NTIA Posts Conditional Waiver for BEAD Letter of Credit Requirements

NTIA provides alternatives to LoC requirements

NTIA has posted notice “of a conditional programmatic waiver of the letter of credit requirements set forth in…the BEAD Program Notice of Funding Opportunity.” The waiver provides several conditional exceptions to the NOFO’s requirements for letters of credit (LOC).

• The waiver permits applicants for BEAD funding to use a credit union in lieu of a bank if the credit union “is insured by the National Credit Union Administration” and “as a credit union safety rating issued by Weiss of B− or better.”
• The waiver also allows applicants the option to use performance bonds in lieu of a letter a credit. During the application process, applicants must submit a letter from an authorized entity “committing to issue a performance bond.” Before accepting any funding awards, recipients must obtain such a bond, “in a value of no less than 100 percent of the subaward amount.”
• In the case of both letters of credit and performance bonds, NTIA has also waived the requirement that letters of credit must have a value at least 25% of the grant award amount, or the bond at least 100%. This waiver is conditional on applicants setting “specific deployment milestones,” each of which would require “a new a letter of credit in a reduced amount.”
• NTIA will also allow applicants to come in under the 25%/100% thresholds for LOC/bonds so long as funding is provided “on a reimbursable basis…for periods of no more than six months” and that the recipient “commits to maintain a letter of credit or performance bond in the amount of 10% of the subaward until it has demonstrated…that it has completed the buildout of 100 percent of locations to be served by the project or until the period of performance of the subaward has ended.”

Alex Karras is a Senior Fellow at the ACLP.