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Payment Process:
> Payment Process Overview
Payment Process
The FCC charged Sprint Nextel with funding the reconfiguration costs of
affected licensees. To ensure that sufficient funding is available for
the reconfiguration, the FCC required Sprint Nextel to obtain irrevocable
Letters of Credit in the amount of $2.5 billion as security for payment
of affected licensees’ reconfiguration costs.
In order to obtain funding for reconfiguration or related planning activities, licensees must enter into a Frequency Reconfiguration Agreement or Planning Funding Agreement with Sprint Nextel, and these agreements must be approved by the TA. Licensees are required to submit estimates of the cost of their reconfiguration or planning activities defining the scope and cost of the work as soon as possible, together with instructions to Sprint Nextel to pay the licensee, its vendors or both. Licensees are free to use their own personnel or vendors to perform reconfiguration and related planning activities.
When vendors will perform some or all reconfiguration or related planning activities, licensees will contract directly with vendors for that work. Licensees and vendors are free to negotiate the scope of work, pricing arrangement and payment terms (such as firm fixed price, milestone-based billing, time-and-materials up to a "not-to-exceed" amount, etc.), subject to the approval by Sprint Nextel and the TA of the licensee's cost estimate for its reconfiguration and related planning activities. The licensee/vendor agreements also should specify whether the vendor will be paid by the licensee or by Sprint Nextel.
By accepting payment from funds provided by Sprint Nextel for the reconfiguration or related planning services, each vendor shall be deemed to have agreed to comply with certain vendor terms and conditions. These terms and conditions shall apply to vendors receiving payments for performing reconfiguration services made on or after March 1, 2006.
Sprint Nextel will make the following types of payments:
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Direct payments to vendors who provide goods and services to licensees for their reconfigurations and associated planning activities as agreed to with licensees. |
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Payments directly to licensees for:
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Costs incurred by licensee personnel in performing reconfiguration or planning activities.
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Vendor costs paid directly by the licensee.
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The TA will monitor the payment process to ensure that Sprint Nextel pays licensees and
vendors according to the agreed payment terms in the TA-approved Frequency Reconfiguration
Agreement or Planning Funding Agreement. If Sprint Nextel fails to pay either the licensee
or its vendors within 30 days of the applicable Payment Obligation Date and fails to show
good cause for such non-payment, the TA will issue a draw on the Letters of Credit to make
such payment. In the event of a payment dispute, mediation before the TA may be available.
Payment Process Overview
Following is an outline of steps that licensees should follow in the Payment Process. Several
of these steps are described in more detail within this Handbook. In those cases, references
are made to the relevant sections within the Handbook.
1. Submit Request for Planning Funding (RFPF), if necessary, to the TA
If you require funding for planning activities, a Request for Planning Funding, together with supporting documentation should be submitted to the TA as soon as possible.
Requests for Planning Funding will be accepted from licensees, but not from vendors or consultants. Your vendors or consultants may assist you in preparing an RFPF, but because it will become part of your Planning Funding Agreement (PFA) with Sprint Nextel, you are responsible for submitting the RFPF and making certain representations about the information contained within the RFPF.
RFPFs should be sent to the TA via email (in PDF format if possible) to Comments@800TA.org or by fax to 888-701-4380.
PFA Fast Track Option
The PFA Fast Track Option (Fast Track) provides a means for licensees and Sprint Nextel to streamline their efforts to execute a PFA. Fast Track does not require different action on your part when submitting your RFPF. Rather, it allows licensees, whose RFPF submissions meet certain guidelines, to more quickly secure planning funding. To qualify for the Fast Track Option, the licensee must be able to determine a reasonably accurate subscriber unit count. In addition, the following guidelines should be met:
- The total planning funding request should equate to $55 or less per subscriber unit
- The total legal costs should be 8% or less of the total request
- The total costs for project management should be 25% or less of the total request
If all of these guidelines are met, and the TA has approved the RFPF submission for conformance with program guidelines (including that the costs are reasonable and prudent expenses directly related to the retuning of an 800 MHz system), Sprint Nextel will incorporate it into a PFA.
Standard 60-Day Negotiation Process (Non-Fast Track Submissions)
If the RFPF submission does not qualify for Fast Track, the RFPF will follow the standard 60-day negotiation process, wherein Sprint Nextel and the licensee have 60 days of negotiations to reach a PFA. The TA will contact both the licensee and Sprint Nextel on a regular basis to monitor the progress of negotiations. Once a PFA is reached, it must be submitted to the TA for review of the planning costs. If an agreement is not reached within 60 calendar days from the date of Sprint Nextel's receipt of the RFPF from the TA, the TA will recommend that parties pursue mediation. If the parties have entered the mandatory negotiation period, then TA mediation will be mandatory.
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Any Wave 4, Stage 1 licensee receiving a Frequency Proposal Report (FPR) on or after August
1, 2006 or any Wave 4, Stage 2 licensee receiving an FPR on or after December 18, 2006 will have
45 calendar days from the date of the earliest NPSPAC FPR cover letter received to submit the
RFPF. The RFPF deadline will be noted in the FPR cover letter. |
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If you have missed the previously established deadlines for submitting your RFPF, the TA
recommends that you incorporate your planning costs into the Cost Estimate for the FRA. However,
if you otherwise believe that a PFA for your planning costs is needed prior to negotiating an FRA,
you should provide an explanation to the TA as to why you could not submit your RFPF previously
together with details regarding any unique circumstances of your reconfiguration which require
that planning funding be provided prior to negotiating an FRA. |
RFPF Submission Process
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RFPFs should be submitted to the TA via email (in PDF format if
possible) to Comments@800TA.org
or by fax to 888-701-4380. The RFPF instructions and template are
available on the TA's website www.800ta.org.
All licensees submitting RFPFs after June 19, 2006 must use RFPF version 2.6. |
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For Fast Track submissions, the TA will validate that the RFPF meets the guidelines for the
Fast Track Option, confirm that the submission conforms to TA instructions, and ensure that
costs are reasonable and prudent expenses directly related to the retuning of an 800 MHz system.
The TA will then forward the RFPF to Sprint Nextel. Sprint Nextel will expeditiously prepare
the PFA for the approved amount. Should additional planning costs be identified once the RFPF
is submitted to the TA for review, contact the TA immediately. The TA will determine the
appropriate course of action based on the nature and extent of the addition. It is important to
note that Fast Track submissions are expected to be complete and accurate to facilitate the Fast Track process. |
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For non-Fast Track submissions, The TA will validate the RFPF submission and confirm that
the supporting documentation conforms to TA instructions and contains appropriate level of
detail. This initial review does not represent TA approval of the proposed planning activities
and costs or TA acceptance of the rates. All planning activities and costs, including rates
identified, are subject to negotiations between Sprint Nextel and the incumbent licensee. Once
the RFPF and supporting documentation are determined to conform to TA instructions, the TA will
forward them to Sprint Nextel, with a communication to both parties requesting that a negotiation
schedule be established within 5 business days. The TA will contact both the licensee and
Sprint Nextel on a regular basis to monitor the progress of negotiations. Once a PFA is
reached, it must be submitted to the TA for review of the planning costs. If the licensee and
Sprint Nextel do not reach agreement within 60 calendar days (includes the 5 days provided to Sprint Nextel to establish a PFA negotiations schedule with the licensee) from the date of Sprint Nextel's receipt of the RFPF from the TA, the TA will recommend that the parties pursue mediation. If the parties have entered the mandatory negotiation period, then TA mediation will be mandatory. |
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For more information on preparing Requests for Planning Funding, please refer to the sections of this Handbook entitled "Submit Request for Planning Funding". |
2. Submit a Cost Estimate to Sprint Nextel.
To obtain funding for reconfiguration, submit a Cost Estimate (and SOW for complex systems) of your system reconfiguration to Sprint Nextel.
Cost Estimates will be accepted from licensees, but not from vendors or
consultants. Your vendors or consultants may assist you in preparing the
Cost Estimate, but because it will become part of your Frequency Reconfiguration
Agreement with Sprint Nextel, you are responsible for submitting the Cost
Estimate and making certain representations about the information contained
within the Cost Estimate.
You may submit your Cost Estimate to Sprint Nextel via email to 800MHz@Sprint.com
or by fax to 678-405-8252.
Timeline for Submissions
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The schedule established in the RPP will be used as a reference in prioritizing review
of Requests for Planning Funding and Cost Estimates. Accordingly, Requests for Planning
Funding and Cost Estimates of earlier Waves will take precedence over those of later Waves.
Channels 1-120 Stages will take precedence over NPSPAC Stages. |
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Cost Estimates for reimbursement of actual system reconfiguration costs generally should not
be submitted until a licensee's voluntary negotiation start date. The TA however, expects that there will
be exceptional situations requiring early review. Valid reasons may include reconfiguration of
large and complex systems, systems spanning more than one Stage/Wave and systems involving
multiple organizations. If the licensee and Sprint Nextel jointly agree to submit an FRA prior
to the defined start date, the TA will agree to review such FRAs early. The submission dates for
each Wave and Stage of the RPP are identified in the table below: |
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Figure 7:
Start Dates for Submission of Cost Estimates and Deadlines for RFPF Submission
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For more information on preparing Cost Estimates, please refer to the section of this Handbook entitled
"Prepare a Cost Estimate."Additional Cost Estimate Guidance (Guidelines and Template) is available on the TA's
website at (www.800TA.org/content/documents/cost_estimate.asp). |
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