003.19.16-5. Qualifications for Receiving BEAD Funding
AR ADC 003.19.16-5Arkansas Administrative CodeEffective: January 1, 2024
Effective: January 1, 2024
Ark. Admin. Code 003.19.16-5
003.19.16-5. Qualifications for Receiving BEAD Funding
<Emergency action effective Jan. 01, 2024.>
ARConnect has designed a thoughtful and comprehensive process based on its experience with prior State and federal funding opportunities. ARConnect's BEAD deployment subgrantee award process will include six stages of activities:
ARConnect will begin outreach and communication with potential applicants following submission of the Initial Proposal Volume II to NTIA. Initial communication will aim to foster a broad set of potential applicants, but will not include detailed requirements, timelines, or rules until the approval of the Initial Proposal Volume II. Once the Initial Proposal Volume II is approved, ARConnect will release detailed materials reflecting the input from NTIA. This material will include:
6. Following closing of the Challenge Process and finalization of eligible BSLs and CAIs, a set of data necessary for applicants to produce successful bids, such as lists and maps of BSLs and CAIs, a reference subsidy for each Census Block Group (CBG), and a list of relevant local government organizations recommended for bidders to coordinate with during their preparation.
This early communication is intended to allow potential applicants to begin preparing any internal resources needed for participation in bidding and to support the maximum number of successful bids across the State. ARConnect will utilize email, website and social media, the State procurement system, virtual meetings, and in-person meetings to distribute information in early communication.
The purpose of pre-bidding activities is to provide technical support for applicants as they prepare their bids and to front-load any administrative tasks to reduce the burden on both ARConnect and applicants during the bidding and adjudication. Technical support for applicants will make use of a “round zero” dry-run period of the bidding process. During this period, applicants will be encouraged to submit dummy bids to ensure they understand the mechanics of the application. In parallel, ARConnect will complete a test run of the adjudication process. This round zero will enable two key preparation objectives: First, it will allow ARConnect to provide technical assistance for any applicants that have challenges with submitting satisfactory bids. Second, it will provide an opportunity for ARConnect to revise and publish the bidding rules should any logistical issues be identified during the round-zero bidding.
In addition to the round-zero bidding, applicants will be required to submit prequalification applications to confirm the following:
3. Certification of applicants' willingness to abide by certain BEAD requirements, such as support for BABA and EHP requirements and anti-collusion and conflict-of-interest provisions, as described in Section 5.6 of this document and pursuant to the Arkansas state policy on anti-collusion, including acknowledgement of the following:
Arkansas state policy on Anti-Collusion [FN1]:
Applicants will use CBGs as the basic geographic unit to define their project areas. Bids may include one or more CBGs but may not bisect or only partially cover any CBG. Additional information about the definition of project areas is covered in Section 2.4.6 of this document. The Applicant Primer, provided during the early communication stage, will prepare applicants for the use of CBGs as basic units, including publishing a list of reference subsidies for each CBG. Bids will be solicited over two tranches. Both priority (fiber) and non-priority (non-fiber) projects will be accepted in both tranches. Proposed fiber projects will be prioritized in alignment with the BEAD NOFO's requirement to prioritize fiber service wherever possible, and non-fiber projects will be considered in the scenarios detailed under Expansion below.
The first tranche of bids will be analyzed to identify:
• Bids without competition that meet a minimum point threshold
• Bids in competitive project areas with sufficiently high scores to qualify as “Buy It Now” bids
• Competitive project areas requiring adjudication
• Zero-bid areas requiring additional solicitation
The minimum point threshold will be based on an absolute minimum score (for example, a specific percentage or more of available points). Bids without competition [FN2] that are above this threshold will be provisionally granted and their covered project areas will not be carried into the second tranche of bidding. Applicants with bids without competition above the minimum point threshold will be notified of their bids being awarded, subject to final determination of the state's subsidy liability and a final, discretionary review of applicants' total set of awards for feasibility. The minimum point threshold will be announced in the Applicant Primer, following approval of Initial Proposal Volume II.
Buy It Now Bids will be defined as competitive bids that score a set number of points above the next-highest scoring bid of the same or higher technology class (fiber or non-fiber). Buy It Now bids must also submit subsidy requests that are below the reference subsidy for their covered CBGs. However, a non-priority bid significantly higher than the next-highest priority bid would not be considered a Buy It Now bid. Buy It Now bids will be provisionally awarded and their covered project areas will not be carried into the second tranche of bidding. Applicants with Buy It Now bids will be notified of their bids being awarded subject to final determination of the State's subsidy liability and a final, discretionary review of applicants' total set of awards for feasibility. The Buy It Now relative point thresholds will be announced in the Applicant Primer, following approval of Initial Proposal Volume II.
Both competitive project areas and zero-bid areas will be eligible for tranche 2 bids, however the two types of areas will be treated differently.
Competitive project areas will include the entire area of all bids that have any overlap, regardless of whether all or only part of the bids overlap. Applicants who submit tranche-1 bids in competitive areas will be allowed to submit modified bids for tranche 2. Modifications will only be allowed to the requested subsidy and the scope of CBGs included in the bid. Specifically, applicants will only be allowed to decrease their requested per-location subsidy for CBGs in the tranche-1 bid and to increase the number of CBGs in their bids. For newly added CBGs, applicants will not be held to the tranche-1 per-location subsidy. This will allow bidders to formulate more competitive bids in an accelerated timeline between tranche 1 and tranche 2.
Zero-bid areas will include areas that received no bids, as well as areas where the sole bid fell below the minimum point threshold. Applicants will also be allowed to add zero-bid areas to competitive bids for additional points. ARConnect will also consider increasing the reference subsidy available for zero-bid areas to encourage bidding for these areas. These two mechanisms are aimed at reducing the number of zero-bid areas remaining after tranche-2 bids are received.
ARConnect will follow all Arkansas' state policies and guidelines for document retention and subgrantee selection throughout the determination process. While bids will be kept confidential during bidding to preserve the competitiveness of the awards process, all deconflicting decisions and relevant inputs will be retained and made available for public review following the announcement of final awards.
Deconflicting of overlapping bids in both tranche 1 and tranche 2 will follow a standard scoring rubric, as described in Section 5.4.1 of this document. However, tranche-1 scoring will only be used to identify best-offer bids and to ensure that bids without competition are above the minimum point threshold. Tranche-2 scoring will be completed to deconflict all remaining overlapping priority bids and determine the preliminary award winner, pending application of the EHCPLT, ARConnect review of the final set of awards for each applicant, and NTIA approval of ARConnect's Final Proposal.
Losers of this adjudication who submitted bids above the minimum point threshold may in some cases still be eligible for parts of their proposed project areas that did not overlap with any other bids. If this is the case, they will be invited to accept prorated subsidies for these non-competitive areas. If applicants determine that their reduced project area requires a different subsidy level, they will be allowed to propose a new total project cost and requested subsidy. They will also be permitted to propose modified project areas (for example, designating specific CBGs that they will still support). However, if applicants modify their bids, ARConnect reserves the right to solicit additional bids for the CBGs in question. Any project areas abandoned by applicants and with no other eligible bids will be treated as zero-bid CBGs.
While ARConnect firmly believes that BEAD funding will be sufficient to provide fiber or alternate broadband service to all eligible locations, it has prepared for the possibility that some CBGs may not receive reasonable bids in the two tranches of open bidding. ARConnect will guarantee 100% coverage through three primary activities:
• Calculation and Application of the EHCPLT to ensure BEAD funds are sufficient to deploy broadband to all unserved and underserved locations and that all per-location subsidy amounts are reasonable
• Proactive solicitation of bids for zero-bid CBGs and CBGs abandoned by applicants following adjudication
• Low-Earth Orbit Satellite Internet Service for locations where it is determined that no priority or non-priority deployment is feasible
Details on the Calculation and Application of the EHCPLT are provided in Sections 5.9.1 and 5.9.2. ARConnect will calculate the EHCPLT after all tranche-1 and tranche-2 bids have been received and adjudicated, based on the anticipated total BEAD subsidy required to reach 100% coverage and based on any per-location subsidy costs that are unreasonably high, per the discretion of ARConnect. Following submission of all tranche-2 bids, ARConnect will identify preliminary award recipients that meet any one the following conditions:
Once these preliminary award recipients are identified, the total BEAD subsidy required to reach 100% coverage will be estimated using three inputs:
If needed, the EHCPLT will then be defined as the threshold that ensures that this estimated subsidy is less than the available BEAD funding. At this point, ARConnect's selection process will no longer rely on the rubric, but will instead analyze all available bids, both below and above the EHCPLT, to identify a set of awards that will maximize the number of eligible unserved and underserved locations receiving reliable broadband internet within the allocated BEAD funding. This process will follow an optimization algorithm that will weigh unserved locations higher than underserved locations.
Proactive solicitation of applications for zero-bid CBGs will involve introduction of new incentives, primarily through increasing the reference subsidy, direct outreach to nearby applicants, and, if needed, direct discussion of required subsidy levels to make projects financially viable. As zero-bid and abandoned CBGs are identified, the state will announce their status. Applicants with bids in competitive areas will then be permitted to add the zero-bid areas to their bids in order to receive additional points. Additionally, ARConnect will consider increasing the reference subsidy for any zero-bid CBGs, if it is determined that the long-term economics of the CBG do not support build-out of broadband at the initial reference subsidy. The state will also reach out to encourage additional bids by any applicants submitting bids to areas adjacent to zero-bid areas as well as any applicants with known infrastructure in zero-bid CBGs or adjacent CBGs. If needed, the state will directly engage with service providers to negotiate the subsidy needed to provide coverage.
Low-Earth Orbit Satellite Internet Service will only be considered for CBGs where no priority or non-priority bids solicited are above the minimum point threshold, as a final measure to ensure internet is deployed to 100% of eligible unserved or underserved locations and CAIs.
Once 100% coverage has been reached, ARConnect will make the determination of provisional awards, subject to NTIA signing off on the Final Proposal. As a final step in determining award winners, ARConnect will review the total awards to each applicant in the context of the prequalification information received. This review will be done at the discretion of ARConnect to ensure that applicants have the means to successfully deploy all contracted projects within the proposed timelines. Should it be determined that an applicant is eligible for awards that may be beyond what is reasonable for their existing capabilities, ARConnect will engage with the provisional award winner to discuss options. If no viable option can be agreed on, ARConnect will consider alternate overlapping bids or satellite internet service for portions of the applicant's awards.
The fairness of the award process relies on there being no collusion between potential recipients, no bias from the State or in the award criteria, no conflicts of interest in the selection process, and no arbitrary decisions. ARConnect will put the following considerations and guidelines in place to safeguard the fairness of the selection process:
2. Applicants will certify their commitment to abide by non-disclosure rules modeled on the FCC's prohibited communications rules for auctions. This includes prohibition against applicants making general public comments, such as declaring their intention to participate in bidding for BEAD funding, as well as specific comments, such as an applicant's proposed project areas and desired subsidy.
5. ARConnect has designed the subgrantee selection process to prevent systematic bias and to reduce opportunities for arbitrary or subjective decisions. Specifically, the criteria and bidding process is designed to be comprehensive and provide guidance on closely competitive bids, with a clear process defined from beginning to end. Criteria are designed to be fair and neutral and to be determined using measurable and objective metrics.
6. Finally, the subgrantee selection process will follow all relevant state policies to avoid the creation of conflicts of interests. ARConnect reserves the right to take any appropriate action based on the disclosure of potential conflicts of interest, such as disqualification of an applicant for a specific project area or designation of an applicant as ineligible to receive any BEAD funding. Specifically, applicants intending to bid for more than $25,000 in awards will be required to make disclosures required by Arkansas Executive Order 98-04, [FN3] as described below.
Disclosure required by Arkansas Executive Order 98-04: Any contract or amendment to a contract executed by an agency which exceeds $25,000 shall require the vendor to disclose information as required under the terms of Executive Order 98-04 and the regulations pursuant thereto. The vendor shall also require the subcontractor to disclose the same information. The Contract and Grant Disclosure and Certification Form shall be used for this purpose. Contracts with another government entity such as a state agency, public education institution, federal government entity, or body of a local government are exempt from disclosure requirements. The failure of any person or entity to disclose as required under any term of Executive Order 98-04, or the violation of any rule, regulation, or policy promulgated by the Department of Finance and Administration pursuant to this order, shall be considered a material breach of the terms of the contract, lease, purchase agreement, or grant and shall subject the party failing to disclose, or in violation, to all legal remedies available to the agency under the provisions of existing law.
ARConnect remains dedicated to ensuring the subgrantee selection is open to the widest breadth and variety of potential applicants. To this end, ARConnect will put the following considerations and guidelines in place to safeguard the fairness of the selection process:
The subgrantee selection process has been designed to maintain a fair playing field and solicit a competitive set of applications. ARConnect has introduced several measures toward this end, including:
4. Requiring all applicants to certify their commitment to abide by non-disclosure rules modeled on the FCC's prohibited communications rules for auctions. This includes prohibition against applicants making general public comments, such as declaring their intention to participate in bidding for BEAD funding, as well as specific comments, such as an applicant's proposed project areas and desired subsidy.
ARConnect understands the subgrantee accountability procedures required by BEAD and is committed to following them to ensure a responsible use of BEAD funds. Per the BEAD NOFO and guidelines, funds will be provided to subgrantees on a reimbursable basis once subgrantees have submitted required evidence of deployment activity. Subgrantees' progress on deployment activities will be monitored through periodic site visits by ARConnect or its contractors.
ARConnect will require timely subgrantee reporting which includes the following, as required by the BEAD NOFO:
• Labor and material costs reporting for reimbursement. [FN4]
• Quarterly progress reports including construction updates, any changes to subcontractor statuses, certification of adherence to required operational practices, location details (e.g., locations to be served, classification of locations, any new locations), and service speeds.
• Annual financial and managerial reports, including financial statements and narrative description of deployment and workforce development activities.
Finally, awarded contracts will include claw-back provisions that will go into effect in case of events including but not limited to the following:
• Subgrantees are delayed without cause or cease to provide services per grant provisions beyond their committed deployment timeline. [FN5]
• ARConnect identifies any incorrect documentation, such as overbilling of labor or material costs.
• ARConnect identifies any material breaches of contract such as failure to deliver contracted workforce development activities.
• ARConnect identifies serious violations of other provisions, such as environmental protections, safe workplace practices, or fair labor practices.
Primary criteria | Maximum points available | Determination process |
|---|---|---|
1.1. Minimization of BEAD program outlay | 40 | The score will be assessed based on how high or low an applicant's requested subsidy is relative to ARConnect's reference subsidy for the CBGs within the applicant's project area. Reference subsidies will be calculated on a per-location basis for each CBG and will be based on commonly accepted industry models. Reference subsidies will be announced publicly prior to the bidding process. Scores will be based on a linear scale, with zero points being granted for bids that are 100% higher than the reference subsidy and 40 points being granted for bids that request no BEAD subsidy. For example, an applicant who applies for a project with a per-location BEAD subsidy match that is exactly the same amount as the reference subsidy would receive 20 points, while an applicant who applies for a subsidy worth 120% of the per-location reference subsidy would receive 16 points. |
1.2. Affordability | 25 | Applicants will commit to a baseline price for the highest tier of service that they support, as disclosed in their deployment bid. The score will be assessed based on how high or low their commitments are relative to the below reference prices for five tiers of service 16: |
1/1 Gbps: $85 per month | ||
500/300 Mbps: $70 per month | ||
400/200 Mbps: $60 per month | ||
300/100 Mbps: $50 per month | ||
200/50 Mbps: $40 per month | ||
If an applicant plans to support a plan between two of the tiers, their price will be assessed against a linear interpolation of the download speed between the two nearest reference prices. For example, if an applicant plans to support a 750/500 Mbps plan, their price would be assessed against a reference price of $77.50 per month. | ||
Scores will be based on a linear scale, with applicants committing to plans that are, on average, 50% higher than the reference price receiving zero points and applicants committing to plans 50% lower than the reference price receiving 25 points. | ||
For example, an applicant that commits to plans exactly at the recommended reference price would receive 12.5 points, while an applicant who commits to plans priced at 120% of the reference price would receive 10 points. | ||
1.3. Fair labor practices | 10 | Applicants will receive 10 points for demonstrated compliance with federal labor laws over the last three years, as described in Section 8 of this document. |
Applicants without three years of operational experience can receive 10 points by signing a certification of future compliance. |
16 The price for a 1 Gbps plan is guided by applying 2% of household income to internet service, based on U.S. Census Bureau data on Arkansas median income; the step-down of prices for lower-tier service follows prevailing relative prices in Little Rock, as of September 2023.
Secondary criteria | Maximum points available | Determination process |
|---|---|---|
2.1. Speed to deployment | 3 | Applicants will provide their planned deployment timeline as part of their bid. Timelines should span no more than 48 months from the date of the applicant receiving notice of their final award. Any timeline that is shorter than 24 months will receive 3 additional points on the scoring rubric. Applicants will certify their planned deployment timeline and acknowledge potential financial penalties if their projects extend beyond planned timeline without a formal extension having been submitted to and approved by ARConnect. |
2.2. Speed, latency, and other technical capabilities | 2 | Applicants will provide technical specifications for all planned technologies. Any bid to deploy XGS-PON fiber technology will receive the full 2 points. Bids to deploy non-XGS-PON fiber will receive 1.5 points. Bids to deploy non-fiber technology will receive points as follows: |
1000/500 Mbps: 1 point | ||
400/200 Mbps: 0.5 points | ||
Technology with more than 100 milliseconds of latency will be awarded zero points. | ||
Applications must also include a reasonable explanation of how they will add incremental capacity as new customers are added. ARConnect retains the right to review and request modifications to these plans prior to awarding points for this criterion. |
Additional criteria | Maximum points available | Determination process | |
|---|---|---|---|
3.1. Workforce support | 5 | 5 points will be granted to applicants that provide plans to commit to additional workforce support, as described in Section 9, during their prequalification application. An optional question regarding workforce support plans will be included in the prequalification application; responses should describe the set of measures that applicants will take to foster and recruit a qualified workforce for their projects. ARConnect reserves the right to review workforce support plans for feasibility and send comments back to applicants for revisions, should the workforce support plans prove insufficient. | |
Applicants can receive points for any combination of the below measures, which together present a comprehensive plan for meeting their workforce needs: | |||
• Collaboration with apprenticeship programs offering support services such as project management resources, computing services, and back-end administration | |||
• Commitment to hiring a local workforce, with particular focus on rural and high-poverty areas | |||
• Financial support from sub-grantee for statewide centers providing wraparound services, including childcare, transportation, and mentorship for employees on BEAD-related projects | |||
• Provision of training programs for software, radio frequency, and field engineers through scholarships and student stipends at community colleges | |||
• Implementation of in-house training and certification programs covering areas such as fiber optics, cybersecurity, and other telecommunications and broadband digital skills | |||
• Facilitation of guaranteed letters of commitment with state technical colleges, demonstrating good-faith efforts through letters of intent to hire Arkansan graduates. | |||
• Proposals to identity new sources of workforce, such as recent graduates and ex-convict populations. | |||
3.2 Scale of geographic coverage | 5 | Applicants will score additional points, up to a maximum of 5 points, for proposing project areas that cover a larger number of locations (BSLs and CAIs) within a given county. Applicants will indicate which counties are included in their bids. ARConnect will identify the county with the largest number of locations served by the applicant's bid or identify any county within a bid where 100% of eligible locations are served by the bid. Any applicant serving 100% of locations within any county in their bid will receive 5 points. Any applicants serving less than 100% of locations in their covered counties will be awarded points as follows: | |
Points available for the number of locations served by the proposed bid 17 | |||
No. of locations within a county with the most coverage | Points | ||
3,000 | 5 | ||
2,000 | 4 | ||
1,500 | 3 | ||
1,000 | 2 | ||
500 | 1 | ||
3.3. Inclusion of zero-bid CBGs | 5 | Applicants will receive points based on the number of zero-bid CBGs they include in their tranche 2 bid. Each zero-bid CBG will be worth one-half point. | |
3.4. Local coordination | 2.5 | Applicants are encouraged to solicit letters of support from a list of local government officials. Eligible local government officials could include the following individuals: | |
• State: State Representative; State Senator | |||
• County: County Judge; Justice of the Peace | |||
• Municipality: Mayor; Member of City Council | |||
• School District: Member of the School Board | |||
Applicants will receive an additional half point, up to a maximum of 2.5 points, for each letter of support filed. The list of local government officials will be published by ARConnect following approval of this Initial Proposal by NTIA. | |||
Local government officials are permitted to write letters of support for one or more applicants but may only write one letter of support per applicant. | |||
3.5. Weather-resilient broadband infrastructure | 2.5 | Applicants will receive up to 2.5 points for deployment plans that include recommended weather resiliency measures, including 1 point for achieving 85% or higher as share of fiber that is buried (vs aerial), 1 point for a weather mitigation plan (including network redundancy planning), and 0.5 points for committing to attend municipality emergency management meetings on an ongoing basis to coordinate timely restoration of service in the case of outages. See Section 2.11.1 for additional information on weather resiliency. | |
17 The rubric of points for the number of locations is based on BEAD-eligible locations in Arkansas counties and may change subject to changes in eligibility according to NTIA guidelines and the ARConnect challenge process.
Scoring will take place following the close of tranche 1 as well as the close of tranche 2. As described in Section 5.1, tranche-1 and tranche-2 bids will follow the same scoring criteria, with the exception of criterion 3.3 (inclusion of zero-bid areas), which is only applicable to tranche-2 bids. The scoring criteria are designed to allow comparison of bids with dissimilar project areas as well as different technologies.
Tranche-1 and tranche-2 bids will follow the same scoring criteria, as described above.
In tranche 1, bids will be scored to identify Buy It Now bids and bids without competition that do not meet the minimum point threshold. Buy It Now bids are competitive bids that score significantly higher than the next-highest bid and also request less than the reference subsidy for their covered CBGs. The relative point threshold for Buy It Now bids will be announced in the Applicant Primer.
The minimum point threshold will be applied to bids without competition. If a CBG does not receive any bids above the minimum point threshold, it will be treated as a zero-bid area for tranche-2 scoring. The minimum point threshold will be announced in the Applicant Primer.
Following receipt of all tranche-2 bids, the rubric will be used to identify preliminary winners between overlapping bids. Priority bids will only be compared to other priority bids. Overlapping non-priority bids will only be deconflicted using the scoring rubric in cases where they do not overlap with any priority bids. The results of this determination will be used as input to calculate the EHCPLT.
Based on preliminary cost modeling, ARConnect believes that the State's allocated BEAD funding will be sufficient to deploy reliable broadband infrastructure to all unserved and underserved locations as well as eligible CAIs, including high levels of priority infrastructure deployment. ARConnect's subgrantee selection plan includes two measures to ensure there is sufficient funding to ensure coverage to all unserved and underserved locations.
First, use of the EHCPLT will allow ARConnect to maximize coverage within budget among bids received in tranches 1 and 2. The EHCPLT will be calculated to ensure there are sufficient funds left to support coverage of qualified service to all unserved and underserved locations included within any remaining no-bid areas.
Second, if there are CBGs that do not receive bids in tranches 1 and 2, ARConnect will consider using low-Earth-orbit satellites to provide coverage. When considering which locations to serve with low-Earth-orbit satellites, ARConnect will first subsidize coverage for unserved locations, followed by underserved locations, and finally any CAIs. The process of applying the EHCPLT and determining locations for satellite coverage is further explained in Sections 5.9.1 and 5.9.2.
Per BEAD guidelines, to ensure the maximum amount of US taxpayer dollars are spent procuring supplies from US businesses:
• Production of all iron, steel, manufactured products (such as fiber-optic communications material), and construction materials used in deployment or non-deployment activities should be United States based (e.g., produced in America), unless a waiver is granted.
• Produced in America products are defined as products that are manufactured in the United States, where the cost of all product components that are mined, produced, or manufactured in the United States is greater than 55% of the total cost of the product's components, as per Section 70912 of BABA (unless another standard exists for determining whether the product has been established according to applicable laws or regulations).
• It is explicitly prohibited to use BEAD funding to purchase any covered communication equipment or services, as per the Secure and Trusted Communications Networks Act of 2019 (46 U.S.C. § 1608) and as published by the FCC. [FN6]
• IIJA specifically prohibits the use of BEAD funding to purchase or support fiber-optic cable and optical transmission equipment that is manufactured in the People's Republic of China, unless the subgrantee receives a waiver from the Assistant Secretary of Commerce for Communications and Information.
As part of the prequalification application, applicants will provide detailed plans outlining their approach to remaining compliant with BABA requirements and certifying their understanding of and commitment to BABA requirements.
An applicant will only be permitted to bid for deployment funding once ARConnect has determined that the applicant has:
• Certified that it will secure all necessary federal, state, and local government permits and approvals required for the proposed work and a timeline of all project areas for which the applicant is the final award recipient;
• Certified that it will design and deploy all projects in such a way as to minimize the potential of adverse environmental impact; and
• Certified that it adhere to any agreed-upon resolutions to mitigate the effects of proposed projects on historic properties, should a National Historic Preservation Act (NHPA) Section 106 review be triggered by their proposed project. [FN7]
Any applicant that does not provide compliant project plans and/or does not certify their enforceable commitment to these and all other BABA and EHP requirements in their prequalification application will be barred from submitting bids until and unless they amend their application.
As a part of ongoing subgrantee monitoring, ARConnect will monitor compliance with these requirements. Any award recipient with a documented violation of BABA or EHP requirements will be considered for penalties or, in extreme cases, partial or comprehensive termination of ongoing awards.
ISPs will define their desired project area using CBGs as the basic geographic unit. This means that if an applicant is bidding to provide broadband to any locations within a CBG, its bid must account for supporting service to all other BEAD-eligible locations within that same CBG. Bids may include multiple CBGs or a single CBG but may not bisect any CBG.
A data pack to support applicants as they consider CBGs for their bids will be included in the Applicant Primer. The data pack will include information on unserved and underserved locations and eligible CAIs, the reference subsidy for each CBG, any relevant weather risks, and a list of eligible local government and community organizations with which subgrantees are encouraged to interface.
Tranche-1 bids will be composed of any collection of contiguous CBGs. Following the resolution of scoring of tranche-1 bids, ARConnect will announce areas eligible for tranche-2 bids. Tranche-2 bids will take two forms:
Applicants can only modify their tranche-1 bids by reducing the requested per-location subsidy and adding additional CBGs. Additional zero-bid CBGs added to tranche-1 bids in tranche 2 do not need to be contiguous.
Bids with overlapping project areas will be deconflicted using the scoring rubric, which has been designed to allow like-for-like comparison of bids with disparate project areas.
If there are CBGs with no bids following the close of tranche 2, ARConnect will directly engage with all nearby providers currently offering at least qualified broadband service in the area, any applicant that has placed bids adjacent to the zero-bid CBGs, as well as service providers who received past funding for areas adjacent to the zero-bid CBGs. Additional potential service providers will be identified using the FCC's National Broadband Map and data from prior funding rounds administered by ARConnect.
If there are remaining zero-bid areas following direct solicitation, ARConnect will engage with providers of low-Earth-orbit satellite internet service that are able to support at least 100/20 Mbps service to secure access for remaining unserved locations.
ARConnect will calculate the EHCPLT after all tranche-1 and tranche-2 bids have been received and scored. ARConnect will not rely on its own capital-expenditure or operating-expenditure cost models to calculate the EHCPLT. Rather, the EHCPLT will only be applied as a guardrail to ensure that funding is available to support deployment to 100% of eligible locations.
ARConnect will use three inputs to calculate its potential subsidy requirement:
These inputs will support ARConnect in setting the EHCPLT at a level that guarantees 100% coverage with its available BEAD funding.
Should it be determined that Arkansas requires an EHCPLT to reach 100% coverage, as described in Section 5.9.1, ARConnect will no longer rely on the scoring rubric to select award winners for remaining areas.
It is important to note that priority and non-priority bids from tranches 1 and 2 already identified as eligible for awards and below the EHCPLT will not be affected by the process described below.
All other bids will be analyzed to identify the set of awards that cover the largest number of unserved and underserved locations while not exceeding the available BEAD funding. This process will follow an optimization algorithm that will weigh unserved locations higher than underserved locations.
Finally, ARConnect may also consider deploying a less costly technology that may not meet BEAD requirements for reliable broadband service (while otherwise satisfying the program's technical requirements), because no technology meeting the reliable broadband service requirements can be deployed for less than the EHCPLT at a given location. Specifically, low-Earth-orbit satellite internet service will be considered for CBGs where no priority or non-priority bids solicited are below the EHCPLT. This will only be done as a final measure to ensure internet is deployed to 100% of eligible unserved or underserved locations, as per BEAD requirements.
ARConnect will establish the eligibility of subgrantees through a prequalification application, submitted by all applicants prior to bidding. No applicant with an outstanding or insufficient prequalification application will be allowed to participate in bidding or receive BEAD funding. The information requested in Sections 5.10.1 through 5.10.7 will primarily be solicited as part of this prequalification application. Additionally, applicants will be required to submit the following information:
• Anti-collusion and anti-conflict-of-interest certifications.
• BABA and EHP plans and certifications.
• Workforce plans and certifications.
• Low-cost plan certification.
• Weather resiliency plans and certifications.
Applications that do not meet the minimum qualifications or financial capabilities, as outlined on pages 72-73 of the BEAD Notice of Funding Opportunity (NOFO) and described below in items A through D, will not be eligible for BEAD funding through ARConnect.
As part of the application process for ARConnect, applicants must certify that they can fulfill the obligations associated with each project on which they intend to bid, that they have sufficient funds to cover all project costs beyond the grant amount, and that they will comply with all program requirements, including service milestones. Additionally, since ARConnect will disburse funding upon completion of associated tasks, applicants must certify that they have and will continue to have enough financial resources to cover eligible project costs until ARConnect authorizes additional disbursements.
Applicants are required to submit a letter from an eligible bank (see the Code of Federal Regulations Title 47 § 54.804(c)(2)), in which the bank commits to issuing an irrevocable standby letter of credit to the prospective subgrantee. The letter must include the dollar amount of the letter of credit and the issuing bank's agreement to adhere to ARConnect's model letter of credit terms and conditions. Before executing any subgrantee agreements, all prospective subgrantees must obtain an irrevocable standby letter of credit that ARConnect deems acceptable and that amounts to no less than 25% of the subaward amount. An opinion letter from the subgrantee's legal counsel must be included with the letter of credit, stating that in a proceeding under Title 11 of the United States Code (the Bankruptcy Code), the bankruptcy court would not treat the letter of credit or proceeds of the letter of credit as property of the winning subgrantee's bankruptcy estate under Section 541 of the Bankruptcy Code, subject only to customary assumptions, limitations, and qualifications. Applicants will be asked to submit updated letters of credit as part of regular reporting of demonstrated milestones. Letters of credit may be revised throughout the process to twenty-five (25) percent of the remaining subaward amount, as milestones are accomplished and grant payments are remitted.
The letter of credit requirement described in section 5.10.1.B. above shall be waived to the extent to and as described below:
That portion of the letter of credit requirement that requires the use of a bank that meets the eligibility requirements of 47 C.F.R. § 54.804(c)(2) is waived where the subgrantee otherwise meets the letter of credit using any United States credit union that
The letter of credit requirement is waived where:
a. Applicants are required to submit a letter from a company holding a certificate of authority as an acceptable surety on federal bonds as identified in the Department of Treasury Circular 570 committing to issue a performance bond to the applicant. The letter shall at a minimum provide the dollar amount of the performance bond.
Where a subgrantee chooses to exercise the option to obtain a performance bond under this waiver, the requirement that the subgrantee provide with its letter of credit an opinion letter as described in section 5.10.1.B. above is waived.
The requirement that in no event the letter of credit have a value of less than twenty-five (25) percent of the subaward is waived, conditioned upon the requirement that the subgrantee obtain a new letter of credit in a reduced amount upon achievement of specific deployment milestones.
Where a subgrantee chooses to utilize a performance bond in lieu of a letter of credit, the performance bond may be reduced by a commensurate amount as the subgrantee meets the same deployment milestones.
The requirement that the initial letter of credit be for twenty-five (25) percent of the subaward amount, or in the case where a subgrantee chooses to utilize a performance bond valued at no less than one hundred (100) percent of the subaward amount, is waived where:
c. The subgrantee commits to maintain a letter of credit or performance bond in the amount of ten (10) percent of the subaward until it has demonstrated to the satisfaction of ARConnect that it has completed the buildout of one hundred (100) percent of locations to be served by the project or until the period of performance of the subaward has ended, whichever occurs first.
Should NTIA authorize alternative forms of financial guarantees to satisfy this requirement, ARConnect will consider revising its prequalification rules to match the latest guidance.
Applicants are required to provide financial statements from the previous fiscal year that have been audited by an independent certified public accountant. If the applicant has not been audited as part of its regular business operations, it may submit unaudited financial statements from the previous fiscal year instead, but must also certify that it will provide audited financial statements from the same period. It is important to note that ARConnect will only approve grants for network facility deployment or upgrades if the submitted documents demonstrate the applicant's financial capabilities for the proposed project.
To be considered by ARConnect for BEAD funding, applicants must submit business plans and related analyses that demonstrate the sustainability of their proposed project. This can be in the form of pro forma statements or analyses, which should include cash-flow, operating cost, and balance-sheet projections for at least three years following the targeted completion of the project.
Applications that do not meet the minimum qualifications for managerial capabilities, as outlined on pages 73--74 of the BEAD NOFO and described below in items A and B, will not be eligible for BEAD funding through ARConnect.
To apply for BEAD funding through ARConnect, applicants must provide resumes for all key management personnel. At a minimum, this should include resumes for all C-suite officers and at least one senior leader who will be accountable for the success of the BEAD-funded deployment in Arkansas.
To apply for BEAD funding through ARConnect, applicants must submit organizational charts and a narrative explanation of their managerial capabilities as they relate to BEAD-related broadband deployment in Arkansas. This narrative should include, at a minimum, the experience and qualifications of key management personnel who will be responsible for the project, the subgrantee's experience with projects of similar size and scope, any recent or upcoming organizational changes such as mergers or acquisitions, and any relevant organizational policies.
Applications that do not meet the minimum qualifications for technical capabilities, as outlined on page 74 of the BEAD NOFO and described below in items A and B, will not be eligible for BEAD funding through ARConnect.
Prospective applicants must provide ARConnect with a certification confirming their technical expertise in executing and overseeing deployment projects, as well as their ability to proficiently conduct the funded activities, including the use of a well-qualified and credentialed workforce, in accordance with the guidelines specified in Section IV.C.1.e of the BEAD NOFO. The certification to be submitted by applicants must include, but is not limited to, the following:
Prospective applicants must demonstrate their capacity to execute the funded activities competently with a suitably skilled and credentialed workforce, in accordance with the specifications detailed in Section IV.C.1.e of the BEAD NOFO. The documentation to be provided by prospective applicants must include, but is not limited to, the following:
1. A comprehensive project plan description that explicitly outlines the various stages of the capital investment schedule, encompassing planning, design, implementation, and operation. The project plan should include details such as network design, diagrams, projected costs, four-year timelines, and evidence of adherence to the stipulated timeline as mandated by the BEAD NOFO Section C.2.b.i.
Applications that do not meet the minimum qualifications for legal and regulatory capabilities, as outlined on page 74 of the BEAD NOFO and described below, will not be eligible for BEAD funding through ARConnect.
Applicants are required to provide a comprehensive history detailing compliance with all pertinent federal, state, and local laws for previous broadband projects funded by federal and state programs.
Applications that do not meet the minimum qualifications for operational capabilities, as outlined on pages 74--75 of the BEAD NOFO and described below in items A through E, will not be eligible for BEAD funding through ARConnect.
Applicants are required to provide the following operational details:
An applicant must provide certification that it has offered voice, broadband, and/or electric transmission or distribution services for a continuous period of at least two years before the date of application submission, or that it is a wholly owned subsidiary of such an entity. The certification should specify the number of years that the applicant or its parent company has been in operation.
An applicant that has offered voice and/or broadband services must certify its timely submission of FCC Form 477s and, if applicable, a Broadband Deployment Accuracy and Technological Availability Act submission, as required during this period, in compliance with the FCC's rules and regulations. Alternatively, if there is a pending or completed enforcement action, civil litigation, or any other matter related to non-compliance or alleged non-compliance with page 75 of the BEAD NOFO, the prospective applicant should provide an explanation.
If an applicant has exclusively operated an electric transmission or distribution service, it is required to submit qualified operating or financial reports that have been filed with the relevant financial institution during the specified time period. Additionally, a certification confirming the accuracy and authenticity of these submissions in comparison to the reports provided to the relevant financial institution must be included.
If the applicant is a new entrant to the broadband market, it is required to present sufficient evidence demonstrating that the newly established entity has acquired adequate operational capabilities, either through internal development or external resources. Such evidence may encompass resumes of key personnel, project descriptions, and narratives from contractors, subcontractors, or other collaborative partners with relevant operational experience, or equivalent documentation.
Applications that do not meet the minimum qualifications for disclosure of ownership, as outlined on page 75 of the BEAD NOFO and described below, will not be eligible for BEAD funding through ARConnect.
In accordance with the Code of Federal Regulations Title 47 Section 1.2112(a)(1)-(7), applicants are required to:
6. List all parties holding indirect ownership interests in the prospective applicant, as determined through the cumulative multiplication of ownership percentages across vertical ownership chains. These parties should represent 10% or more of the prospective applicant, with exceptions made for ownership exceeding 50% or indicating actual control, which should be treated as 100% interest.
7. Identify any FCC-regulated entity or prospective applicant for an FCC license in which the prospective applicant or any parties mentioned in paragraphs (a)(1) through (a)(5) have a 10% or greater ownership stake, whether voting or non-voting, common or preferred. This listing should include a description of each entity's principal business and its relationship to the prospective subgrantee (for example, Company A owns 10% of Company B, the prospective subgrantee, and 10% of Company C, an FCC licensee or license prospective subgrantee).
ii. Catalog any FCC-regulated entity or prospective applicant for an FCC license in which any controlling interest of the prospective applicant owns 10% or more of any class of stock, warrants, options, or debt securities, along with a description of each entity's principal business and its relationship to the prospective subgrantee.
ii. Document any FCC-regulated entity or prospective subgrantee for an FCC license in which any controlling interest of the prospective subgrantee possesses a 10% or greater stake in any class of stock, warrants, options, or debt securities, including a description of each entity's principal business and its relationship to the prospective subgrantee.
iii. Summarize all agreements or instruments that substantiate the prospective subgrantee's eligibility as a small business under designated entity provisions. This should encompass articles of incorporation, partnership agreements, shareholder agreements, trust agreements, management agreements, franchise agreements, spectrum leasing arrangements, and any other pertinent agreements -- oral or written.
Applications that do not meet the minimum disclosures of other sources of public funding, as outlined on pages 75--76 of the BEAD NOFO and described below in items A and B, will not be eligible for BEAD funding through ARConnect.
Applicants are required to disclose the following:
Applicants are required to provide the following operational details for each broadband deployment project:
Credits
Adopted emergency effective Jan. 1, 2024.
State of Arkansas (2020); Arkansas Procurement Law § 19-11-240. See here.
Bids without competition are defined as bids with project areas that do not overlap with the project areas of any bids from other applicants.
State of Arkansas Department of Finance and Administration (2005). Rule implementing governor's Executive Order 98-04, Act 34 of 1999 and Act 2262 of 2005. https://www.dfa.arkansas.gov/images/uploads/internalAuditOffice/EO98-04Rules.pdf.
Note that ARConnect may consider revisions to grant format and terms should NTIA release updated uniform guidance.
ARConnect (2020). ARC Broadband Grant Program Main Rules Section 8.5.C. https://broadband.arkansas.gov/wp-content/uploads/2020/04/Arkansas-Rural-Connect-Rule-_-Clean.pdf.
FCC (2022). List of Equipment and Services Covered By Section 2 of The Secure Networks Act. https://www.fcc.gov/supplychain/coveredlist.
Advisory Council on Historic Preservation (2023). An Introduction to Section 106. https://www.achp.gov/protecting-historic-properties/section-106-process/introduction-section-106.
Current with amendments received through February 15, 2024. Some sections may be more current, see credit for details.
Ark. Admin. Code 003.19.16-5, AR ADC 003.19.16-5
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