Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions Table of Contents About the Secure and Trusted Communications Networks Reimbursement Program (Reimbursement Program) ...................................................................................................................... 2 Applying to the Reimbursement Program .............................................................................................. 4 Eligible Expenses .................................................................................................................................... 10 Initial Cost Estimates .............................................................................................................................. 14 Application Decisions and Allocations ................................................................................................... 17 Modifications to FCC Form 5640 Part C Information ............................................................................ 18 RRD Plans, Timelines, and Deadlines..................................................................................................... 20 Reimbursement Claim Requests & Payment Process ........................................................................... 22 Reporting, Compliance Monitoring, and Investigations ....................................................................... 30 Glossary Bureau: The Wireline Competition Bureau within the Federal Communications Commission FCC: Federal Communications Commission (also “the Commission”) FA: Fund Administrator Reimbursement Program: Secure and Trusted Communications Networks Reimbursement Program FCC Form 5640 Part C: FCC Form 5640 Part C Application Request for Funding Allocation FCC Form 5640 Part G or Reimbursement Claim Request: FCC Form 5640 Part G Reimbursement Claim Request FRN: FCC Registration Number RRD: Removal, Replacement and Disposal Secure Networks Act: Secure and Trusted Communications Networks Act of 2019 1 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions Note: Any information, guidance, or advice provided in this FAQ constitutes informal guidance and should not be considered a final or binding FCC determination by FCC staff.1 About the Secure and Trusted Communications Networks Reimbursement Program (Reimbursement Program) What is the Secure and Trusted Communications Networks Reimbursement Program (Reimbursement Program)? The Secure Networks Act directs the FCC to establish the Reimbursement Program. The Reimbursement Program aims to secure the nation’s communications supply chain and protect national security by reimbursing eligible providers of advanced communications service for the removal, replacement, and disposal of communications equipment and services that pose a threat to the security of our nation’s communications networks. Specifically, the Reimbursement Program reimburses providers of advanced communications services with ten million or fewer customers for costs reasonably incurred for the removal, replacement, and disposal of covered communications equipment or services that pose a national security risk. Currently, covered communications equipment or services are limited to communications equipment or services produced or provided by Huawei Technologies Company (Huawei) and/or ZTE Corporation (ZTE) that were obtained by providers on or before June 30, 2020. Who is eligible to participate in the Reimbursement Program? To be eligible to participate in the Reimbursement Program, you must be an advanced communications service provider2 (Provider) with ten million or fewer customers that obtained Huawei and/or ZTE equipment and/or services on or before June 30, 2020. The term “advanced communications service” means high-speed switched, broadband telecommunications capability that enables users to originate and receive high-quality voice, data, graphics, and video telecommunications using any technology with connection speeds of at least 200 kbps in either direction. Providers of advanced communications service could include schools, libraries or health care providers, or consortiums thereof, to the extent they provide such facilities-based broadband service to end users. To determine whether a Provider has ten million or fewer customers, ‘customers’ means those customers of the Provider and customers of any affiliate of that Provider that receive advanced 1 See Applications of Mary Ann Salvatoriello, John Boyd, Holly Hill Broad. Co., Suzanne M. Wilson, Memorandum Opinion and Order, 6 FCC Rcd 4705, 4708, para. 22 (1991). In addition to new content, this document contains updates to previous FAQs posted by the Bureau. 2 A provider of advanced communications service that applies to the Reimbursement Program and is approved for an allocation is referred to in the Secured Networks Act and the Commission’s rules as a “Recipient.” Because this FAQ addresses phases of the Reimbursement Program that occur both before and after an application is approved, for ease of reference, applicants to the Reimbursement Program and Recipients are referred to collectively as “Providers.” 2 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions communications services from the affiliate or Provider as of the date the Reimbursement Program application is filed. Providers may be asked to upload supporting documentation to prove their eligibility based on these criteria. How does the Reimbursement Program work? Generally, the Reimbursement Program follows the high-level steps below: a. Providers – Confirm eligibility to participate in the Reimbursement Program based on eligibility requirements and identify covered Huawei and/or ZTE equipment and/or services in the network. b. Providers – When the filing window opens, complete the FCC Form 5640 Application Request for Funding Allocation (FCC Form 5640 Part C) using the online filing portal, inclusive of eligibility and cost estimate information and associated supporting documentation. c. Bureau & Fund Administrator – Review applications to determine completeness, eligibility, and reasonableness of cost estimates. d. Bureau – Grant or deny applications. e. Bureau – Issue funding allocations to eligible Providers based on approved cost estimate submissions and notify Providers of their allocation amount. f. Providers – Obtain funding allocations from the Bureau. Submit any needed modification requests, Reimbursement Claim Requests, and supporting documentation as actual costs are incurred. g. Bureau & Fund Administrator – Review Reimbursement Claim Requests based on actual invoices submitted and approve or deny requests as they are received. h. Department of Treasury – Issues reimbursement payments for approved Reimbursement Claim Requests. i. Providers – Complete removal, replacement, and disposal (RRD) project within the mandated term. j. Providers – File all Reimbursement Claim Requests by the Reimbursement Claim Request deadline. k. Bureau & Fund Administrator – Confirm equipment and/or service removement, replacement, and disposal, perform audit, and close out activities with Providers. How is the Reimbursement Program funded? The Reimbursement Program is funded by a $1.9 billion appropriation in the Consolidated Appropriations Act, 2021 (CAA). Where can Providers find more information about the Reimbursement Program? Additional information about the Reimbursement Program can be found on the Program website at www.fcc.gov/supplychain. 3 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions Providers may also contact the Reimbursement Program Fund Administrator email address at SCRPFundAdmin@fcc.gov with questions regarding the application and reimbursement request process or regarding actual submissions. Providers may also contact the Reimbursement Program Fund Administrator by calling (202) 418-7540 from 9:00 AM ET to 5:00 PM ET, Monday through Friday, except for Federal holidays. Applying to the Reimbursement Program When and how do Providers apply to the Reimbursement Program? Reimbursement Program applications must be submitted during a filing window announced by the Bureau. At that time, Providers may utilize FCC Form 5640 Part C, accessed via an online portal accessible at fcc.gov/supplychain to submit their applications. Providers that do not submit an application during a filing window established by the Bureau cannot participate in the Reimbursement Program. To date, the Bureau has announced and opened one application window for the Reimbursement Program. That application window opened on October 29, 2021 and closed on January 28, 2022. Any future application filing windows will be announced by the Bureau via a Public Notice. All applications filed during a particular filing window will be treated as if they were simultaneously received once the filing window closes. The Bureau will not attach a preference to applications submitted early. Requests received outside of the filing window will not be accepted. The Bureau and Fund Administrator will begin reviewing applications for eligibility and cost reasonableness only after the filing window has closed. How can Providers prepare for the application process? Reimbursement Program funding allocations are based on cost estimates submitted by Providers for costs reasonably incurred for the removal, replacement, and disposal of the covered communications equipment and services in their networks. Providers interested in participating in the Reimbursement Program should inventory such equipment and service in their networks and begin familiarizing themselves with Reimbursement Program requirements. For instance, Providers that intend to submit an FCC Form 5640 Part C are encouraged to visit the Reimbursement Program website, fcc.gov/supplychain, to obtain more information about the Reimbursement Program and eligibility requirements. Providers should also review Section 4 of the Secure Networks Act,3 the 2020 Supply Chain Order,4 2021 Supply Chain Order,5 the Finalized Forms 3 47 U.S.C. § 1603. 4 Protecting Against National Security Threats to the Communications Supply Chain Through FCC Programs, WC Docket No. 18-89, Second Report and Order, 35 FCC Rcd 14284 (2020) (2020 Supply Chain Order). 5 Protecting Against National Security Threats to the Communications Supply Chain Through FCC Programs, WC Docket No. 18-89, Third Report and Order, 36 FCC Rcd 11958 (2021) (2021 Supply Chain Order). 4 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions Procedures PN,6 and the Cost Catalog, and then begin to compile any vendor quotes, invoices, and other documentation in preparation for their application submission. Providers should also confirm they are registered in SAM.gov. The SAM.gov Entity Registration Status Tracker provides information on existing registrations and the registration process. Providers are urged to initiate the registration process, or confirm their existing status, early as registration may take some time to complete. Are there any limitations with respect to number of locations, equipment, or cost estimate submissions that will impact how a Provider must complete their FCC Form 5640 Part C? Yes. Due to system limitations, Providers that anticipate exceeding any of the following limits will need to submit multiple applications using different FCC Registration numbers such that no one application exceeds any of these limits: • Locations: 1,000 • Equipment: 1,000 items (combined existing and replacement equipment) • Cost Estimates: 20,000 Though the maximum number of locations and equipment entries permitted for upload into the templates is 1,000, we recommend that Providers only upload up to 500 locations and equipment entries at a time to avoid system performance issues. Providers attempting to upload more than 500 locations and equipment entries with any one batch upload are likely to face significantly degraded system performance. To submit multiple applications, Providers may either submit separate applications for their subsidiaries (as opposed to submitting one application at the holding company level) or create multiple FRNs associated with one entity EIN/TIN. These approaches will allow the Provider to stay under the limitations listed above and also allow for having multiple people working on their submissions during the filing window as only one person can be in an individual application at any one time. If Providers choose to create additional/multiple FRNs, they should: • Provide an attachment of all related FRNs that should be considered during the review period; • Provide the same required eligibility and cost estimate attachments with each application to prevent any delay in the review of each application; • Use a consistent naming convention when establishing the new FRNs that indicates the FRNs are associated, e.g., Providers may organize their applications geographically, by 6 Wireless Competition Bureau Finalizes Application Filings, Procedures, Cost Catalog, and Replacement List for the Secure and Trusted Communications Networks Reimbursement Program, WC Docket No. 18-89, Public Notice, 36 FCC Rcd 12190 at 12212-14, paras. 66-70.(WCB Aug. 3, 2021) (Finalized Forms Procedures PN). 5 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions distribution layer, or any other logical manner and use FRN naming conventions that reflects that decision; and • Use the same ‘Real Party in Interest’ FRN for each Provider FRN. How can a Provider create multiple FRNs for use in creating multiple applications? Providers creating multiple FRNs for use in creating multiple FCC Form 5640 Applications should use the same TIN in the TIN field of each FRN registration filing. Providers may start the CORES registration process by visiting https://apps.fcc.gov/coresWeb/publicHome.do. During the filing window, can multiple users work on a single Provider’s FCC Form 5640 Part C at the same time? No. Only one user can work inside any one application at a time. Providers concerned about their ability to complete the application within the filing window or Providers with applications that will exceed 1,000 locations, 1,000 equipment items (combined existing and replacement), or 20,000 cost estimates may do one of the following, as applicable: 1. Providers with multiple eligible subsidiaries should apply at the subsidiary level, as opposed to the Holding Company level, using the FRN of each subsidiary for separate applications. This will allow unique users to work on each application and could avoid any given application reaching the limitations listed above. 2. Providers may also create multiple FRNs associated with one entity EIN/TIN. This will allow the Provider to create multiple applications, one for each FRN, enabling unique users to work on each application. The FCC Form 5640 Part C will also allow for Excel batch uploads for the locations, equipment, and cost estimate sections of the application. These templates can be completed offline, outside the SCRP Filing Portal, so that multiple users can work within the same template, or on multiple versions of the same template, and then combine. The completed batch files can then be uploaded into the FCC Form 5640 application. What forms of documentation will be required as part of my application to support eligibility and documentation of existing covered communications equipment and services? FCC Form 5640 Part C contains a number of questions related to eligibility and documentation of the Provider’s Huawei and/or ZTE equipment and services obtained on or before June 30, 2020 that is eligible for the Reimbursement Program. Provider of Advanced Communications Service. Whether a provider is an eligible provider of advanced communications service will be validated using FCC Form 477 Local Telephone Competition and Broadband Reporting filing information.7 Providers that have not recently filed an FCC Form 477 should 7 All facilities-based broadband providers are required to file data with the FCC twice a year, using the FCC Form 477, on where they offer Internet access service at speeds exceeding 200 kbps in at least one direction. 6 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions be prepared to provide supporting documentation demonstrating their status as an eligible Provider of advanced communications service. Supporting documentation could include: • Information from the Provider’s website describing services provided to customers; • A catalog of services provided to customers; or • Annual public financial reports demonstrating number of customers and/or broadband services provided. Covered Huawei and/or ZTE Equipment. To be eligible for the Reimbursement Program, Providers must show they have in their networks Huawei and/or ZTE equipment or service that was obtained on or before June 30, 2020. The FCC Form 5640 Part C requires Providers to identify their existing Huawei and/or ZTE equipment (e.g., identifying make, model, and serial number when available) and date when such equipment or service was obtained. The required supporting documentation could include: • Architecture or network configuration diagram(s); • Equipment inventory lists with asset level identification (e.g., serial number(s)); • Equipment specifications for existing equipment; • Purchase orders or other documentation (e.g., invoices) that provide equipment specifications and date purchased; or • Photographs of equipment. What forms of documentation will be required to support cost estimates? Documentation to support cost estimates will be requested as part of your FCC Form 5640 Part C. During the filing window, Providers may use the Cost Catalog embedded in FCC Form 5640 Part C to support requests if quotes or other documentation are not available at the time of submission. However, vendor quotes must be provided for costs not included in the Cost Catalog or for estimates that differ from the average cost estimates listed in the Cost Catalog. Also, vendor quotes must be provided for eligible expenses before the Provider will be reimbursed for actual costs. What equipment or service location information are Providers required to provide in their application? Each equipment or service will need to correlate to a specific location. Providers are required to upload specific location information for each site, including: • Location name; • Latitude of location (using WGS84 datum for latitude coordinates); • Longitude of location (using WGS84 datum for longitude coordinates); • Location address (Number & Street, City, State, and Zip Code); 7 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions • Location address if no postal address is available (a location description is permissible in situations where a postal address is not available); and • Type of site location (i.e., cell site, mobile switching center, central office, network operations center, headquarters, or other (if selecting “other” a brief description is required)). This applies both to cell sites and office locations that may be the location for network core equipment. Multiple locations and existing equipment can be added via bulk upload. NOTE: Bulk upload for locations and equipment is not possible after initial application submission. See “Modifications to FCC Form 5640 Part C Information” section for guidance relevant to post-application acceptance. Is it possible to batch upload site locations, equipment, and cost estimates in the application? Yes. Excel templates are available for download within the FCC Form 5640 Part C to allow Providers to bulk upload multiple locations and existing and replacement equipment and/or services as well as cost estimates for replacement equipment. Cost estimates can only be entered via Excel batch upload and must be consolidated into one Excel template prior to uploading into FCC Form 5640 Part C. NOTE: Bulk upload for locations and equipment is not possible after initial application submission. See “Modifications to FCC Form 5640 Part C Information” section for guidance relevant to post-application acceptance. Should Providers file at the holding company level or the individual/subsidiary level? Providers are encouraged to submit a single, consolidated application at the holding company level (as long as doing so will not result in an application that exceeds 1,000 locations, 1,000 equipment/services items or 20,000 cost estimates); however, they are permitted to submit at the individual/subsidiary level. If applying at the subsidiary level, Providers will be required to identify their holding company FRN under the “Real Party in Interest” Information section of FCC Form 5640 Part C. If applying at the holding company level, Providers will need to provide a listing of the FRNs of the subsidiaries covered by their application. This can be included as an attachment in the application. In this case, the Provider’s FRN and the “Real Party of Interest” FRN will be the same. What Provider information is automatically considered confidential in the FCC Form 5640 Part C application? Consistent with the Freedom of Information Act (FOIA) and the FCC’s implementing rules, the FCC will treat certain information in the FCC Form 5640 Part C as presumptively confidential and will withhold such information from routine public inspection, including: 8 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions • Detailed accounting information on the covered communications equipment or services removed, replaced, and disposed of, and the replacement equipment or services purchased, rented, leased, or otherwise obtained using Reimbursement Program funds; • Vendor price quotes; • Invoices submitted with the FCC Form 5640 Part G; • Equipment or services location, including address, latitude/longitude, etc.; • Removal or replacement plans that include sensitive information; • Specific equipment or service type; and • Other provider-specific information; • Specific timeline for the permanent removal, replacement, and disposal of covered communications equipment and services. For additional information on what information is considered “confidential,” please consult the Finalized Form Procedures Public Notice.8 When seeking confidential treatment for information contained in attachments categorized as “Other,” the Provider must also upload a request for confidentiality providing the justification as to why the information is entitled to confidential treatment. The request for confidentiality will be made publicly available. Attachments including information for which confidential treatment is sought, and granted, will be withheld from routine public inspection. Redacted versions of the attachments (if provided) and attachments not indicated as containing confidential information will be subject to routine public inspection. Do Providers have the option to submit confidential versions of their timeline and plan documentation? Providers’ timeline and plan documentation will be considered presumptively confidential and will be withheld from the public search portal regardless of whether the Provider requests confidential treatment of those documents, consistent with the language in the Finalized Form Procedures Public Notice.9 FCC Form 5640 Part C provides Providers the option to request confidential treatment for these attachments, but they will be treated as confidential regardless of how the Provider addresses that section of FCC Form 5640 Part C. When prompted for a redacted version of these documents, Providers can choose to provide a redacted version or simply attach a blank document to meet the system requirement for an attachment in that section. For additional information on requests for confidentiality, please consult the FCC Form 5640 User Guide. 8 Finalized Forms Procedures PN, 36 FCC Rcd at 12212-14, paras. 66-70. 9 Finalized Forms Procedures PN, 36 FCC Rcd at 12213-14, para. 69. 9 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions Eligible Expenses What costs are eligible for reimbursement from the Reimbursement Program? The Reimbursement Program will reimburse eligible Providers of advanced communications services for costs reasonably incurred for the removal, replacement, and disposal of their Huawei and/or ZTE equipment and services obtained on or before June 30, 2020. RRD costs incurred prior to April 17, 2018 will not be reimbursable. Though reimbursement claims can be submitted 120 days after the expiration of the RRD term, costs incurred after the expiration of the RRD term are ineligible for reimbursement. The FCC considers the cost of replacement facilities ‘reasonable’ if the replacement facilities are comparable to those in use by the Provider prior to the removal, replacement, and disposal of covered communications equipment or services. Consideration of ‘costs reasonably incurred’ may necessarily be decided on a case-by-case basis by the Bureau based on information provided as part of the application process. The FCC recognizes that comparable replacements for older network equipment or services may not be available in the marketplace, necessitating some flexibility. For example, the FCC has said that replacing older mobile wireless networks with a 4G LTE equipment or service that is 5G ready will be treated as a comparable replacement. For additional information on comparable replacements and the treatment of technology upgrades, see the 2021 Supply Chain Order.10 The Bureau developed a Cost Catalog that contains categories of costs expected to be incurred in the RRD process and provides a detailed list of the core and non-core equipment and services eligible for reimbursement (and their associated predetermined estimated costs). Providers may rely on the average cost estimates identified in the Cost Catalog when completing their FCC Form 5640 Part C during the filing window. For costs not covered by the Cost Catalog, or if Providers want to use a cost estimate that differed from the Cost Catalog, they must provide an individualized cost estimate supported by a vendor quote. The Cost Catalog can be found on the Reimbursement Program website. Although Providers are encouraged to consult the Cost Catalog prior to submitting their applications, the Cost Catalog should not be used as the basis for cost estimates when submitting a request to modify a cost estimate after an application for reimbursement has been approved (post-approval modifications are addressed in more detail below). What costs are not eligible for reimbursement from the Reimbursement Program? The Fund Administrator and Bureau will review all costs to ensure adherence to program guidelines and determine reasonableness. Costs ineligible for reimbursement include, but are not limited to, the following: Technology Upgrades. Reimbursement Claim Requests will be reviewed by the Fund Administrator and the Commission for eligibility and reasonableness. The Bureau will only issue allocations and 10 2021 Supply Chain Order, 36 FCC Rcd at 11992-95, pars. 86-92. 10 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions disbursements up to the amount of a comparable replacement using a “costs reasonably incurred” standard. Costs incurred above and beyond the reasonable cost of a comparable replacement will be borne by the Provider. Examples of technology changes that the Commission has said are technology upgrades and not comparable replacements are as follows: • Replacement of a microwave backhaul with fiber backhaul or replacing last-mile fixed wireless links with fiber-to-the-premises (FTTP); and • Replacement of fixed wireless links or RAO networks with fiber. When Reimbursement Program Providers seek to replace eligible covered communications equipment or services with a technology upgrade in excess of the costs of a comparable replacement, they will need to provide price quotes for a comparable replacement with their FCC Form 5640 Part C and may not rely on the cost estimates contained in the Cost Catalog to estimate the cost of a comparable replacement. For additional information on submitting reimbursement claims for technology upgrades, please consult the FCC Form 5640 User Guide. Customer Premises Equipment. Separately, the Commission has determined that the replacement of non-Huawei and/or non-ZTE mobile handsets and other customer premises equipment, including Internet of Things devices, used by end users to access and utilize advanced communications services are not reasonably necessary to the removal, replacement, and disposal of covered communications equipment or service. Accordingly, costs associated with the removal, replacement, and disposal of non- Huawei and/or non-ZTE customer premises equipment are ineligible for reimbursement under the Reimbursement Program.11 The replacement of covered Huawei and/or ZTE CPE may be eligible for reimbursement, however, where “essential to the provision of advanced communications service.”12 In addition, the Bureau has said, citing the Commission’s language in the 2021 Supply Chain Order, that wired (Wi-Fi) and wireless routers that constitute customer premises equipment (CPE) are not reimbursable under the Program.13 Are expenses related to financing a line of credit or bridge loan reimbursable? There may be instances when a Provider began the removal, replacement, and disposal process prior to applying for and receiving their funding allocation from the Reimbursement Program and obtained a line of credit or bridge loan to do so. In such instances, the origination fees, commitment fees, and other fees and expenses associated with that loan may be reimbursable up until the time of allocation. These costs will be considered on a case-by-case basis, and Providers will need to submit supporting documentation, including a brief cover letter, detailing the need for the line of credit or bridge loan, how 11 See 2021 Supply Chain Order, 36 FCC Rcd 11958, 11996, para. 94. 12 See Protecting Against National Security Threats to the Communications Supply Chain Through FCC Programs, Order, DA 21-1339, para. 7 (Order on Clarification). 13 Wireless Competition Bureau Finalizes Application Filings, Procedures, Cost Catalog, and Replacement List for the Secure and Trusted Communications Networks Reimbursement Program, WC Docket No. 18-89, Public Notice, 36 FCC Rcd 12190 at 1224, para.100 (WCB Aug. 3, 2021) (Finalized Forms Procedures PN). 11 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions that funding is being utilized, and demonstrating that reimbursement is being sought only for fees incurred pre-allocation. All such fees incurred after a Provider receives its allocation will carry a presumption of being unreasonable and accordingly, will not be reimbursed. Are temporary/interim facilities reimbursable? Yes, if a Provider requires interim facilities to meet its removal, replacement, or disposal term or avoid prolonged down-time during the transition, then interim facilities may be reimbursable. Circumstances will be considered on a case-by-case basis, but no Reimbursement Program funds may be used to purchase, obtain, or maintain Huawei or ZTE communications equipment or services. Is construction of a new tower reimbursable? Costs associated with a new tower may be reimbursable and will be considered on a case-by-case basis. If a structural analysis of a tower concludes that the tower cannot be reinforced to support a new piece of equipment, the Provider should determine whether there are other options available, besides constructing a new tower, that will allow it to complete its equipment replacement within its RRD term. Any Provider seeking reimbursement for tower construction will be required to submit documentation, such as a statement signed by and with the seal of an accredited structural engineer, certifying the results of a tower study, along with the Provider’s cost estimate to erect the new tower. Can Providers be reimbursed for vendor travel expenses? If so, how should travel expenses for reimbursement be submitted? Vendor travel expenses (e.g., meals, airfare, mileage) not included in a vendor’s rates are eligible for reimbursement provided they are reasonable. All stand-alone travel expenses submitted for reimbursement must be itemized. Consistent with Internal Revenue Service guidelines, Providers must also submit receipts for any travel expense greater than $75.00 and all lodging expenses. As such, please include receipts for travel expenses as an attachment to the particular reimbursement request on the FCC Form 5640 Part G with which the travel expense is associated, in addition to the underlying invoice for the service rendered (general information on the submission of Reimbursement Claim Requests is provided below). Alternatively, expenses for meals and incidentals can be billed on a per diem basis. The per diem amount should be in accordance with the approved government per diem rates in effect with the work that was performed (available at the GSA website) for the location where the work was completed. Note that lodging may not be billed on a per diem basis and those expenses must be supported by a receipt or invoice. Can a Provider be reimbursed for the cost of in-house labor? The cost of the salary of an internal employee for the time he or she works exclusively on tasks directly related to the Providers RRD project may be reimbursable. Providers will be required to submit documentation showing hourly rates, time spent on the RRD project, and other information that will 12 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions allow the Fund Administrator, and any Reimbursement Program auditors, to verify the cost incurred by the Provider. Note that overhead and ongoing business expenses not directly attributable to the removal, replacement, and disposal of Huawei and/or ZTE communications equipment or services, that would be incurred regardless of participation in the Reimbursement Program are not reimbursable. Examples of non-reimbursable overhead costs include general business operations, administrative, accounting, rent, utilities, insurance, and normal system maintenance not directly attributable to the Provider’s RRD program. For instance, if an employee was hired specifically to manage Reimbursement Program compliance, their salary and benefits may be reimbursable, but only that portion of the salary (i.e., hours) directly related to the Reimbursement Program. Hours working on general business operations not related to the Reimbursement Program will not be reimbursable. Providers are not permitted to sell services to themselves, and employees of a Provider are not permitted to sell consulting services to that Provider. Are maintenance and support costs for existing Huawei and ZTE equipment and services eligible for Reimbursement Program support? No. Costs associated with maintaining the Huawei and ZTE communications equipment and/or services that the Reimbursement Program was created to eliminate are not eligible for reimbursement. Are project management expenses eligible for Reimbursement Program support? Project management expenses that are limited to the removal, replacement, and disposal of Huawei and/or ZTE communications equipment or services, and not related to overhead or on-going business expenses that would be incurred irrespective of the Provider’s participation in the Reimbursement Program may be reimbursable. Project management services may include both reimbursement-related project management services (e.g., FCC Form 5640 planning, preparation, and filing support, invoice processing, documentation collection and completion) and ‘in-the-field’ technical project management services (i.e., vendor turnkey or bundled, technical management of on-site equipment removal, replacement, and disposal projects). Note that the project management Cost Catalog categories (in particular 5.7.1 and 5.7.3) are only applicable to costs for ‘in-the-field’ technical project management services. How will reimbursement for disposal costs performed prior to the release of the FCC’s guidance on disposal best practices be considered? The FCC addressed this question in the Disposal Guidance PN.14 Providers of advanced communications services that removed and disposed of covered communications equipment or services prior to the release of this PN on September 30, 2021, could not have known the best practices provided in 14 Wireline Competition Bureau Announces Best Practices for Equipment Disposal and Revises FCC Form 5640 Certifications for the Secure and Trusted Communications Networks Reimbursement Program, WC Docket No. 18- 89, Public Notice, 36 FCC Rcd 14061 (WCB Sep. 30, 2021) (Disposal Guidance PN). 13 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions Appendix A of that PN. Accordingly, the Commission will take this into account when evaluating a Provider’s compliance with Section 1.50004(j) for disposal efforts occurring prior to the release of these best practices and may grant Reimbursement Program Claim Requests for disposal costs incurred that were not mentioned in the PN. The Commission expects Providers have acted reasonably, however, in carrying out the safe and secure disposal of covered communications equipment and services and have retained sufficient documentation to verify the disposal efforts taken. Can the cost of replacing non-Huawei and/or ZTE (i.e., "third-party") network equipment that is not compatible with replacement equipment be reimbursable? Yes. Third-party network equipment that is not compatible with replacement equipment and rendered useless due to the replacement of covered equipment with incompatible replacement equipment may be eligible for reimbursement under the Reimbursement Program. To be considered eligible, the costs associated with the replacement of such equipment must be reasonably necessary to the removal, replacement, and disposal of covered communications equipment and service. However, the cost of replacing non-Huawei and/or ZTE CPE is ineligible for reimbursement.15 Initial Cost Estimates What is the purpose of submitting cost estimates? Approved cost estimates will serve as the basis for Reimbursement Program allocation determinations, as well as a basis for the review of subsequent Reimbursement Claim Requests. A Provider’s allocation is the amount of funding set aside from the Reimbursement Program for the Provider to draw against as costs are incurred. To help the Bureau and Fund Administrator determine an approvable estimate amount for purposes of calculating a Provider’s allocation, Providers must identify in their application both their existing equipment and/or services and the replacement equipment and/or services they intend to purchase or have purchased to complete their removal, replacement, and disposal project. Providers may only receive funding disbursements for actual costs incurred that are found reasonable, up to the amount of their funding allocation. The Bureau and Fund Administrator will review each cost estimate for reasonableness and ensure that the cost estimate is supported by either the Cost Catalog or vendor quotes and invoices. If additional information is needed, Providers will receive a Request for Information (RFI) for clarification or additional information via the online portal. In order to provide a timely response to any RFIs, please ensure that the Contact Information provided in the application is up-to- date and accurate. 15 See Finalized Forms Procedures Public Notice, 36 FCC Rcd at 12220-21, para. 90.; Order on Clarification, DA 21- 1339, paras. 6-7. 14 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions Can Providers include contingency amounts in their estimates? No, contingency amounts will not be accepted as part of a Provider’s cost estimate submission. After allocation issuance, Providers can revise their cost estimates through a modification filing if they learn of additional expenses or if they need to change previously provided cost estimates. If a cost estimate has been approved during the initial estimate review phase, will all invoices associated with that cost estimate also be considered reimbursable? During the estimate review phase, the Bureau and Fund Administrator will conduct a detailed review of all estimates submitted and request further information as needed. Invoice Submissions undergo a separate, thorough review process even if the cost estimate has already been approved. When a Reimbursement Program Provider later submits a Reimbursement Claim Request for an expense that was approved during the cost estimate review phase, that submission will be reviewed for sufficiency of documentation (e.g., a valid vendor invoice) and consideration of whether the Provider has made any changes in its transition plan as indicated through other submissions or cost estimate modifications. If the actual cost of the equipment or service has changed from what the Provider originally estimated, or the Provider purchases equipment or services that are different from what it reported when submitting its initial cost estimates, the Provider must modify its estimate to reflect the updated understanding of expenses. The Bureau and Fund Administrator will review this documentation and recommend payment for the modified expenses that are deemed reasonable. Providers will only be reimbursed for reasonable expenses actually incurred up to the amount of their allocation even if their plans change or actual costs exceed their amount of the funding allocation. What documentation is required when submitting cost estimates for in-house labor? If a Provider intends to use in-house labor to perform tasks related to the Reimbursement Program, this cost may be eligible for reimbursement if adequately supported. All internal labor costs that a Provider expects to incur in conjunction with the Reimbursement Program and for which it intends to seek reimbursement must be included in its cost estimate. When filing cost estimates not based on the Cost Catalog, internal labor costs should be estimated on a per hour basis for each Reimbursement Program- related task, providing both an estimate of labor hours to be incurred for each Reimbursement Program- related task and the internal labor rate to be used. The cost estimate for each task will equal the estimate of the total hours per task multiplied by the per hour internal labor rate, which may include salary and benefits. As with all cost estimates, Providers must certify that the estimates are made in good faith. If a Provider’s cost estimate includes internal labor costs, it should upload the following supporting documentation to its estimate: 15 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions • A listing of the tasks it expects to perform during the Reimbursement Program, including the estimated hours per task, the internal labor rate to be applied, and the total dollar amount for the task. • A breakdown of how each internal labor rate is calculated, showing the salary and benefits. In its review, the Bureau and Fund Administrator will exercise their discretion to determine the reasonableness of hours and/or labor rates. Providers should be prepared to provide justification if additional information is requested as to why the total labor amount entered is above that listed in the Cost Catalog by the Fund Administrator. During the reimbursement period or at account closing, the Bureau and/or Fund Administrator may request additional supporting information for internal labor costs, such as payroll, human resources, or financial records. How should Providers submit cost estimates for truck rolls or self-install services (Cost Catalog Index 5.49.0)? Prior versions of the Cost Catalog incorrectly indicated that the cost estimates range and averages identified for truck rolls or self-install services (Cost Catalog Index 5.49.0) were per end user. The cost estimates range and averages instead, however, should be provided for the total estimated cost for the truck rolls or self-installs needed in a local service area, not the cost for truck roll or self-install to each individual end user location. Removal of the “(per end-user)” unit of measurement for cost estimates for truck rolls or self-install services is reflected in the Cost Catalog. How should Providers enter cost estimates when replacing more than one unit of equipment or services? If the quantity of replacement equipment or services is greater than one, and the Provider is using the Cost Catalog average, the Provider must manually update Column J (est_cost) of the SCRP Excel Upload Cost Estimates Template to reflect the total cost estimate of all units of the equipment or service being replaced. For equipment, the Provider should also update the “Quantity of Replacement Equipment” (Column P) with the quantity of equipment that this cost estimate includes. Also for equipment, this cost estimate number would reflect the product of multiplying Column I (cost_catalog_avg) by Column O (quantity_of_replacement_equipment). For services, Providers should pay close attention to the unit of measure in the Cost Catalog and reflect the appropriate number in Column J, “Provide Estimate of Costs (in USD)” (for the quantity of services required. NOTE: This response applies to initial cost estimates. Post application acceptance, Recipients cannot use the Cost Catalog average as a basis for cost estimates. See section, “Modifications to FCC Form 5640 Part C Information” for further guidance. How should Providers submit cost estimates for project management services? The Project Management categories in the Cost Catalog (in particular 5.7.1 and 5.7.3) are only applicable to costs for “in-the-field” technical project management services. Reimbursement Program-related project management services (e.g., FCC Form 5640 planning, preparation and filing support, invoice 16 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions processing, documentation collection and completion) are not included in the Cost Catalog and should, therefore, be submitted by indicating that the cost estimate average is not included in the Cost Catalog and providing the estimated costs and required supporting documentation. Estimates will be reviewed for reasonableness based on the description of services provided relative to the total cost and technical aspects of the project; consideration of the timing of the Provider’s removal, replacement, and disposal project; and consideration of the appropriateness of the rate provided given the type of work described. The rates for “reimbursement-related” project management services are anticipated to be lower than those included in the Cost Catalog, which are intended to apply to “in-the-field” technical project management services. How often can Providers revise cost estimates before the Bureau issues a decision on their FCC Form 5640 Part C applications? During the application filing window, Providers may revise their cost estimates as many times as needed. Once the window closes, however, Providers cannot amend their cost estimates unless: (1) specifically asked to revise their estimate(s) in response to a RFI from the Reimbursement Program Fund Administrator; or (2) the Provider has notified the Reimbursement Program Fund Administrator of its intent to amend its application and has contacted the Fund Administrator Help Desk via email or phone. As a general matter, amendments made to an FCC Form 5640 Part C that would result in an increase to the total cost estimate after the close of an application window will be denied. Application Decisions and Allocations When do Providers find out if they are eligible to participate in the Reimbursement Program? Providers that submitted applications during the October 29, 2021 - January 28, 2022 filing window and were approved for an allocation received notifications from the Bureau on July 15, 2022. The Bureau also announced the approvals via a Public Notice.16 If the Bureau opens another application filing window, Providers that submit applications and are deemed eligible will similarly receive notifications from the Bureau at the end of the application review period. Providers deemed ineligible to participate in the Reimbursement Program will receive communication(s) throughout the application review period and will be provided an opportunity to cure any application defects prior to a final determination. How can Providers find their allocation amounts? Providers that were approved for an allocation on July 15, 2022 were notified of their allocation amounts. Allocation information was also announced via a Public Notice on July 18, 2022 and is 16 Wireline Competition Bureau Announces the Grant of Applications for the Secure and Trusted Communications Networks Reimbursement Program, WC Docket No. 18-89, Public Notice, DA 22-774 (WCB Jul. 18, 2022). 17 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions available to Providers via the SCRP Online Portal. As Providers submit reimbursement claims and receive funding disbursements, they can monitor their remaining allocation balance by reviewing their Program Participant File in the SCRP Online Portal. How are allocations determined? Costs estimates are submitted by Providers as part of the application process for purposes of determining overall Reimbursement Program Fund demand and funding allocations. Approved cost estimates serve as the basis for Reimbursement Program allocation determinations. A Provider’s allocation is the amount of funding set aside from the Reimbursement Program for the Provider to draw against as costs are actually incurred. To help the Bureau and Fund Administrator determine a Provider’s approved estimate amount, Providers are required to identify in their application both their existing equipment and/or services and the replacement equipment and/or services they intend to purchase or have purchased to complete their RRD project. Reimbursement Program Providers can only receive funding disbursements for actual reasonable costs incurred, up to the amount of their funding allocation. May Providers purchase or otherwise obtain covered communications equipment or services after applications for reimbursement are approved? No. The Secure Networks Act prohibits Providers from purchasing, renting, leasing, or otherwise obtaining covered communications equipment or services using funds from any source (including reimbursement funds or funds from private sources) after the date that their applications to the Reimbursement Program are approved.17 Modifications to FCC Form 5640 Part C Information What modifications must and may be made after a Provider receives an allocation? Providers are required to submit modified cost estimates if their actual costs differ from previously approved line-item amounts or if an initial line-item estimate was based on a Cost Catalog average rather than a vendor or supplier quote. To do this, Providers must modify their cost estimate by submitting a SCRP Modification of Application for Funding Request filing via the SCRP Online Portal and provide the rationale for the modified costs before a Reimbursement Claim Request for the new amount can be considered. Providers may also submit modification filings to: • Update certain aspects of line items and itemized expenses, such as providing required details about replacement equipment and services; • Update the removal, replacement, and disposal timeline and plan submitted with the Provider’s application; and 17 47 U.S.C. §§ 1603(c)(2)(B), 1603(d)(4)(B)(i). 18 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions • Update location information for covered equipment and replacement equipment. While Providers may submit requests to modify the removal, replacement, and disposal timelines and plans submitted with their applications (more information on RRD timelines and plans is provided below), Providers must still complete the permanent removal, replacement, and disposal of covered communications equipment or services within one year from the initial disbursement of funds. The submission or approval of a modification request, including any updates to a timeline or plan, will not extend the deadline by which Providers must complete the permanent removal, replacement, and disposal of all covered communications equipment or services. Further, per the Secure Networks Act, Providers will be required to certify in their Final Certifications that they have “permanently removed from the communications network of the recipient, replaced, and disposed of . . . all covered communications equipment or services that were in the network of the recipient as of the date of the submission of the application of the recipient for the reimbursement[.]”18 Accordingly, Providers are required to remove, replace, and dispose of all covered communications equipment and services in their networks as of the date of the submission of the application and may not use this modification process to alter that date. How do Providers submit requests to modify FCC Form 5640 Part C information after an application has been approved? Please see the Secure and Trusted Communications Networks Reimbursement Program FCC Form 5640 Part G and Modifications of FCC Form 5640 Part C User Guide, available here. Do Providers have the ability to batch upload their site locations, equipment, and cost estimates when submitting modification requests? Batch upload is available for cost estimate modifications. Excel templates are available for download to allow Providers to bulk upload modifications to multiple cost estimates. While batch upload is not available to modify equipment or location information, Providers can modify equipment and location details on an individual basis. What forms of documentation will be required to support modified cost estimates? When modifying FCC Form 5640 Part C post-allocation, Providers must include actual vendor quotes, contracts, or invoices to support their cost estimates and may not use the average cost from the Cost Catalog. 18 47 U.S.C. § 1603(d)(6)(A). 19 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions What will be required to document a modification pertaining to existing covered equipment or services? See the section “Applying to the Reimbursement Program” above for information that a Provider may need to submit to support a modification pertaining to existing Huawei and/or ZTE equipment or services eligible for the Reimbursement Program. Can a Provider use a modification request to request confidential treatment of previously submitted FCC Form 5640 Part C information? If Providers determine an attachment should have been marked as confidential after submitting their application, they may submit an SCRP Modification of Application for Funding Request filing, which will allow the Provider to update the information in its FCC Form 5460 Part C for which confidential treatment is sought. However, if and until the modification filing is approved, the information not marked confidential will be publicly available. How should Providers enter cost estimates when replacing more than one unit of equipment or services? If the quantity of replacement equipment or services is greater than one, the Provider must manually update the “Provide Estimate of Costs (in USD)” (Column K) of the SCRP Excel Upload Cost Estimates Template to reflect the cost estimate associated with all units of the equipment or service being replaced. For equipment, the Provider should also update the “Quantity of Replacement Equipment” (Column P) with the quantity of equipment that this cost estimate includes. For services, Providers should pay close attention to the unit of measure in the Cost Catalog and reflect the appropriate expense in “Provide Estimate of Costs (in USD)” (Column K) for the quantity of services required. RRD Plans, Timelines, and Deadlines What is an RRD plan and an RRD timeline? Providers are required to certify in their FCC Form 5640 Part C applications that they have developed: (1) a plan for the permanent removal, replacement, and disposal of the covered communications equipment and services in their communications networks; and (2) a specific timeline for the RRD work. Providers are required to submit their RRD timelines and plans as part of their applications and then certify in their Final Certifications that they have complied with those timelines. 20 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions What is the deadline for completing an RRD plan? Providers must complete the removal, replacement, and disposal of the covered communications equipment and services in their networks within one year of the initial disbursement of reimbursement funds to the Provider. How should a Provider with multiple applications/FRNs calculate its RRD term? RRD terms are set on a per-application basis. When a disbursement for any cost actually incurred pursuant to an approved application is made, the one-year RRD term will begin for all work to be completed pursuant to that application. If a Provider submitted multiple applications that were approved, the RRD term for each application will be determined based on when the first disbursement is made for each application. Are Providers obligated to complete 100% of their RRD projects if they do not receive 100% allocation? Per the Secure Networks Act, a Provider must submit a Final Certification certifying, among other things, that it “has permanently removed from the communications network of the recipient, replaced, and disposed of . . . all covered communications equipment or services that were in the network of the recipient as of the date of the submission of the application of the recipient for the reimbursement[.]”19 Accordingly, Providers are expected to remove, replace, and dispose of all Huawei and/or ZTE communications equipment and services in their networks as of the date of the submission of the application even if they receive a prorated allocation from the Reimbursement Program due to funding constraints. We remind Providers that are eligible telecommunications carriers (ETC) seeking universal service funding that they remain subject to the requirements of section 54.11 of the Commission’s rules,20 which requires ETCs to certify that they do not use covered communications equipment or services prior to receiving a universal service funding commitment or support. This certification requirement goes into effect in February 2023. Can an RRD term be extended? Both the Secure Networks Act and the Commission’s rules authorize limited extensions of the one-year RRD term.21 The Commission may grant a general extension of the one-year term by a period of six months to all Reimbursement Program recipients if the Commission: (1) finds the supply of replacement communications equipment or services needed by the recipients to achieve the purposes of the Reimbursement Program is inadequate to meet the needs of the recipients; and (2) provides notice and detailed justification for granting the extension to the Committee on Energy and Commerce of the 19 47 U.S.C. § 1603(e)(4)(A)(iii); see also 47 CFR § 1.50004(m)(1). 20 47 CFR § 54.11. 21 Secure Networks Act § 4(d)(6)(B)-(C); 47 CFR § 1.50004(h). 21 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions House of Representatives and the Committee on Commerce, Science, and Transportation of the Senate.22 The need for a general extension may be informed by periodic status updates filed with the Commission, in which Providers are asked to address the availability of commercial equipment. In addition, the Bureau may grant individual extensions of a time period not to exceed six months on a case-by-case basis.23 A Provider requesting such an extension must show that, due to no fault of its own, it is unable to complete the permanent removal, replacement, and disposal by the end of the RRD term.24 Providers can submit Term Extension requests via the SCRP Online Portal using FCC Form 5640 Part H2 Term Extension Request. Requests must include a detailed justification for their request, and Providers requesting an extension may include documentation supporting the request for the extension. Providers also must download a pdf version of their FCC Form 5640 Part H2 Term Extension Request by submitting the form through the SCRP Online Portal, opening it from their Program Participant File, and clicking on the “Print” button on the top right of the page. Providers must then make these requests available to the public by filing them in the Commission’s Electronic Comment Filing System (ECFS) at WC Docket No. 18-89. If the filing contains confidential information, the Provider must submit a request to obtain confidential treatment of that information pursuant to section 0.459 of the Commission’s rules. For information about how to submit a filing in ECFS, including information about submitting a confidential filing, please refer to https://www.fcc.gov/ecfs/help/ecfs. To date, the Commission has not granted a general extension of the one-year RRD term. Though several commenters requested such an extension prior to the opening of the Reimbursement Program filing window, the Bureau found that such requests were premature when the Reimbursement Program had not yet commenced.25 Further, the Bureau found that granting such an extension, at that time, was “counter to Congress’ intent of having a one-year term.”26 Reimbursement Claim Requests & Payment Process When can Providers begin submitting invoices for reimbursement? Providers can submit invoices for reimbursement (Reimbursement Claim Requests) after their allocations have been approved. Providers must file at least one FCC Form 5640 Part G no later than one year after the FCC approved their FCC Form 5640 Part C. Failure to file within the one-year period will result in the FCC reclaiming the Provider’s funding allocation. Providers can continue to file Reimbursement Claim Requests during the RRD term and up until 120 days following the end of the Provider’s RRD term. Providers may also submit 22 47 CFR § 4.50004(h). 23 2020 Supply Chain Order, 35 FCC Rcd at 14354, para 17. 24 47 CFR § 1.50004(h)(1). 25 Finalized Forms Procedures PN, 36 FCC Rcd at 12210, para. 59. 26 Id. 22 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions modifications during the 120 days following the expiration of their RRD term to the extent they are necessary to process related reimbursement claims. Providers should note, however, that costs incurred after expiration of the RRD term are not eligible for reimbursement. How can Providers submit Reimbursement Claims for actual costs incurred? Providers can submit Reimbursement Claims via the SCRP Online Portal using FCC Form 5640 Part G and will need to include supporting invoices and other cost documentation with the submission. Detailed guidance can be found in the Secure and Trusted Communications Networks Reimbursement Program FCC Form 5640 Part G and Modifications of FCC Form 5640 Part C User Guide available here. Providers can submit multiple Reimbursement Claim Requests via the SCRP Online Portal as they incur expenses throughout the reimbursement period. Providers are required to link actual costs incurred and the supporting invoice documentation to their itemized cost estimates. Providers must submit invoices through the SCRP Online Portal as attachments to their FCC Form 5640 Part G. What standard will be applied to determine whether a cost is reimbursable? The FCC uses a “costs reasonably incurred” standard when determining whether a cost is reimbursable. This standard focuses on whether the cost is reasonably incurred for the removal, replacement, and disposal of Huawei and/or ZTE equipment and services. In evaluating the replacement equipment or service, the Commission focuses on reasonable costs for a comparable replacement. For an additional discussion on the difference between a comparable replacement and a technology upgrade for purposes of the Reimbursement Program, see the 2021 Supply Chain Order.27 A Provider’s Reimbursement Claim Request will be evaluated by the Fund Administrator and the Bureau based on information provided by the Provider in their FCC Form 5640 Part G filing. To determine whether the expense was “reasonably incurred,” they will consider whether the cost is typically incurred when transitioning from covered communications equipment and services to a replacement, the costs submitted in relation to alternative equipment and services, and the capabilities and functions performed by the replacement equipment and services as compared to the equipment and services removed. The Fund Administrator and the Bureau will use comparisons to the price ranges in the Cost Catalog, review supporting invoice documentation provided, and consider any additional justification or explanation submitted by the Provider. The approval process is designed to ensure reasonably incurred expenses are paid while at the same time guarding against waste, fraud, and abuse associated with the disbursement of federal funding. What supporting detail is required for reimbursement of expenses? When submitting a Reimbursement Claim Request, Providers will need to provide a vendor or supplier quote associated with the invoice in the Reimbursement Claim Request. Providers will be required to link actual costs incurred and the supporting invoice documentation to their itemized cost estimates. 27 2021 Supply Chain Order, 36 FCC Rcd at 11992-95, paras. 86-92. 23 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions Supporting documentation of the expense incurred must include a valid invoice, receipt, or other form of documentation that explains the nature and cost of the expense. Specifically, invoices submitted by Providers for reimbursement must include the following information: • Name of the vendor providing the service or equipment • Invoice number (assigned by the vendor) • Invoice date • Payment due date (Providers should use the payment terms to calculate and document the payment due date on the invoice if this information is not originally included) • Employer Identification Number (EIN) or Taxpayer Identification Number (TIN) of the vendor • Description of the service provided or equipment purchased • Explanation of why the expense is reimbursable under Reimbursement Program guidelines (which may be included in a cover letter) • Total invoice amount • Name of the Provider and Provider FRN • If costs are associated with a specific site location, include Location ID Note: Providers may not use a Cost Catalog average as documentation of an incurred expense. Do Providers need to revise cost estimates if the actual cost differs from the previously approved amount? Yes. Providers will be required to submit a revised cost estimate, by filing a SCRP Modification of Application for Funding Request, providing a detailed justification for cost estimate changes (increases or decreases) before a claim different from a previously approved amount, at the line item level, will be considered. Providers will be notified via the SCRP Online Portal by the Fund Administrator through a RFI if a revision is required. Reimbursement will not be made in excess of a Provider’s available allocation amount. Invoices exceeding the available allocation in whole or in part may be submitted as a Reimbursement Claim Request. An invoice that exceeds the available allocation in part will be reviewed for reasonableness and forwarded for payment solely with respect to the amount of the allocation that remains available. An invoice that exceeds the available allocation in whole will not be reviewed for reasonableness or forwarded for payment unless and until a subsequent allocation is made by the FCC. If a subsequent allocation is not issued by the FCC, those pending Reimbursement Claim Requests in excess of the Provider’s allocation amount will be denied. If an element of the approved cost estimate was based on the Cost Catalog price, does the Provider need to submit a copy of the vendor quote, contract, or invoice before requesting reimbursement? 24 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions Yes, Reimbursement Program Providers must submit a copy of the vendor quote, contract, or invoice supporting a cost estimate by filing a SCRP Modification of Application for Funding Request before filing FCC Form 5640 Part G for any claims for which the estimated costs were based on the Cost Catalog. What documentation is required when seeking reimbursement for invoices for in-house labor? For internal labor costs to be reimbursable, they must be entirely related to the Provider’s RRD project When seeking reimbursement for internal labor, Providers must provide details on a per-hour basis for each Reimbursement Program-related task, providing the labor hours incurred for each Reimbursement Program-related task, the internal labor rate used, and a total cost. The total cost for each task should therefore equal the total hours per task multiplied by the per-hour internal labor rate. Internal labor rates may include salary and benefits. Specifically, when submitting a Reimbursement Claim Request for internal labor, a Provider should provide the following documents (in place of an invoice from a third-party vendor): • A report detailing the employee name, the employee hourly/labor rates, a description of the work performed for each Program-related task, the number of hours worked, the date(s) of hours worked, and the resulting dollar cost. o This report should include an invoice number, invoice date, vendor name and EIN/TIN, and Provider name. • Copies of employee timesheets or paystubs (or Internal Revenue Service Form W-2 or Wage and Tax Statements) showing hours worked on each Program-related task, each day. Timesheet hours must match the totals reported by the task above. Timesheets may come from either the Provider’s time and expense reporting systems or can be manually prepared using spreadsheets or other means. In their review, the FCC and Fund Administrator will exercise their discretion in determining the reasonableness of hours and/or labor rates. Providers should be prepared to provide justification if additional information is requested by the Fund Administrator. Do professional services need to be performed prior to being submitted for reimbursement? Providers may only seek reimbursement for costs actually incurred. Professional services refer to different types of activities such as legal services, engineering professional services, and project management. Project management can include both reimbursement-related project management services (e.g., FCC Form 5640 planning, preparation, and filing support, invoice processing, and documentation collection and completion) and “in-the-field” technical project management services (i.e., vendor turnkey or bundled, technical management of on-site equipment removal, replacement, and disposal projects). All professional services, excluding “in-the-field” project management services, must be completed before the associated cost is submitted for reimbursement. 25 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions “In-the-field” project management services might entail contracts that include interval payments due for future performance periods. Providers may submit Reimbursement Claims for the costs incurred under these contracts provided that the invoices show that payment is owed and due on particular dates. Providers must submit a contract or quote with reasonable and explicit payment terms (e.g., down payment, progress payments, final payment, etc.) in addition to supporting documentation that details the various line items included in the services being provided and indicates whether or not those services have already been provided or are still anticipated to be provided. We remind Providers that all services under the contract must be completed before 100% of the contract expense can be reimbursed. Please refer to the Cost Catalog for a detailed list of the professional services eligible for reimbursement. For purposes of estimating cost using the Cost Catalog for the initial funding allocation request, Project Management (in particular 5.7.1 and 5.7.3) was limited to estimated costs for “in-the-field” technical project management services. Does equipment have to be delivered prior submitting invoice for reimbursement? Providers may submit invoices for equipment prior to receiving the equipment. However, the invoice must show that payment is owed and due on a particular date. All invoices must contain a payment due date in addition to the other metadata requested in the FCC Form 5640. Providers should use an invoice’s payment terms to calculate and document the payment due date on the invoice if this information is not originally included. When submitting a reimbursement claim for prepayment of equipment, Providers must submit a valid quote or purchase order that includes reasonable and explicit payment and delivery terms (e.g., down payment, installment payments, final delivery, etc.). We remind Providers that equipment must be delivered before 100% of the expense can be reimbursed. What supporting detail is required for reimbursement of professional services? All requests for reimbursement for professional services must be accompanied by a supporting vendor invoice. • Time and Material Billing – All professional services (e.g., legal work and reimbursement- related project management services), excluding engineering professional services or “in- the-field” technical project management, must be billed as time and materials and not as a fixed fee. For services performed on a “time and materials” basis, the invoice must identify the individual(s) who completed the work, specify the hours and dates worked by the individual(s), the associated rate(s) per hour, and a detailed description of each activity performed by each person. • Providers are strongly encouraged to provide documentation that includes detailed activity descriptions by day. However, when that level of detail is not available, a list of activities performed over a period of time may be accepted, as long as that period of time does not exceed one month. Invoices will be reviewed for reasonableness based on description of services provided relative to the total cost and technical aspects of the project; consideration of the timing of the Provider’s removal, replacement, and disposal 26 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions project; and consideration of the rate of the individual(s) relative to the type of work performed. For example, invoices covering a variety of legal services and that also include “reimbursement-related” services (e.g., FCC Form 5640 planning, preparation and filing support, invoice processing, documentation collection and completion) should demonstrate a difference in the rate charged by lawyers performing legal services and other professionals performing FCC Form 5640 planning, preparation, and filing support. • Fixed Fee Billing – Specific engineering professional services that result in work products or deliverables (e.g., system design, vendor selection, technical bid support, and subcontractor retention and management) may be billed to a Provider as a fixed fee. For professional services billed as fixed fee, the Provider must submit a copy of the vendor invoice and quote that provides a cost and activity “build-up” to support the expense. Fixed fee invoices must specify the time-period covered by the invoice, a description of the services rendered, and the amount due. Are Providers required to provide a cover letter when submitting reimbursement claims? Providers are not required to submit a cover letter; however, there are certain scenarios that warrant the provisioning of additional details about the expense(s) for which reimbursement is sought through a cover letter. These scenarios may include: • If any required invoice details are not included by the vendor on its invoice (please refer to “What supporting detail is required for reimbursement of expenses?” for a list of required invoice details). • If a partial payment is requested. A Provider may request a partial payment due to: o An equipment or service upgrade for which it is only requesting reimbursement for the amount associated with a comparable equipment or service; o A non-reimbursable cost included on the invoice but not requested for reimbursement; or o An invoice that is split across multiple applications. • If an invoice submission is not clearly related to the cost category in which it is submitted. When submitting a cover letter, please be sure it includes the corresponding invoice number, vendor name, and Provider FRN. If a Provider has a RRD plan that requires a vendor to perform work that is both eligible and ineligible for reimbursement, how should the Provider delineate those expenses in the documentation it submits to support its Reimbursement Claim Request? Providers must clearly delineate the work the vendor performed, as reflected in the invoice, that the Provider believes is reimbursable. Providers may provide this explanation by submitting a cover letter, clearly marking up the invoice to highlight reimbursable costs, and/or any other means that will indicate the reimbursable costs included on the invoice. 27 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions How will the review process for reimbursement claims be impacted if a Provider has an active SCRP Modification of Application for Funding Request? When a Provider’s application has an active modification that is under review or has been issued an RFI, the review process for reimbursement claims that include cost estimates directly related to the modification will be paused until the modification is approved or approved in part. When will Providers receive reimbursement payments? Reimbursement Claim Requests will be reviewed by the Fund Administrator and approved or denied by the FCC. Approved Reimbursement Claims Requests will be forwarded to the U.S. Treasury for disbursement. Providers will receive reimbursements via Automated Clearing House payments from the U.S. Treasury into the bank account they identify via the DUNS number on file. There are many variables that affect the timing of receipt of payments, including documentation provided and any additional documentation that may be requested. Providers can facilitate timely processing of requests by ensuring the accuracy of all information entered in their application, attaching any explanatory and/or documentary materials needed to justify an expense, and responding timely to any requests for information from the Fund Administrator. The Provider also must have a registered SAM.gov Unique Entity ID (UEI) code so approved payments can be transferred to the Provider’s bank account. Provider disbursements are subject to the Treasury Offset Program. In the event that a Provider is listed on the Do Not Pay Listing, the Treasury Department can garnish the disbursement to offset the Provider’s liability to the Federal Government. Any variance between the approved disbursement by the FCC and the amount received by the Provider could be due to Treasury’s internal policies and procedures related to the Offset Program. How does a Provider submit bank account information to receive payment(s)? Providers were required to register in SAM.gov prior to submitting their FCC Form 5640 Part C, to verify they were eligible to receive funding from the U.S. Government. Once registration was completed, SAM.gov issued a UEI, which is used to properly route disbursements. Providers are required to ensure their SAM.gov registration remains active throughout their participation in the Reimbursement Program. Without an active registration with SAM.gov, Providers will not receive disbursements from the Treasury Department. This is imperative to receiving reimbursements in a timely fashion. Must invoices be paid in full prior to submitting them for reimbursement? No. Reimbursements can be made on a cost incurred basis as evidenced by a valid invoice. Providers do not need to pay an invoice before submitting it for reimbursement. The invoice must show that a valid payment is owed and due on a particular date. All invoices must contain a payment due date in addition to the other metadata requested in the FCC Form 5640. Providers should use an invoice’s payment terms to calculate and document the payment due date on the invoice if this information is not originally included. 28 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions Many reimbursable expenses will be billed and owed in installments. Providers can submit invoices and other cost documentation as payment of each installment is requested by the vendor. The SCRP Online Portal permits Providers to specify the portion of the invoice for which they are requesting reimbursement. For example, if 10% of the total amount of the sales order is reflected on the invoice with a specific date due, the FCC Form 5640 Part G allows Providers to request reimbursement for only that 10% that is due, and to return to the expense to add further cost documentation to the same cost estimate line item when additional installments become due. Will Reimbursement Program funds received by Providers be subject to income tax? The Commission does not provide tax advice. The IRS did, however, release a letter providing tax guidance on various factual scenarios regarding Providers in the FCC’s broadcast incentive auction reimbursement program.28 While the factual scenarios do not exactly match the scenarios involved in the Reimbursement Program, the guidance provided may prove helpful in understanding the tax consequences and considerations when receiving Reimbursement Program support. As noted in the IRS letter, those seeking determinations on a specific factual pattern can request a private letter ruling from the IRS national office.29 What happens if Providers do not use all money disbursed for the equipment or services included in a reimbursement claim? Reimbursed amounts that are either unused, returned to a Provider by a vendor, or subsequently found to be ineligible based on supplemental information must be returned to the Reimbursement Program. Providers must work with the Fund Administrator to return these funds. What happens if Providers do not use all of their allocation before their programmatic invoice submission deadline? Per the FCC’s rules, following the expiration of the Reimbursement Claim Request deadline, any unclaimed funding allocated to a Provider will revert to the Reimbursement Program fund for potential allocation to other Reimbursement Program Recipients.30 Each FCC Form 5640 Part C that is filed and granted will receive its own separate funding allocation. As the Wireline Competition Bureau has made clear, “once the Bureau makes a funding allocation determination, the Bureau will not adjust the funding allocation amount even if there is a change in the participant’s plans or if actual costs exceed estimated costs.”31 The FCC will allow for reallocation of unclaimed funds among affiliated Reimbursement Program participants post-allocation, notwithstanding the limitations on funding allocations discussed above. 28 See https://ecfsapi.fcc.gov/file/60001012319.pdf (Appx., Letter from IRS to Howard Symons dated July 3, 2014). 29 Revenue Procedure 2014-1, 2014-1 Internal Revenue Bulletin 1. 30 47 CFR § 1.50004(g)(2). 31 See Finalized Form Procedures PN, 36 FCC Rcd at 12204-05, para. 41. 29 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions To reallocate unclaimed funding, the participant will need to access their Program Participant file in the SCRP Online Portal to initiate an Allocation Transfer Request. The participant must specify (a) the application from which to transfer funds; (b) the application to receive the transferred funds; and (c) the amount. How will the FCC handle transactions for RRD work between entities with common ownership? It is anticipated that Recipients and their vendors will be separate entities free from financial or ownership relationships. There may, however, be instances when Recipients and vendors have common ownership. To assist the FCC and Fund Administrator in guarding the Reimbursement Program against fraud, waste, and abuse, Recipients may be asked to follow additional procedures or provide additional supporting documentation when potential transactions between entities with common ownership are identified during the invoice review process. Additional procedures or documentation will seek to ensure that Recipients receive reimbursement only for actual expenses incurred and that neither Recipients nor their employees benefit monetarily from the Reimbursement Program, which would constitute an abuse of Reimbursement Program rules. Though specific circumstances may vary and will be handled on a case-by-case basis when common ownership is identified, Recipients will be instructed to bill the expense appropriately based on the expense type and at cost, providing supporting documentation demonstrating a monetary transaction has taken place between the two entities and that no mark-up has been applied. Can Providers add all invoices as one attachment and refer to the same attachment for every invoice submission? Providers must only include one invoice when uploading to the invoice .pdf attachment field, although additional supporting documentation such as a cover letter or quote may also be included in the same attachment and the invoice may include multiple line items related to different portions of the Provider’s RRD plan. Providers may not combine multiple invoices into a single document that is uploaded as the invoice .pdf attachment. Each incurred cost must be submitted as its own reimbursement claim with its own specific related supporting documentation inclusive of an invoice and any other additional support such as cover letter, quote, etc. Additional supporting documentation for a particular invoice may be added to the Attachment Metadata section. Reporting, Compliance Monitoring, and Investigations What reports are Providers required to file once applications for reimbursement have been approved? There are two reports that all Providers must file on a periodic basis. First, Providers must file status updates with the Commission every ninety days beginning on the date that their application for a reimbursement is approved. The first status updates from all Providers were due on October 13, 2022, 30 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions with each subsequent status update due every 90 days thereafter. Status updates must report on the work the Provider is performing to permanently remove, replace, and dispose of their covered communications equipment and services, including the efforts undertaken and the challenges encountered in performing that work. The status updates must also state whether the Provider has: (1) fully complied with, or is in the process of complying with, all requirements of the Reimbursement Program; (2) fully complied with, or is in the process of complying with, the commitments made in the Provider’s application; (3) permanently removed from its communications network, replaced, and disposed of, or is in the process of permanently removing, replacing, and disposing of, all covered communications equipment or services that were in the Provider’s network as of the date of the submission of the Provider’s application; and (4) fully complied with, or is in the process of complying with, the timeline submitted by the Provider in their application. Each status update must include a certification that affirms the information in the update is accurate. Status updates must be filed every ninety days until the Provider notifies the Commission of the completion of the permanent removal, replacement and disposal of the covered communications equipment or service in its Final Certification. Status updates will be made public and will be posted on the FCC’s website no earlier than 30 days after submission. The obligation to submit a status update applies to all Providers, including those that have not yet submitted a Reimbursement Claim Request. Second, once a Provider receives an initial disbursement from the Reimbursement Program, it must begin filing spending reports with the Commission twice a year, by February 10 and August 10. Spending reports must state how the reimbursement funds disbursed to the Provider have been spent, including a detailed accounting of the covered communications equipment or services permanently removed and disposed of and the replacement equipment or services purchased, rented, leased, or otherwise obtained using reimbursement funds. Providers must file a final spending report following their submission of the Final Certification that shows the expenditure of all funds received as compared to the estimated costs identified in their FCC Form 5640 Part C applications. This final spending report must be filed no later than 60 days after the expiration of the Provider’s reimbursement claim request deadline. Where does a Provider file status updates? An additional section of FCC Form 5640, Part K, is now available via the SCRP Online Portal. This is the mechanism through which Providers will submit status updates. Where does a Provider file spending reports? An additional section of FCC Form 5640, Part L, is available via the SCRP Online Portal. This is the mechanism through which Providers will submit spending reports. 31 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions What is the Final Certification requirement and how are Final Certifications filed? No later than ten days after the conclusion of a Provider’s RRD term, the Provider must submit a Final Certification to the Commission that indicates whether the Provider has fully complied with (or is in the process of complying with): (1) all terms and conditions of the Reimbursement Program; (2) the commitments the Provider made in its application for eligibility in the Reimbursement Program; and (3) the timeline the Provider submitted as part of its application for eligibility in the Reimbursement Program. This certification must also indicate whether the Provider has permanently removed, replaced, and disposed of all covered communications equipment and services that were in the Provider’s network as of the date of the submission of the application for eligibility in the Reimbursement Program. Providers must submit this Final Certification via the SCRP Online Portal. Will Providers be subject to audits or other investigations? Providers may be subject to a variety of audits, site visits, and proof of payment requests to assist the FCC and Fund Administrator in assessing whether Providers are complying with the requirements of the Secure Networks Act, the Commission’s rules, and program procedures and guard the Reimbursement Program against fraud, waste, and abuse. Audits may be conducted by various oversight bodies, including but not limited to, the FCC, the Fund Administrator, Office of Inspector General (OIG), Government Accountability Office (GAO), or U.S. Department of Treasury. A Reimbursement Program participant has an ongoing obligation to cooperate with program audits and investigations and to retain documentation supporting its requests for reimbursement for a period that extends 10 years after the date the Provider receives its final payment from the Reimbursement Program Fund. Reimbursements will only be made for actual costs incurred as evidenced by a legitimate third-party invoice provided as documented evidence. Each reimbursement claim submission requires the Reimbursement Program participant to certify to its accuracy and compliance with the Reimbursement Program and FCC rules, and any applicable federal statutes. Should an audit reveal that a Provider submitted false or inaccurate information when submitting a Reimbursement Claim Request for which it subsequently received a disbursement of funds or that the Provider used reimbursement funds for expenses unrelated to its RRD project, the Provider will be required to return such funds to the FCC. What documentation should Providers retain in order to comply with Reimbursement Program requirements? In the 2020 Supply Chain Order, the Commission advised Providers to retain all documentation related to their requests for funding reimbursement for actual expenses incurred (including relevant invoices and receipts) for a period of ten years. As such, Providers should retain documentation for each step of the removal, replacement, and disposal process in order to verify compliance with this requirement (e.g., records concerning the type, quantity, and location of existing covered communication equipment 32 Updated as of 03/12/2024 Secure and Trusted Communications Networks Reimbursement Program: Frequently Asked Questions and services, records concerning the purchase of replacement equipment). As it relates to disposal efforts in particular, Providers should: • Retain shipping or transportation documentation, including detailed inventories supported by an affidavit, dates, locations, transportation service provider name, and means of transportation. • Retain certificates of media disposition and certificates of destruction that will help Program Recipients and the Commission verify compliance with their disposal and verification obligations. • Maintain a chain of custody for removed covered communications equipment awaiting destruction or recycling. • Maintain a detailed inventory of all items removed from a site. This inventory should be dated by the date of removal, include how the items are being destroyed, where the equipment is being shipped, and the means of transportation to the recyclers. This documentation could take the form of short affidavits, receipts for storage facilities, affidavits attesting to the storage conditions, and photographic or video documentation. • Have the disposal company maintain sufficient documentation evidencing the destruction of the equipment. At a minimum, the disposal company should be able to provide the Provider with a certificate of destruction, where applicable. Providers are also advised to maintain records to verify compliance with other requirements of the Secure Networks Act and the FCC’s rules, including, but not limited to, copies of reports that are required to be submitted to the FCC and records substantiating any statements of fact in petitions or other requests for relief submitted to the FCC. 33 Updated as of 03/12/2024