Infrastructure Investment and Jobs Act brings opportunity for ANCs and their partners

The $1.2 trillion Infrastructure Investment and Jobs Act (The Act) presents great opportunities for Alaska Native corporations (ANCs) to participate in broadband and other infrastructure projects. The Act includes additional funding for the Tribal Broadband Connectivity Program, the Enabling Middle Mile Broadband Infrastructure Program, and the newly created Digital Equity Capacity Grant Program, which provides grants to facilitate access to and adoption of broadband.

However, to tap into these new grants, ANCs may find it necessary to collaborate with other companies. This is typically because ANCs must obtain access to technical knowledge and capabilities or to tap into financial resources for capital intensive projects. When entering into these relationships, ANCs and the entities that they are working with should create a good foundation for success by recognizing the risks that may arise and proactively addressing them.

ANCs: Preparing to capitalize on the Infrastructure Act

The first step in evaluating whether to collaborate with someone for a grant opportunity is to conduct thorough due diligence. This helps ANCs determine if a potential business associate has the capability to do what they claim they will do and, hopefully, uncover any prior issues that suggest the potential for disputes in the future. While past performance is no guarantee of future success, a history of disputes or claims can, unfortunately, indicate a risky collaboration.

Due diligence should include a thorough review of public records regarding the potential business associate. This should include simple internet searches for news articles, reviewing the company’s SAM.gov profile, and examining the federal government’s list of debarred companies to ensure that neither the company nor its affiliates are on that list.

In the case of those entities or persons who will be providing financial or other material assistance, it may be appropriate to review financial statements or information to ensure that they can deliver what they promise. While a successful collaboration requires trust, taking a “trust but verify” approach gives ANCs the greatest likelihood of success.

ANCs should also negotiate and execute a detailed agreement that ensures the parties’ expectations for the project and its implementation. While negotiating and drafting a detailed agreement may seem unnecessary when dealing with a long-time associate, there is always a risk that personnel can change and verbal agreements can be forgotten, leaving the ANC with nothing but the written agreement. Clearly detailing the parties’ obligations, rights, and compensation goes a long way to reducing disputes and provides the base for a successful relationship. In these agreements, ANCs should ensure they have robust termination and audit rights, allowing them to take necessary action if the person or entity they are working with fails to perform or begins to draw outside of the proverbial lines.

ANCs should also be mindful of any exclusivity or non-disclosure/non-competition clauses. While someone may be the top choice for a particular project, ANCs should preserve their ability to select others for different projects. Broadly worded exclusivity and non-disclosure/non-competition clauses can prevent ANCs from doing so.

Finally, ANCs should ensure they receive fair value for their Infrastructure Act programs, either through direct payments, a guaranteed work-share, or other financial terms. ANCs should be wary of promises of future work without negotiating and agreeing on specific amounts. Don’t settle for vague claims that the project will result in lower prices in the community without contractually requiring those lower prices.

ANC partners: Protecting and formalizing relationships

For entities working with ANCs on Infrastructure Act opportunities, the same principles discussed above apply. Conduct due diligence into the ANC, confirm it can perform, and clearly define the parties’ rights, obligations, and compensation. In particular, businesses should endeavor to meet with the ANC’s board of directors as they have the ultimate control of the corporation. Establishing a positive relationship with the board of directors can go a long way to ensuring the relationship is a success.

Businesses should also determine what type of expectations the ANC has in terms of shareholder hire and land access. If shareholder hire is expected, figure out what form will it take and whether there will be an objective goal to meet or only a general preference. If the project needs to access the ANC’s land, also determine if separate land use agreements and payments need to be negotiated. These are all issues that may arise, and it is better to address them at the beginning of the relationship so that there is no surprise or questions later on.

The Infrastructure Act is an excellent opportunity for Alaska Native Corporations and companies looking to work with them. To lay the groundwork for success, everyone must be proactive about the opportunities they select, the people and entities they work with, and the protections and rights they negotiate. Taking these steps at the outset creates guardrails for success—and the ability to resolve issues if they occur.

Christopher Slottee of Schwabe, Williamson & Wyatt, P.C., is an Anchorage-based lawyer who practices commercial law and serves Alaska Native corporations.

This article summarizes aspects of the law and does not constitute legal advice. For legal advice for your situation, you should contact an attorney.

Updated: 
01/26/2022 - 9:32am