Tom Torlakson State Superintendent of Public Instruction 1 CALNET 2

Tom Torlakson State Superintendent of Public Instruction CALNET 2 Background State of CA issued RFP in 2005 for P1 (Telecom & Internet Services). State RFP was for initial term of 5 years. Terms of RFP were that State had unilateral right to extend contract for two additional one year periods. State issued Form 470 # in conjunction with RFP. CALNET 2 contracts, MSA 1 and 2 awarded to AT&T, signed on 1/30/2007. Initial 5 yr term ran through 1/29/2012.

Tom Torlakson State Superintendent of Public Instruction Status of CALNET 2 On 8/31/10, State of CA issued a Memo of Understanding (MOU) to AT&T exercising option to extend CALNET 2 for additional two one year extensions. The new CALNET 2 expiration date is 1/29/2014. Current AT&T CALNET 2 customers will automatically have option to continue receiving services under CALNET 2 through new expiration date of 1/29/14. AT&T Customers DO NOT NEED to sign any additional documentation to continue receiving existing CALNET 2 services. –Note: Requests for new Service Categories and/or requests for new optical services will require new documentation. If non-State customer does not want to continue receiving CALNET 2 services beyond 1/29/12, non-State customer may terminate ATO with no penalty, provided ATO has been in effect for minimum of two yrs. If termination occurs within two yrs of execution, early termination fees may apply.

Tom Torlakson State Superintendent of Public Instruction State Form 470 State issued Form 470 # in conjunction with RFP in CALNET 2 RFP & contract had provisions for extending for two (2) add’l option years, but State of CA failed to check box associated with Question 7B on Form 470 that add’l year extensions would be considered. FCC Order (DA ) waived the rule for the State Form 470 ONLY so that –Customers relying on the State Form 470 may reference the State Form 470 on its Form 471 Block 5 funding requests for CALNET 2 services during extension period 1/30/12 to 1/29/14. Applicants citing their own Form 470 when ATOs were signed must verify if they checked the option for multi-year contracts under 7B.

Tom Torlakson State Superintendent of Public Instruction Possible Applicant Scenarios Scenario #1; Applicant used the State Form 470 to establish service and sign Authorizations to Order (ATOs). 1.No additional Form 470 is required. 2.Cite original State Form 470 # as the establishing Form 470 on Block 5 funding request. 3.Contract Award Date (CAD) cite same date used on previous year’s Form 471 Block 5 funding request for this service – date should match your ATO last signature date (of the three required signatures). 4.Block 5 funding request Contract Expiration Date should now be January 29 th 2014 to reflect the State’s extension.

Tom Torlakson State Superintendent of Public Instruction Scenario #2 Scenario #2: Applicant used its own Form 470 to establish service and sign Authorizations to Order (ATOs). 1.Refer to original Form 470 Block 2, Item 7b: Did you check the option for contracts with voluntary extensions? 2.If YES, for Contract Award Date (CAD) cite same date used on previous year’s Form 471 Block 5 funding request for this service – date should match your ATO last signature date (of the three required signatures) - and the Contract Expiration Date should now be January 29 th 2014 to reflect the State’s extension.

Tom Torlakson State Superintendent of Public Instruction Scenario #3 If applicant did NOT check the box to allow for contracts with voluntary extensions on its own Form 470, then: 1.Applicant must file a new Form 470 for services 2.Applicant must conduct a competitive bidding process following FCC, state, and local procurement guidelines. 3.After 28 days from posting of Form 470, or from availability of an RFP (if applicable), whichever is later, applicant may select a service provider. –Note: please refer to earlier guidance on competitive bidding requirements and use of an evaluation matrix with cost of eligible services being the most heavily weighted factor. 4.If AT&T/CalNet2 is the service provider selected, no additional contract is necessary, applicant may continue services under existing ATO (Board authorization may be required). 5.If another service provider is selected, any new contracts must be awarded and signed before the Form 471 is filed… deadline is March 24, 2011.

Tom Torlakson State Superintendent of Public Instruction Scenario #3 continued Using an existing contract as a response to a Form Per the February 4, 2011 Schools and Libraries News Brief: “You can consider your existing contract as a bid response, but you must also evaluate any other bids received. Note that if your existing contract is not the most cost-effective solution with price as the primary factor in your bid evaluation, you will not be able to receive E-rate discounts under your existing contract for FY2011.” 2.If an existing contract is selected as most cost-effective solution per FCC guidelines: –Document the selection of the service provider under existing contract with an evaluation matrix, dated memo, and/or Board action item (all, if appropriate). Note that this must occur after the Form day period, but before filing the Form 471. –The Contract Award Date (CAD) on Form 471, Block 5 may be: 1)The actual date the original contract was awarded. Please be aware that you will receive questions during PIA about this since the CAD will precede the Allowable Contract Date (ACD) on the Form )The date that the existing contract was selected as the most cost- effective solution. Make sure to carefully document the selection process as you may need to justify the process and why the contract signature dates don’t correspond to the Form 470 ACD to a Selective Reviewer or auditor at a future date.

Tom Torlakson State Superintendent of Public Instruction 9 Questions?

E-RATE NEXT STEPS…. What you should be doing now

Tom Torlakson State Superintendent of Public Instruction Form 470/Competitive Bidding 28-day window starts from posting of Form 470, or availability of RFP, whichever is later Create evaluation matrix with cost of E-rate eligible services the most heavily weighted factor prior to opening and reviewing bids Make sure to document each step of process –Vendor communication, bid documents, sign-in sheets –Copies of ALL bids, winning and losing –Copy of signed and dated evaluation matrix –If one or no bids are received, document in a dated memo or Allow adequate time for contract awards and signatures

Tom Torlakson State Superintendent of Public Instruction Form 471 Preparation File separate Forms 471 for Priority One and Priority Two Services –You are not required to file a separate Form 471 for each type of service (i.e. phone service, Internet Access, web hosting) Collect pertinent documentation ahead of time… –Block 2 information –Block 4 entity numbers and NSLP data –Block 5 contracts, SPINs, and estimated costs –Block 6 budget information Prepare Item 21 Attachments – MUST be filed on or before March 24, 2011 –Refer to USAC guidance on methods available to submit Item 21 attachments attachments.aspx attachments.aspx

Tom Torlakson State Superintendent of Public Instruction Once you have filed Form 471… Collect and file all documentation supporting process – must retain for a minimum of 5 years from June 30, 2012 (may be longer depending on contract terms and final implementation schedules) Review Form 471 Receipt Acknowledgement Letter (RAL) carefully –Any corrections relating to discount level and cost increases must be submitted within RAL period or USAC will not honor them –Any increases must be substantiated by documentation dated prior to March 24, 2011 Respond to Program Integrity Assurance (PIA) review questions promptly and ask for an extension if necessary