Administrative Procedure:
Split Funding Requests
Further Detail:
USAC may split a Funding Request Number (FRN) between multiple service providers. This can happen either as a result of a change in service providers during the funding year or due to billing changes by the service provider. The total amount of the two FRNs cannot exceed the amount of the original FRN.
USAC may also split an FRN as a result of ineligible services, ineligible entities receiving service, service not posted to an FCC Form 470, mixed bucket reviews, and in order to remove basic telecommunications services from a non-basic telecommunications FRN that will be denied for technology plan deficiencies. Additionally, an FRN may be split to separate recurring from non-recurring services costs to enable applicants and service providers to receive reimbursement from USAC by using different invoicing methods (i.e., Form 472-Billed Entity Applicant Reimbursement (BEAR) Form or Form 474-Service Provider Invoice (SPI) Form). Similarly, if post-commitment SPIN change has occurred, FRN may be split to separate charges for services provided by the incumbent and the new service provider.
Rules that this furthers:
1. 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.
2. 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 pre-discount process submitted but price should be the primary factor considered.”
3. 47 C.F.R. § 54.504(a) requires applicants to submit an FCC Form 471 to USAC after signing a contract for eligible services.
7. 4. The Commission allows applicants to request SPIN changes after USAC has issued a Funding Commitment Decision Letter when “an applicant certifies that (1) the SPIN change is allowed under its state and local procurement rules and under the terms of the contract between the applicant and its original service provider, and (2) the applicant has notified its original service provider of its intent to change service providers.” See Copan Order, 15 FCC Rcd 5498, 5501, FCC 00-100, ¶ 6. In the Sixth Report and Order, the Commission clarified this rule and explained that once a contract is signed for goods and services, an applicant may not change the service provider unless: “(1) there is a legitimate reason to change providers (e.g., breach of contract or the service provider is unable to perform) and (2) the newly selected service provider received the next highest point value in the original bid evaluation, assuming there was more than one bidder.” Sixth Report & Order, 25 FCC Rcd at 18802-03, at ¶92.
5. The Commission has directed USAC to notify applicants when USAC believes that a funding request contains ineligible services and allow applicants to revise the funding request or to demonstrate that the services are eligible for funding. See Requests for Review of the Decisions of the Universal Service Administrator by Aiken County Public Schools et al., Schools and Libraries Universal Service Support Mechanism, File No. SLD-397612, et al., CC Docket 02-6, Order, 22 FCC Rcd 8735, 8740-41, FCC 07-61, ¶ 11 (2007).
6. 47 C.F.R § 54.701(a) requires USAC to “administer[ ] the universal service support mechanisms in an efficient, effective, and competitively neutral manner.”
7. 47 C.F.R. § 54.702(g) requires USAC to take “administrative action intended to prevent waste, fraud, and abuse.”
8. Procedures that provide for splitting FRNs are not established by Commission rules, but the procedure used is based on informal guidance from the Commission.
How this furthers program integrity:
Ensures that applicants are able to receive supported services when it is necessary for an applicant to change service provider(s) for all or a portion of an FRN after USAC has made the funding commitment. It also ensures that applicants may receive funding for part(s) of the request when other part(s) of the original request will need to be denied, for example, because of ineligible services or technology plan deficiencies.