NASBP 2009 HIGHLIGHTS: THE YEAR IN REVIEW

NASBP is a dynamic community of Members, Affiliates, and staff who are dedicated to the ideals of professionalism and sound practices in the surety industry. Read how their efforts and initiatives in 2009 redefined the words, Lead, Educate, Network, Advocate, Inform, Connect, Participate, and Invest, to advance the interests of bond producers and suretyship.

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Lead

• Elected NASBP’s 2009–2010 officers, who include NASBP President, Todd P. Loehnert, Senior Vice President, Bond Manager, and Co-chair of the National Surety Practice Group of Wells Fargo Insurance Services.
• Conducted a Fly-in for Members and Affiliates to meet with their members of Congress. In conjunction with the event, NASBP organized an issue orientation briefing where U.S. Congressman Elijah Cummings (D-MD), U.S. Congresswoman Yvette Clarke (D-NY), and U.S. Small Business Administrator Karen Mills, spoke on issues of concern to the membership.
• Organized a nationwide letter campaign through the NASBP Grassroots Action Center that resulted in Members sending numerous “Take Action Now” letters to their members of Congress encouraging them to enact federal legislation to fund investments in infrastructure projects.
• Worked with U.S. Senate and House staff members to craft language for enhancements to the SBA Surety Bond Guarantee Program that were included in the Economic Stimulus Package.
• Participated in the American Institute of Architects (AIA) revision process of the AIA A312 performance bond and payment bond, AIA A311 performance bond and labor and material payment bond, and AIA A310 bid bond. NASBP attended both meetings of stakeholders with respect to these documents and commented on the first draft. AIA anticipates publishing the revised documents after the first quarter of 2010.
• Worked with the office of U.S. Congresswoman Clarke on draft legislation that was introduced in the fall by Clarke as H.R. 3771. Sought additional support from external stakeholder groups as well as members of Congress requesting that they sign on as co-sponsors. The bill provides federal grants to small minority, women owned, and veteran-owned construction firms to be used to pay for professional services, such as accounting, legal and business consulting services, for the purpose of creating the internal business systems and processes that will facilitate access to financial and surety credit.
• Submitted written testimony jointly with the Surety & Fidelity Association of America (SFAA) to a subcommittee of the District of Columbia (DC) Council that was conducting a roundtable on Green Building practices and on the DC Green Building Act of 2006. The testimony addressed surety community concerns with respect to the performance bond requirement of the DC Green Building Act of 2006 and requested the introduction of legislation that would amend the DC Green Building Act of 2006 to remove the performance bond requirement as presently written.
• Provided the NASBP President’s comments on surety prequalification and subcontract bond requirements for Engineering News-Record magazine’s Executive Perspectives.
• Conducted an e-mail marketing campaign, titled “America Works,” that promoted the NASBP Career Center to the membership and reminded employers of the benefits of using the job board.
• Offered 25% off the price of job posting packages posted at the Career Center in the spring.
• Presented the John ‘Jack’ J. Curtin, Jr. President’s Award to Matthew K. Cashion Jr. of The Cashion Company, Inc. and A. Howard Cowan, of Howard Cowan Bond Agency, Inc. for their exceptional service to the Association.
• Presented Executive Vice President Richard A. Foss with an NASBP Board Resolution that recognized his many accomplishments during his 11 years of service to the Association.
• Handled numerous assistance requests from Members by furnishing information on a variety of topics, including Little Miller Acts, countersignature requirements, subcontractor default insurance, state
  statutes of repose, agent licensing, unlicensed surety, and prequalification requirements.
• Addressed numerous public inquiries on surety information and practices to owners, contractors, and subcontractors, such as how the surety bond claims process works and how to obtain a copy of Miller Act payment bonds.

Educate

• Delivered sold-out sessions of Level I and Level II classes at the January William J. Angell Surety School in Houston, TX. The total attendance was 128.
• Implemented the NASBP Virtual Seminar series, which has provided information and education to more than 1,500 people. By year end, conducted 12 events presented by nationally recognized industry experts on a variety of topics including the economy, federal and state laws related to surety, financial reporting, and business development.
• Held the summer session of the William J. Angell Surety School for the first time at Indiana University-Purdue University campus in Indianapolis, IN where 97 students and 14 faculty participated.
  Completed content development of part one of NASBP’s first custom on-line course, titled “Fundamentals of Commercial Surety,” which will include four parts and will be certified for continuing education credit. The full course will be offered in the spring of 2010.
• Provided Members and Affiliates resources to become familiar with 13 new ConsensusDOCS documents through articles, web seminars, and audio broadcasts. These resources addressed the new Green Building Addendum (310), new Federal Subcontract (752), Building Information Modeling document (301), new Subsubcontract Agreement (725), and comparison of ConsensusDOCS to the American Institute of Architects forms. Members and Affiliates can receive a discount when they purchase ConsensusDOCS.
• Developing for release in 2010 a revision of “The Basic Bond Book,” a unique industry resource jointly drafted in 1993 with AGC.
• Held the Risk Workshop, “Analyzing Risk and Understanding the Bid Process,” in Atlanta, Georgia in March. This workshop provided in-depth instruction on construction risks, including bidding and contract language.
• Submitted a detailed article on surety bond verification co-authored by the NASBP General Counsel and the SFAA General Counsel for publication in the American Bar Association’s (ABA) “Public Contract Law Journal.” Also, the same authors co-authored an article titled, “Beware of Inadequate or Fraudulent Surety Bonds” for publication in the Surety Supplement of Engineering News-Record magazine and an article, titled “Verification of Surety Bonds,” that was presented by SFAA to a meeting of the Public Contract Law Section of the ABA.
• Created a web page that provided information and resources on risk management and insurance topics related to surety through the work of the Risk Management and Insurance Committee. Some of the topics addressed were contractual risk transfer, design claims, builders risk insurance, contractor liability for design, federal contracting, and insurance markets. Also, published articles in the Pipeline e-newsletter on five of these topics.

Network

• Held the Annual Meeting in Palm Springs, CA, which included networking events, presentations, and educational sessions. Generous support was provided by sponsorships from 18 companies. An Expo of companies providing services to Members and Affiliates occurred in conjunction with it.
• Held a reception in the House Rayburn Office Building on Capitol Hill in Washington, DC for the membership to meet and to thank members of Congress and their staff for their support of NASBP legislative efforts.
• Organized a panel for the NASBP Annual Meeting of representatives from national construction industry associations that included the Associated Builders and Contractors, Inc. (ABC), AGC, American Subcontractors Association, Inc. (ASA), and Associated Specialty Contractors, Inc. (ASC). Each panelist addressed their constituents’ experiences as principals and claimants of surety bonds in today’s economy.
• Organized three successful Regional Meetings of Members and Affiliates that included: Regions 1, 2, & 3 held in Coeur d’Alene, Idaho; Regions 4, 5, 6 & 7 held in Colorado Springs, Colorado; and Regions 8, 9, 10 & 11 held in Washington, DC.
• Delivered a presentation on the 2009 surety market given by the NASBP President at the NASBP Region 12 Meeting.
• Met with executives of Great American Insurance Company to discuss the surety industry and best practices of underwriters and bond producers. This is the fifth year that an NASBP President and the NASBP Leadership have met with executives of a surety company. In previous years, NASBP leaders met with executives of Zurich, Safeco, CNA and the Chubb Group.
• Held joint meetings with the AGC and SFAA to plan industry initiatives and to map agendas for 2010 joint meetings that will address surety and related topics.
  Included among the initiatives discussed were strategies to ensure preservation of statutory bonding requirements.
• Worked with the American Insurance Association and the SFAA to blunt legislative measures that would weaken statutory bond requirements in various states including Colorado, Ohio, and Rhode Island.
• Held meetings between NASBP Officers and the Executive Vice President of the ASA and senior staff members of AGC to identify and to discuss issues of mutual interest.
• Delivered a presentation titled, “The State of the Surety Industry,” at the annual Construction Industry CPAs/Consultants Association (CICPAC) meeting to over 125 attendees.
• Presented a web seminar, titled “Banking and Bonding,” for ABC by an NASBP past president.

Advocate

• Contacted and described surety issues of importance in one day to more than 40 members of Congress thanks to the efforts of Members and Affiliates who participated in the NASBP Legislative Fly-in Day.
• Advocated for reduction of fees imposed on contractors and surety companies and for increasing the bond guarantee to 90% to increase surety company participation in the U.S. SBA Surety Bond Guarantee Program in light of a report that SBA 504 loans increased due to the reduction of loan fees.
• Met with members and staff of more than 15 Congressional Offices to discuss various legislative issues, ranging from enhancing the SBA Surety Bond Guarantee Program, to helping small construction firms expand their capacities and qualifications to compete on federal procurement projects, and to prohibiting the practice of improper contract bundling.
• Distributed NASBP Political Action Committee, SuretyPAC, contributions to federal Congressional candidates. Also, approved raising the SuretyPAC contribution amount that maybe given to Congressional candidates.
• Submitted written testimony that was published as part of the official hearing record and met with the Minority Staff Counsel to the House Veterans’ Affairs Subcommittee on Economic Opportunity concerning NASBP’s opposition to Section 3 of H.R. 294,the “Veteran-Owned Small Business Promotion Act of 2009,” about NASBP’s concern that Section 3, which limits the amount of performance and payment bonds that can be required of small, veteran-owned businesses performing construction contracts for the Department of Veterans Affairs to no more than 50% of the contract amount.
• Developed and posted NASBP Government Relations Position Briefs on critical legislative and regulatory matters. These briefs addressed amending the Federal Acquisition Regulation to require contracting officers be more transparent in decisions to waive bonds on overseas construction projects, lessening the administrative burden on contracting officers by more narrowly defining acceptable assets used to back performance and payment bonds on federal construction projects, and reinvigorating the U.S. SBA Surety Bond Guarantee Program.
• Successfully convinced the Office of the Attorney General of Nebraska to correct the Nebraska Motor Vehicle Auction Dealer bond form that was outdated with respect to current Nebraska law; the bond form required a “resident” agent signature rather than a “registered” agent signature as required by Nebraska Statute.
• Opposed temporary regulations in Oregon that vested contracting officials with discretion to relax mandatory surety bond requirements for “Go, Oregon!” construction procurements. Correspondence was sent to the Director of the Department of Administrative Services.
• Encouraged the Pennsylvania Department of Transportation to further lessen the duration of its proposed concrete pavement warranty pointing out that, long warranty durations are disfavored and pose difficult underwriting challenges when such warranties exceed three years, as such warranties increase substantially the uncertainty regarding projections about the business’s viability.
• Assisted the Mississippi local contractor and surety community in responding to proposed bond forms developed by the Mississippi Department of Transportation.
• Organized grassroots campaigns and developed position statements and legislative analyses on various state measures and the practice of suretyship.
  Provided these via the NASBP government relations e-bulletin, titled Focal Point, direct e-mail notifications, and presentations made by NASBP at industry meetings to enable the membership to effectively voice their opposition to these measures in writing and in person.

Inform

• Developed a white paper titled, “Performance Bonds on Green Building Construction,” co-authored by the NASBP General Counsel and SFAA Director of Underwriting and Assistant Counsel, for use in informing owners and contractors about the interface of the performance bond and compliance with green building requirements.
• Sent 35 letters to county judge executives administering courthouse construction projects in Kentucky asking that they review those projects to ensure that project bond requirements conform to the applicable statutory, regulatory, and contract requirements.
• Created a Government Relations Power-Point presentation for each Regional meeting for Members to receive a report on the NASBP current government relations legislative and regulatory issues and actions, industry relations priorities, and trends impacting the bond product and surety community.
• Provided substantive programs at each NASBP Regional Meeting that addressed the SBA Bond Guarantee Program, current economic conditions, LEED green building issues, and federal contracting opportunities.
• Surveyed the NASBP membership and interviewed executives of surety companies, reinsurance companies, and reinsurance brokers about the state of the current surety market. The findings were incorporated into the “State of the Industry” presentation at the NASBP Annual Meeting in Palm Springs, CA.
• Met with Ohio State Senator Shirley Smith (D) to persuade her to amend Ohio H.B. 1 that originally proposed waiving bonds up to $600,000 for small minority contractors. Though not defeating the measure, this meeting helped to convince her to reduce the maximum amount of contracts on which bonds could be waived up to $300,000.
• Expressed written concern about New York legislation that lets the Metropolitan Transportation Authority establish a “Small Business Mentoring Program” for small businesses in the construction trades with the ability to waive bid, payment and performance bonds for public works contracts.
• Submitted an article, titled “Improper Contract Bundling Hampers the Growth and Viability of Small Construction Firms,” for publication in Modern Contractor Solutions magazine. The article was written by the NASBP Assistant Director of Federal and State Relations.
• Submitted an article titled, “NASBP Career Center — High Caliber Resource for Surety Industry Positions” for ABC Construction Executive magazine. The article was written by the NASBP Assistant Director of Government Relations and Communications.
• Apprised Members of NASBP’s accomplishments in 2009 and the breadth of NASBP Member benefits by producing and mailing Members the Quarterly Dispatch each of the first three quarters of 2009 and the 2009 Highlights — The Year in Review at the end of the year.
• Met with staff of the National Conference of State Legislatures (NCSL) to discuss and to provide information on state legislative trends of concern to the surety industry.
• Informed local chapters and national offices of contractor and subcontractor groups about state and federal legislation that impinges on payment and performance bond protections and requested their assistance to oppose such measures.

Connect

• Sponsored two AGC Building Division meetings, where the NASBP President provided an assessment of the current surety and construction markets. NASBP also sponsored the opening receptions for each meeting where more than 100 contractors attended.
• Addressed representatives of VET-Force, a group of veteran business owners and veteran service organizations, of the importance of H.R. 3771. VET-Force agreed to endorse and to publicize the bill on its web site.
• Supported the Construction Financial Management Association (CFMA) comments opposing a U.S. Financial Accounting Standards Board (FASB) paper proposing that a company should recognize revenue only when it satisfies a performance obligation in the contract.
• Published Members’ assessment of the current state of the surety market and predictions for the next few years in an article for the CFMA Building Profits magazine.
• Sought support for an NASBP campaign to encourage California school district officials to require performance and payment guarantees on all of its contracts with manufacturers of relocatable (portable) classrooms. The ASA of CA chapter lended support to this initiative.
• Provided bond producer insights given by the NASBP President on how contractors can enhance their attractiveness to sureties for a construction industry newsletter, “Contractor’s Business Management Report.”
• Met with staff for U.S. Senator Olympia Snowe (R-ME) upon hearing of the Senator’s concerns about contract bundling and explained how NASBP shares her concerns about how improper contract bundling is preventing small businesses from receiving prime contract awards on federal projects.
• Teamed with representatives of the developer community in Washington, DC and of SFAA to advocate for legislative changes to the DC Green Building Act.
• Requested information from Members about their experiences with the American Institute of Architects (AIA) A312 and AIA A310 for use in the AIA revision process of these forms.
• Worked with the AGC of Missouri and local Members to draft language for an amendment to a state bill on design-build transportation projects, so the bill would require the performance and payment bonds on these projects of at least a certain minimum amount.
• Worked jointly with industry partners SFAA and the American Insurance Association in analyzing and taking action on various legislative measures that impact bond requirements.

Participate

• Delivered a presentation on the surety market and NASBP issues of concern to the U.S. SBA Office of Surety Guarantees (OSG) and managers of its regional offices. Met with and provided information to the SBA OSG on ways in which to make enhancements to the Bond Guarantee Program.
• Urged Members to write their members of Congress to cosponsor S. 292/H.R. 275 that repeal Section 511 of the Tax Increase Prevention and Reconciliation Act of 2005. Section 511 of the Act mandates that effective 2012 federal, state, and local governments with total annual expenditures of $100 million or more withhold 3% from all payments for goods and services, including payments made to contractors for public works repair or construction.
• Presented at the tripartite meeting of the AGC, ASA, and ASC on the bond producers’ and lenders’ perspective on construction owners’ financing and ability to pay.
• Participated in a roundtable discussion organized by the U.S. General Accounting Office on the feasibility of requiring companies to post security, including surety bonds, to cover the cost of product recalls or the destruction of domestic and imported consumer products regulated by the Consumer Product Safety Commission.
• Participated in meetings of the drafting group and of the business marketing group for the ConsensusDOCS™ coalition, of which NASBP is an endorsing member.
• Participated in an American Arbitration Association (AAA) task group formed to review the qualifications required of neutral parties who perform as arbitrators for the construction industry. AAA used the task group’s comments to develop the new AAA Construction Industry Arbitration Rules and Mediation Procedures published this fall.
• Assisted the SBA Office of Surety Guarantees in its discussion with New York City over its Performance Bond Form to make it more equitable so the SBA will guarantee bonds on New York City construction projects.
• Assisted the SBA Office of Surety Guarantees in its dialogue with the City of New Orleans, Jefferson Parrish, and departments of the State of Louisiana on increasing utilization of the SBA Bond Guarantee Program.
• Contacted the Deputy Director of the Office of Small and Disadvantaged Business Utilization of the U.S. Department of Transportation to offer NASBP assistance to help small and minority businesses seeking bonding for transportation construction projects.
• Created the “Everyday is Advocacy Day” Program to encourage Members and Affiliates who travel to Washington DC to visit with their members of Congress any time of year.
  Created the “2009 NASBP Talking Points for Capitol Hill Visits,” a tool for the membership and staff to use when visiting members of Congress to discuss protecting and advancing the interests of bond producers and of suretyship.
• Posted a copy of the study by Clemson University on the use costs, advantages, disadvantages and impact of subcontractor default insurance on project participants by clicking here. Issued a joint press release with the Foundation of the American Subcontractors Association on the report.

Invest

• Furnished information and quotes to industry trade press, including Engineering News-Record magazine for an article on the changes enacted by the American Recovery Reinvestment Act of 2009 to the SBA Surety Bond Guarantee Program.
• Announced the appointment of Mark H. McCallum as Chief Executive Officer of the Association. Previously, McCallum served on staff as the General Counsel & Director of Government Relations.
  Engaged MarshBerry to conduct a benchmarking survey of Member agencies’ overall performance in comparison to industry standards. The results were distributed in the November/December issue of Pipeline.
• Continued to provide fill-in PDF documents of ConsensusDOCS™ bond forms that provide the convenience of allowing Members and Affiliates at no charge to utilize 11 ConsensusDOCS™ bond forms.
• Offered quarterly conference calls on topics of interest to the Association’s young leaders, the 5-15 Leadership Circle. The first featured the NASBP President describing challenges of providing the surety product in Kentucky.
• Amended the Bylaws to vest authority to amend the Bylaws in the Board of Directors. This action was taken as part of the NASBP Strategic Planning initiative, which includes modernization of the governance structure of the Association.
• Revised the NASBP Code of Professional Standards, now called the NASBP Code of Ethics.
• Created and/or updated eight NASBP Producers Tool Kit forms (www.nasbp.org/toolkit) in “fill-in” PDF format.
• Created an “IT Show and Tell” list of the latest information technology tools, applications, and services to help surety professionals save time and money. The list is posted on the web site.
• Placed a surety underwriter intern with a host contractor through the Surety Underwriter Intern Program co-administered by the NASBP, AGC, and SFAA.
• Managed the Program’s web site (www.suretyintern.org). The Program helps underwriters gain first-hand experience of a contractor’s daily business operations.
• Sponsored the Institute’s Associate in Fidelity and Surety Bonding Distinguished Graduate Award, which was presented to the graduate who obtained the highest cumulative grade average on this degree’s exams. Since 1988, NASBP has supported the renowned Institutes, also known as the American Institute for Chartered Property Casualty Underwriter (AICPCU) and the Insurance Institite of America. (IIA).

To find out how to become active in NASBP, contact Dasha Brock or click here for membership information.

Previous Years:
2008 Highlights
2007 Highlights