 2.  If the cost will be greater than $23,80, the procurement must be advertised in at least two (2) local newspapers of general circulation once a week for three (3) consecutive weeks (concurrent with the Form 470 bidding period).  On the 29th day after the Form 470 was posted (or later), schools must select the lowest price bid among all qualified proposals (those that met the minimum bid requirements outlined in the RFP).  Under state law, schools are not permitted to consider other bid evaluation criteria besides price. Schools will then contact the winning vendor to obtain a draft contract document (or final quote with exact quantities) for the District to sign.  (For C2 Equipment/services costing between $12,600 – $23,800, schools may request written or telephonic price quotations from at least three bidders, in addition to the Form 470 bidding process.)  

Best Practice Timeline:  Post 470/File RFP by early December, conduct your bid evaluation in late December or early January, have your board approve the contract at their January or February board meeting(s), and file the Form 471 in early March.  

NOTE:  Prevailing Wage Act:  PA public school entities are required to comply with the Prevailing Wage Act for public works contracts which include ‘construction, reconstruction, demolition, alteration and/or repair work other than maintenance work, done under contract and paid for in whole or in part out of the funds of a public body where the estimated cost of the total project is in excess of $25,000.’  Maintenance work is defined as the repair of existing facilities when the size, type, or extent of such facilities is not thereby changed or increased.  In speaking with several knowledgeable school officials, they believe that structured cabling projects costing more than $25,000 would be required to comply with the Prevailing Wage Act.  You will want to check with your school district solicitor to determine if he or she believes the Prevailing Wage Act applies, and if so, be sure to obtain a Prevailing Wage Determination from the PA Department of Labor and Industry (Prevailing-Wage-App) and include this requirement and PW Determination in your structured cabling RFP/procurement.  (The federal Davis-Bacon Act does not apply to E-Rate funds.)

OR

Option 2:  Use the upcoming PEPPM contract and conduct a ‘PEPPM Mini-Bid’:  Public schools (and non-public schools and libraries that signed the PEPPM LOA) who choose to use the PA State PEPPM contract should NOT post a Form 470, but are instead required to conduct a ‘mini-bid’. 

NOTE: If you intend to use the PEPPM Mini-bid system as the procurement vehicle for your FY 2026 Category 2 equipment purchases, YOU CANNOT RELEASE A PEPPM MINI-BID TO VENDORS UNTIL AT LEAST JANUARY 2, 2026.  The reason is that the current PEPPM contract expires at the end of 2025, and the next contract will not become available for use until January 2, 2026.  Thus, no mini-bids can be issued to (what will be) the newly awarded vendors until at least that date.   In the meantime, please begin preparing your equipment lists so you can hit the ground running in January. 

As mentioned above, a training session has been scheduled for December 11th at 11:00 AM to prepare for the PEPPM Mini-Bid process.  To register, go to https://e-ratepa.org/?page_id=745.

The advantage of using the PEPPM procurement option is that it offers a shorter bidding timeline, and schools may consider other factors besides price.  The PEPPM Mini-Bid process is only to be used for equipment, licenses, and installation, not for structured cabling projects or MIBS-only related services.

If you have any questions related to the information contained in this message, please don’t hesitate to contact me at lgermann@e-ratepa.org.  BTW, if you haven’t done so yet, please add my email address to your safe list to ensure you receive my replies.

Sincerely,

Lorrie
—

Lorrie Germann
Pennsylvania E-Rate Coordinator
717-576-2737 – o
lgermann@e-ratepa.org
www.e-ratepa.org   

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