Today, I want to discuss the Broadband Equity, Access, and Deployment Program, which is commonly referred to as BEAD. This program is providing $42 billion in capital to expand high-speed internet access nationwide.
The outline of the program is within the Infrastructure, Investment, and Jobs Act. The US government is providing $42 billion in funding to increase access to broadband throughout the US.
You may be wondering why your surety-bond broker is discussing a Broadband Equity, Access, and Deployment Program. The reason is that the US government requires bonds for these projects and will need a completion guarantee. The government will require a Performance and Completion Guarantee that the contractor awarded the grant (the $42 billion will be given over numerous grants), ensuring that the project will be completed. Once completed, the developer owns the infrastructure, allowing them to operate a broadband network. The bond guarantees that the contractor will complete the project within a specified timeframe and to a specified level of acceptability.
My office works with the client to obtain the bond needed to be awarded the contract/ grant. We work with the client to determine whether they have experience performing the work, the capital needed to fund the work, and to look at their background to determine whether or not they are bondable. It is beneficial when they’ve performed a similar type of work before. If the developer is not self-performing the work, one of the biggest questions will be whether or not they are using contractors who have experience performing the scope of work needed to complete the project.
In addition to the project details, construction timeline, and resumes on key people, the surety will also review the client’s financials to determine whether they qualify for the bond. Financials should be a P&L and a balance sheet for the company, along with information on available credit facilities. Financials related to an individual should be a personal financial statement, bank/ brokerage statements, and tax returns.
Lining this bond up well in advance of accepting or even bidding on the project allows the client to know that once awarded the project or the grant, they can obtain the bond quickly and move forward with what will hopefully be a very profitable opportunity. Working with a bonding agency that is familiar with the intricacies of these types of bonds allows the client to develop a winning strategy, thereby gaining more access to the broadband network.
Please call me today to discuss your situation.
Neil Pedersen
PEDERSEN & SONS SURETY BOND AGENCY, INC.
15 Maiden Lane, Suite #800
New York, NY, 10038
212-227-7277
neil@courtbondnow.com
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