The Build America Bureau (Bureau) has begun using sponsor payment arrangements for its legal advisors' fees. The fees for outside legal counsel engaged to represent the Bureau on a Railroad Rehabilitation and Improvement Financing (RRIF) or Transportation Infrastructure Finance and Innovation Act (TIFIA) financing transaction or other matter under task orders issued at no-cost to the Government will be paid by the applicant for credit assistance, the borrower, or its affiliate(s), as applicable (i.e., the project sponsor(s)). When outside legal counsel is hired to represent the Bureau and is paid by the project sponsor(s), only the Government, including the Bureau, is the client of such counsel.
On each such representation, the outside legal counsel selected by the Bureau will be responsible for executing its own engagement letter with the project sponsor(s). The counsel will have to provide a draft of the sponsor payment letter to the USDOT for comment prior to execution. Such letter has to be fully signed before the Bureau's outside legal counsel can start providing legal services on the financing transaction or other matter.
The sponsor payment letter will obligate the project sponsor(s) to pay all legal fees and expenses of the Bureau's outside legal counsel in connection with the relevant financing transaction or other matter, irrespective of whether the Government ultimately provides credit assistance to the borrower. The Bureau will review the invoices of its counsel prior to their submission for payment, but will not be liable to the outside legal counsel, project sponsors, or any other parties for payment of such legal fees and expenses, and will have no obligation to reimburse the project sponsors for any such payments.
The Bureau has developed a template sponsor payment letter, which can be found here.