BEAD Letter of Credit and Performance Bond Programmatic Waiver Implementation in West Virginia

BEAD had originally mandated that states require deployment subawardees to obtain a Letter of Credit from an eligible bank with a value of at least 25% of an award’s amount.  However, the NTIA subsequently issued a Notice of Programmatic Waiver allowing states to loosen this requirement (https://broadbandusa.ntia.gov/funding-programs/policies-waivers/BEAD-Letter-of-Credit-Waiver).  The Notice provided four different options for extending subawardees additional flexibility.

1.  Subawardees may obtain the Letter of Credit from an eligible credit union, in addition to an eligible bank

2.  Subwardees may obtain a qualified performance bond instead of obtaining a Letter of Credit 

3.  Subwardees may step down the amount of the Letter of Credit or performance bond based on progress toward completion of project milestones

4.  Subwardees may obtain a Letter of Credit or performance bond for only 10% of the award amount

Please see the Notice of Programmatic Waiver for the full description of each of these options.

WVDED is adopting options #1, #2, and #4 for its implementation of BEAD.  WVDED has chosen to implement option #4, not #3, as this option provides more flexibility to subawardees in the amount of the Letter of Credit or performance bond.  (Option #3 allows Letter of Credit or bond amounts to be stepped down progressively to the 10% level, while option #4 allows subawardees to use 10% from the outset.)

WVDED will provide applicants a Model Letter of Credit during the pre-application phase.  Please refer back to this page for updated information on this Model. 

Please note that applicants do not need to provide the actual Letter of Credit or the performance bond at the pre-application phase; that will be required later in the process prior to final award, based on the actual amount to be awarded. At the pre-application phase, an applicant must submit a commitment from an eligible entity to provide the Letter of Credit or performance bond, up to a specified dollar amount.   The commitment to provide a Letter of Credit must be a letter from an eligible bank or credit union committing to provide such a Letter of Credit if an award is made, including reference to the terms of the Model Letter of Credit and a maximum amount for the Letter of Credit that the institution would be willing to provide.