SFAA, NASBP and a Coalition of Partners Strongly Support Bill Providing Essential Protections on WIFIA Financed Projects

--News Direct--

The Surety & Fidelity Association of America (SFAA), National Association of Surety Bond Producers (NASBP), and a coalition of industry partners commend Senator Mark Kelly (D-AZ) and Senator Kevin Cramer (R-ND) for the introduction of S.2928, the “Water Infrastructure Subcontractor and Taxpayer Protection Act”. This legislation provides essential protections for workers, suppliers and contractors by requiring payment protection on federally financed infrastructure projects receiving Water Infrastructure Finance and Innovation Act (WIFIA) assistance, including public-private projects (P3s).

“Bonding WIFIA-financed P3 projects will protect taxpayer dollars, ensure project completion, protect local small business contractors and workers, and promote economic growth,” said Lee Covington, President and CEO of SFAA. “As more and more water infrastructure projects come online, and P3s become more common in the space, WIFIA must be modernized to include the same payment and performance requirements that protect all other federally funded infrastructure projects,” continued Covington.

P3 projects have increased in popularity over the years; however, the lack of clarity for requiring payment and performance protections on P3 projects can force taxpayers to absorb additional costs of rebidding a project. Without the payment protections bonds provide, subcontractors, suppliers, and workers are often left unpaid for extended periods if the contractor defaults. The solution ensures parity for protections between traditional project delivery methods and P3 projects utilizing the WIFIA program, and the same protections required in the TIFIA program and other federally financed projects.

In addition, surety bonds provide payment protections for workers, subcontractors, and suppliers and provide an economic benefit to taxpayers. A recent study by Ernst & Young (EY), The Economic Value of Surety Bonds, reported:

• Unbonded construction projects are more likely to default than bonded projects – by up to 10 times.
• When a contractor defaults on an unbonded construction project, the completion cost is 85% higher than on projects protected by surety bonds.
• 75% of public project owners report that surety bonding reduces contractor pricing by an average of 3.2%.
• Five times as many public project owners report bonded projects are more likely to be completed on time or ahead of schedule, and contractors prioritize bonded projects over unbonded projects.

Read the entire EY report at www.surety.org/suretyprotects.

“Construction is a risky business, and for over 80 years, the federal and state Miller Acts have protected against the risk of loss by requiring payment and performance bonds,” related Mark McCallum, CEO of NASBP. “NASBP and SFAA look forward to working with Senators Kelly and Cramer and the U.S. Congress, on a bipartisan basis, to pass this essential bill,” continued McCallum.

The coalition of partners includes:

American Property and Casualty Insurance Association

American Subcontractors Association

Business Coalition for Fair Competition

Council of Insurance Agents and Brokers

Finishing Contractors Association International

International Union of Operating Engineers

Mechanical Contractors Association of America

National Electrical Contractors Association

National Association of Minority Contractors

National Association of Mutual Insurance Companies

National Association of Surety Bond Producers

Sheet Metal and Air Conditioning Contractors’ National Association

The Association of Union Constructors

The Construction Employers of America

The Surety & Fidelity Association of America

Women Construction Owners and Executives

The Surety & Fidelity Association of America (SFAA) is a nonprofit, nonpartisan trade association representing all segments of the surety and fidelity industry. Based in Washington, D.C., SFAA works to promote the value of surety and fidelity bonding by proactively advocating on behalf of its members and stakeholders. The association’s more than 425 member companies write 98 percent of surety and fidelity bonds in the U.S. For more information visit www.surety.org.

Founded in 1942, the National Association of Surety Bond Producers (NASBP) is the association of and resource for surety bond producers and allied professionals. NASBP members specialize in providing surety bonds for construction contracts and other purposes to companies and individuals needing the assurance offered by surety bonds. www.nasbp.org

Contact Details

SFAA

Peter Roth

+1 703-401-0676

proth@surety.org

NASBP

Kathy Hoffman

+1 240-200-1278

khoffman@nasbp.org

Company Website

https://surety.org/

View source version on newsdirect.com: https://newsdirect.com/news/sfaa-nasbp-and-a-coalition-of-partners-strongly-support-bill-providing-essential-protections-on-wifia-financed-projects-777352184