General Questions Received by E-mail
Q. During the 2004 funding year, were there
any Internal Connections services that were considered "Recurring
Services?" When an FCDL is received after March 1 of the funding
year, why else would the invoicing department attempt to daily-cost the
service from July 1, 2004? Greg Argendeli
A. It is important to note the distinction between recurring
and non-recurring services. Any items requested and approved as recurring
services — that is, services with charges entered on Form 471, Item
23E of the funding request are considered recurring services during subsequent
invoice review. (Charges for non-recurring services are entered on Form
471, Item 23H of the funding request.) Thus, if an applicant characterizes
Internal Connections as recurring services, those services must be delivered
by June 30 of the funding year, with no extensions allowed. Consistent
with the FCC’s 2006 Eligible Services List, USAC considers Basic
Maintenance of Internal Connections to be recurring services, and may
pro-rate an annual fee for basic maintenance if the start date for discounted
services is after July 1 of the funding year. Also, if the Form 486 is
filed late, USAC adjusts the service start date to 120 days before the
date the form is postmarked or certified online.
Q. Regarding Basic Maintenance services on Internal Connections:
• Please describe the Service Provider's accountability
in providing these services.
• What type of reporting mechanism should we be providing to the
billed entities, if any, for the basic maintenance services we provide
on their eligible products? Should we provide specific information in
the form of logs to them?
• What is the proper format a Service Provider should use when quoting
basic maintenance agreements?
• Should a billing rate per hour and specific number of hours for
the funding year be provided? Or should a flat amount be quoted for the
maintenance, much like an insurance policy, which represents all basic
maintenance for the specified, E-rate eligible equipment, for the funding
year, regardless of number of hours the service provider may render as
part of their maintenance?
Sonia Gregory-- DARCOM NETWORK SOLUTIONS
A. Basic maintenance contracts should only include E-rate
eligible equipment covered. A full list of covered equipment is required,
and can be includes in the contract as an appendix. We recommend that
there be separate maintenance contracts for equipment that is E-rate eligible
and equipment that is not E-rate eligible. If a basic maintenance contract
includes ineligible components, the ineligible components should be clearly
identified in the contract, and maintenance charges on those components
should be removed from the requested pre-discount price.
Under the Third Order, technical support contracts containing more than
basic maintenance are entirely ineligible, so do not include ineligible
maintenance services.
If you provide maintenance on both eligible and ineligible components,
you should keep an auditable log of the transactions to compare against
the list of provided services.
To help USAC determine if a contract is cost effective, it would be helpful
to have the billing rate information in the contract. It is up to the
service provider whether a basic maintenance contract is a time and materials
contract or a fixed rate contract. USAC is concerned primarily with whether
the service is cost effective and is supporting only E-rate eligible equipment.
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