NASBP Capitol Hill Update

Capitol Hill Update

Federal Construction Procurement Legislation: H.R. 776 Not included in NDAA

As reported on NASBP’s staffblog,  the two provisions of H.R. 776 in the House version of the 2015 National Defense Authorization Act (NDAA) that addressed individual surety and increased the guarantee from 70% to 90% in the U.S. Small Business Administration (SBA) Bond Guarantee Preferred Program were not included in the final NDAA package as signed by the President. Next Congress, however, we expect Senators Ben Cardin (D-MD) and Rob Portman (R-OH) to introduce the “Construction Consensus Procurement Improvement Act of 2015,” which is supported by 13 organizations that comprise the Construction Procurement Coalition (CPC), including NASBP. This is important as we have not had a bill introduced in the Senate that addresses the individual surety issue.

The bill provides a framework for growth in the construction industry and for more efficient federal government procurement through simple, no-cost-to-the-government solutions. Specifically, the bill addresses reverse auction procurement for design and construction services for all federal agencies, encourages better utilization of design-build project delivery, and helps to prevent fraud by providing financial certainty to assets that support individual surety bonds. Additionally, the bill would require bonds on federal Public-Private Partnership (P3) opportunities and would eliminate periodic threshold increases to the Federal Miller Act. 

Outcome of the 2014 Mid-Term Elections

Add one more Senator to the Republican column: Congressman William Morgan “Bill” Cassidy (R-LA) defeated three-term Senator Mary Landrieu in Louisiana. As expected, the December 5 runoff election was not even close with Cassidy taking 56% of the vote. That now gives Republicans 54 seats in the Senate, a nine-seat pickup for the 2014 Mid-terms. Republicans have 54 seats, to the Democrats 46. Also, it will be the first time in 138 years that a Democrat hasn't represented Louisiana in the U.S. Senate. The Republicans have their largest House majority since the Hoover administration, with a 54-seat majority (244-186). Additionally, the 114th Congress will contain 53 senators who had previously served in the U.S. House of Representatives. That is more than any Congress since at least 1899, before the direct election of Senators. Critics argue that this "housification" of the Senate could increase polarization.

Of particular interest to NASBP will be the shift in change in the Senate Congressional Committees. It appears the Senate Armed Services Committee (SASC) will be chaired by John McCain (R-AZ). Senator McCain has long sought this post, based upon his previous military service. In the House, Representative Mac Thornberry (R-TX 13th) will be the new chair of the House Armed Services Committee (HASC), replacing Representative “Buck” McKeon (R-CA 25th). Representative Adam Smith (R-WA 9th) remains as Ranking Minority Member. Thornberry is currently the HASC Vice Chairman and has served on the House Intelligence Committee.
 
The Senate Committee on Small Business and Entrepreneurship will be chaired by David Vitter (R-LA), and the Ranking Member will likely be the Senator Ben Cardin (D-MD), whom NASBP has worked with on a number of issues. As a result of the outcome of the Mid-term elections, Democrats lost several members on the Senate Small Business Committee, including Senators Kay Hagan (D-NC), Mark Pryor (D-AR) and Mary Landrieu (D-LA). Now the House Small Business Committee will be chaired by Representative Steve Chabot (R-OH 1st-), and the Ranking Member will continue to be Nadia Velázquez (D-NY 7th). Representative Richard Hanna (R-NY 22nd) will likely continue to Chair the Small Business Subcommittee on Contracting and Workforce. This Subcommittee was of particular importance to members of the coalition as several individual contracting reform measures were passed from this Subcommittee.
 
The Senate Homeland Security & Government Affairs Committee (HSGAC), where the individual surety bill was referred, will likely be chaired by Senator Ron Johnson (R-WI). HSGAC is also facing significant turnover with five Committee members out of 16 not returning for the 114th Congress. Those Committee members are: Senators Carl Levin (D-MI), Mark Pryor (D-AR), Mark Begich (D-AK), Tom Coburn (R-OK), and Mary Landrieu (D-LA). It is likely that Senator Tom Carper (D-DE) will take over as Ranking Member once he hands over his chairmanship to Senator Johnson. The committee will need to appoint at least three Republicans and at least two Democrats. 

Finally, the House Committee on Oversight & Government Reform (OGR) will be chaired by Representative Jason Chaffetz (R-UT 3rd), who replaces Darrel Issa (R-CA 49th), who was a diligent investigator of what he considered government wrongdoing. Representative Elijah Cummings (D-MD 7th) remains as Ranking Democrat on OGR. With the new incoming chairs and freshman Senators on these key committees, NASBP will undertake an educational campaign to educate these offices about our issues. 

Standard Form 28

Earlier this year, NASBP submitted a comment letter to the General Services Administration (GSA) regarding the current information collection requirement, which provides that, in order to qualify as a surety, individuals must complete and furnish contracting officers with Standard Form 28. SF 28 provides the contracting officer with necessary information to evaluate the individual who wishes to serve as a surety and to examine the assets pledged to back his or her surety bond obligations. Based on the notice in the Federal Register, only two comments were received. GSA then asked for additional comments on or before December 15, 2014. NASBP and others are considering opening a Federal Acquisition Regulation (FAR) Case to request that the FAR Council examine the assets that an individual has pledged will back his or her surety bond obligations. This strategy will provide a two-pronged approach—pursuing both a regulatory and a legislative solution to this ongoing problem.

NASBP and BCFC Paper About P3s Now Available

Earlier this year, NASBP worked with the Business Coalition for Fair Competition (BCFC) to create a model P3 issue white paper. The white paper provides a basic understanding of P3s while asking Congress and various levels of government not to impede, prohibit, or delay the use of P3s to help fund public projects. To review the white paper, click here.