E-rate program rules impose significant restrictions on applicants and consultants regarding the direct or indirect solicitation or acceptance of gifts from service providers or prospective service providers. Gifts are defined as gratuities, favors, entertainment, loans, or any other thing else of value.
The purpose of these restrictions is to ensure a fair and open competitive bidding process that is free from any conflicts of interest. Any offering, acceptance, or request of gifts between involved parties is considered a competitive bidding violation. There are limited exceptions to the gift prohibition, which mirror federal government regulations. You should also be aware of the prohibition of free services.
Exceptions to the gift rule include items worth $20 or less. Applicants may not accept gifts with a retail value greater than $20, which include but are not limited to gifts for attending seminars; marketing calls; loans of products, including those characterized as on-site product demonstrations; services or equipment; or trainings. For example, meals and/or prizes at conferences are permitted if they are worth $20 or less.
The combined value of items received by any individual may not exceed $50 from any one source per funding year. “One source” includes all employees, officers, representatives, agents, independent contractors, and directors of a service provider.
Service providers may provide charitable donations, as long as those contributions are not directly or indirectly related to E-rate procurement activities or decisions and are not given to circumvent the competitive bidding rules, including requiring applicants to pay for their non-discount portion of eligible costs.
Gifts from an employee of a service provider that are given to family or friends that work for a school or library must be purchased with the service provider employee’s personal funds and cannot be related to a business transaction or business relationship.
If applicants suspect a violation, they must promptly return the item, dispose of it, or pay the donor its market value. Applicants should keep a record of this return, disposal, or payment on file in case of future questions.
Restrictions on gifts apply all year, not just during the competitive bidding process.