Administrative Procedure:
Replacement Master Contract Procedure
Further Detail:
State Master Contracts are contracts which are competitively bid and put in place by an entity of state government for use by others. Billed entities may use a State Master Contract that expires before the start of the funding year for which the billed entity is applying for discounts or that expires during the funding year for which the applicant is applying for discounts if the billed entity is using the Form 470 that is filed by the state to support the Replacement Master Contract. In each situation, the competitive process is underway and has not yet been completed. Billed entities are instructed to use a temporary Service Provider Identification Number (SPIN) on the FCC Form 471 application and to request a SPIN change after the Replacement Master Contract has been signed. Commitments may be made based on the temporary SPIN, but no disbursements will be made until the SPIN is changed to that of the service provider who was awarded the new Replacement Master Contract.
Rules that this furthers:
1. 47 C.F.R. § 54.500(g) defines a “master contract” as a “contract negotiated with a service provider by a third party, the terms and conditions of which are then made available to an eligible school, library, rural health care provider, or consortium that purchases directly from the service provider.”
2. 47 C.F.R. § 54.503(c) requires applicants to seek competitive bids by posting an FCC Form 470 to the USAC website for a minimum of 28 days to initiate the competitive bidding process.
3. 47 C.F.R. § 54.511(a) requires applicants to “carefully consider all bids submitted and must select the most cost-effective service offering. In determining which service offering is the most cost-effective, entities may consider relevant factors other than the pre-discount prices submitted by providers but price should be the primary factor considered.”
4. 47 C.F.R. § 54.504(a) requires applicants to submit an FCC Form 471 to USAC after signing a contract for eligible services.
5. 47 C.F.R § 54.701(a) requires USAC to “administer[ ] the universal service support mechanisms in an efficient, effective, and competitively neutral manner.”
6. 47 C.F.R. § 54.702(g) requires USAC to take “administrative action intended to prevent waste, fraud, and abuse.”
How this furthers program integrity:
Enables applicants to receive benefits of Replacement Master Contracts even though the competitive bid process for selection of the service provider may not have been completed at the time the FCC Form 471 is filed. Also, the lower costs achieved through bundling demand in Replacement Master Contracts may increase the cost-effective use of USF funds.