Buy America
Industry Insight Series

This is the second article in a 3-part series on navigating the Broadband Equity, Access and Deployment Program (“BEAD”) funding process and requirements. The first article explained the Buy America waiver issued in August by the Department of Commerce and National Telecommunications and Information Administration (NTIA). This piece examines how BEAD will impact procurement processes. The final installment in this series, published in the coming weeks, will discuss building partnerships for BEAD.

Anyone who has ever run or participated in a bid process knows that most procurements are tedious and time consuming. When you couple that with the complexities and requirements of the BEAD program, it becomes a necessity for BEAD applicants to conduct procurements before their grant applications are submitted.

For background, it’s important to note that BEAD funding will be distributed by each state through competitive grant programs. The timeline for each state’s program is dependent on when NTIA approves that state’s Initial Proposal. A good indicator that a state is getting close is when that state opens its challenge process for the locations it thinks are eligible to receive BEAD funding. Once that happens, it is likely the state is within 4-6 months of opening its grant window.

You are probably thinking one or both of the following. First – how can we conduct procurements on a project that may or may not be funded? And second – how can we know what the grant requirements are now? Both are valid points. However, a bid award can be made conditional on the basis that the award is received and most of the core BEAD requirements are federally mandated and already published. Waiting until after the award is issued will put your grant application at significant risk because:

  1. Grant budgets must be accurate
  2. Products and materials purchased must comply with Buy America
  3. Contractors must meet BEAD deployment timelines

Grant budgets must be accurate. This cannot be overstated. Once a grant is approved, the awardee does not have the ability to ask for additional monies should they encounter budget overruns. Many grant applicants create their project budget based on data at their fingertips for prior deployments or based on placeholder averages.

This is where a BEAD applicant is likely to run into trouble because the BEAD requirements will most certainly increase costs from a typical deployment. Those requirements include, but are not limited to, labor and fair wage, Buy America, cybersecurity, climate resiliency, post-award reporting and tight deployment timelines The only way to guarantee an accurate budget is to obtain accurate quotes while you are developing your grant application.

Next – Buy America requirements are a singular threshold requirement for BEAD for the purchase of certain materials and products. You may find that products of choice are not Buy America compliant or waived.

For those broadband products that are not likely to be waived (OLTs, OLT line cards, OLT optics modules, ONTs, fiber and enclosures), availability on product type is likely to be limited, cost is likely to be increased and the demand for these products is likely to be high. BEAD applicants will need to state how they are meeting the Buy America requirements in their applications. As such, this requires a pre-application procurement to determine cost and availability.

Finally, the BEAD deployment timeline is a compressed 4 years. This includes the timeframe for conducting an environmental assessment, permitting, etc. The unprecedented demand for deployment services (design, construction, etc.) and labor shortages are likely to strain resources, increase costs and lengthen the amount of time projects will take to complete. Obtaining commitments and pricing before the grant application is submitted will increase your chances of being approved and mitigate the cost and timeline risks that will increase significantly post-award.

The BEAD program is complex with significant requirements that could impact price, deployment timelines and your budget. Applications are also time consuming to pull together. Put your best foot forward by spending the time now to conduct your procurements and mitigate your risk.

This series features insight into important broadband industry issues from industry leaders.

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