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AIA’s A201 Contract Documents: What’s New for 2017

By Martha Perkins posted 06-12-2017
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The American Institute of Architects (AIA) recently released the 2017 edition of its key agreements in the A201 family of documents. These design-bid-build agreements, updated every ten years to reflect the evolving construction industry, are universally seen as an industry standard and have crucial implications for surety bond professionals. “The 2017 release included several revisions to AIA’s flagship document, the A201 General Conditions to the Contract For Construction ,” Kenneth Cobleigh, Esq., Managing Director and Counsel of AIA Contract Documents, said. “In addition, there were a number of revisions made to the A201-related owner-contractor agreements, ...
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Why it's crucial to verify a surety bond's authenticity

By Kathy Hoffman posted 03-26-2014
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NASBP advises contractors to be sure they've taken the necessary steps to verify the authenticity of a surety bond. Not doing so could have wide-ranging consequences that could affect subcontractors, suppliers and project owners, putting construction projects in jeopardy. A contractor will not be awarded a contract if a private owner or contracting officer is aware that the bond is unauthorized or invalid, amounting to a lost business opportunity, says NASBP General Counsel Martha Perkins. “For future projects, that governmental entity receiving an invalid bond may give that contractor a very unsatisfactory past performance evaluation,” which will affect ...
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CPAs play an integral role in bonding for construction contractors

By Martha Perkins posted 09-06-2016
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Selecting an accounting firm is a critical decision for construction firms, particularly those looking to qualify for bonding for a contract. Certified Public Accountants (CPAs) and other trusted advisers play an integral function to a construction firm seeking bonding, says Jack Callahan, CPA, Partner and Construction Industry Practice Leader at CohnReznick and a participant on the NASBP CPA Advisory Council . Callahan says his firm takes its role as an independent CPA for its contractor clients incredibly seriously. A key focus of the CPA is presenting financial information in an appropriate format that is in accordance with generally accepted ...
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CPAs need continuous involvement when emerging contractors seek bonding

By Shannon Crawford posted 10-25-2016
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An open dialogue between a surety, contractor, and certified public accountant is crucial to guide emerging contractors finding themselves in new territory when entering the surety market, says David V. Jean, a CPA and a principal of Albin, Randall & Bennett . “It's pivotal for emerging contractors going to the next level to have strong financial-management practices in place,” says Jean, who serves on NASBP's CPA Advisory Council , a NASBP resource team of CPAs with expertise in areas including financial issues concerning contract and commercial surety. The importance of an open dialogue comes with the need for continuous involvement by the CPA in ...
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Mandatory bonding on federally funded P3 projects is key in NASBP's 2016 legislative advocacy

By Shannon Crawford posted 01-20-2016
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A critical component of NASBP's 2016 legislative advocacy will be ensuring that surety bond requirements are included in public-private partnerships, or P3s, that involve federal loans, grants, and resources. NASBP is already focusing on the reauthorization of the Water Resources Development Act (WRDA), which includes a provision that provides grants and loan guarantees to states and localities for P3 agreements for water infrastructure projects. It is unclear, however, whether bonding provisions apply says Lawrence LeClair, NASBP Director of Government Relations. The bill will likely come up for reauthorization during the spring, he says. In the meantime, ...
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NASBP panelists: Relationships can foster growth amid buyer's market

By Kathy Hoffman posted 05-17-2016
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Surety professionals are facing a buyer's market, but they have opportunities to grow their businesses by providing valuable expertise and building key relationships, say panelists who served on the State of the Industry Panel at NASBP's 2016 Annual Meeting & Expo May 15-18, in Colorado Springs, CO. The panelists convened after NASBP CEO Mark McCallum's address on the morning of Tuesday, May 17. McCallum served as moderator. The panelists were Mike Bond of NASBP Affiliate Zurich North America; Joshua Etemadi of NASBP Member firm of Construction Bonds, Inc.—a Division of Murray Securus; John Knox of NASBP Affiliate SureTec Insurance Co.; and Bob Raney ...
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CPAs who know construction can help contractors achieve healthy benchmarks

By Martha Perkins posted 02-14-2017
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Construction contractors need to work with a CPA who knows their industry to help ensure their financial performance is in line with healthy benchmarks and to remedy any signs of financial trouble, says Julian Xavier, CPA and managing principal of CliftonLarsonAllen, LLP 's Walnut Creek, CA office. Xavier serves on the NASBP CPA Advisory Council . CPAs can help contractors understand finances and plan accordingly, allowing them to win business as well as being more financially prepared. Xavier says healthy benchmarks for contractors include: • Cash greater than 5% of annual revenue • A line of credit of at least 5% of annual revenue • Tangible equity ...
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NASBP maps offer crucial information on legislation affecting surety industry

By Kathy Hoffman posted 02-08-2016
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NASBP provides its membership access online at www.nasbp.org , to maps that highlight local legislative activity, bonding thresholds and other valuable information across the United States. The maps feature: NASBP comment letters on bills and regulations State statutes authorizing public-private partnerships Federal, state and local agencies that certify disadvantaged business enterprises (DBEs), with hyperlinks to agency websites A survey of state bonding thresholds With the maps , NASBP ...
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U.S. Reps. Hanna, Ribble reflect on legislative achievements in construction, infrastructure

By Mark McCallum posted 07-19-2016
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U.S. Reps. Richard Hanna (R-NY 22nd) and Reid Ribble (R-WI 8th) are retiring from Congress this year at the end of their terms, but not without working on significant legislation for the surety and construction industries. In recent interviews, they spoke about their accomplishments and challenges in Congress. U.S. REP. RICHARD HANNA Hanna said the most enjoyable part of his six years in Congress has been learning what it takes to make a bill become law, with a “perfect example” being the surety provisions that were included in the fiscal year 2016 National Defense Authorization Act (NDAA), which took about four years to accomplish. Hanna ...
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CPAs can help contractors develop sound succession plans

By Kathy Hoffman posted 01-09-2017
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The number one issue construction contracting companies will face over the next 10 to 20 years is succession planning, according to accounting firm BKD, LLP . As the amount of wealth in the nation transfers generations, that also includes wealth tied to family-owned firms. The orderly transfer of control and assets is critical to the future success of these owner-managed or family-run enterprises. A lack of planning and clear succession causes many problems for companies and can be incredibly stressful for family members, owners and employees. Certified public accountants have a deep involvement in companies' financial operations and owners’ personal finances, ...
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Industry should closely watch rulemaking as it affects T-listed sureties, attorney says

By Kathy Hoffman posted 04-29-2015
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Following the promulgation of a final rule by the United States Department of the Treasury's Bureau of the Fiscal Service containing noteworthy revisions to 31 C.F.R. Part 223, NASBP and other groups need to stay apprised of federal agency rulemaking as agencies have greater individual discretion in determining the reasons why a bond can be declined and a surety's Treasury-listed status can be revoked, attorney Scott Lichtenstein said. The changes to Part 223 set forth in the Final Rule were outlined in an article co-authored by Lichtenstein . “The chief concern is that the Treasury’s final rule as promulgated contains very little in the way of substantive ...
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CPAs bolster construction contractors' financial reporting, address risks

By Shannon Crawford posted 01-24-2017
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Construction-oriented certified public accountants (CPAs) have an advantage in helping contractors produce accurate, timely financial reports and address a wide range of risks, says Emilio F. Alvarez , founder and Managing Partner of NASBP Associate E.F. Alvarez & Co. The primary issue a construction-oriented CPA can address to help contractors is accuracy, which includes the use of the proper revenue-recognition method, the appropriate representation of underbillings and overbillings, and a conservative approach to revenue recognition on claims, says Alvarez, who serves on the NASBP CPA Advisory Council. http://www.nasbp.org/cpaadvisorycouncil/home ...
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SuretyPAC helps NASBP maintain a distinct voice on Capitol Hill

By Shannon Crawford posted 05-10-2016
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SuretyPAC, which has been NASBP's political action committee for more than two decades is a critical means for NASBP to advocate for the Association's federal legislative agenda. “SuretyPAC disbursements provide NASBP Government Relations staff with invaluable face-time to educate legislators in a more focused way on the merits and purpose of the product,” says NASBP Government Relations Committee Chair Kevin Garrity of the NASBP Member firm of Rose and Kiernan in East Greenbush, NY. SuretyPAC Chair Chris Leach of the NASBP Member firm of Arthur J. Gallagher, says the PAC's sole focus on the interests of surety is a crucial reason why key owners or officers ...
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Register Now for the NASBP Federal Construction Contracting Seminar held June 11 - Washington, DC

By Kathy Hoffman posted 02-27-2015
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In recognition of the need for education on procurement dos and don’ts and on the creation of proper relationships in the federal construction arena, NASBP is offering a one-day, intensive seminar that will explore hot, critical issues in federal construction contracts: "Creating a More Perfect Union? Relationships That Work and Those That Don’t in Federal Construction Contracts." This seminar has been developed for bond producers, surety underwriters, contractors, and subcontractors and will be offered in Washington, DC, on June 11, 2015, the day following the NASBP Legislative Fly-In. Attendees will learn about dos and don'ts in public contracting relationships, ...
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NASBP launches surety-focused ethics course for CE credit

By Kathy Hoffman posted 10-13-2015
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NASBP has introduced the online course, “ Ethics for Surety Bond Producers ,” to provide surety professionals with continuing education ethics credit specific to their industry, as well as to benefit nonmembers who work closely with the industry. Most states require three hours of continuing education every two years for bond producers to be licensed. Many ethics courses, however, are more broad and only focus on insurance, so NASBP decided a surety-specific course was necessary given the unique three-party relationship involving a principal, an obligee, and a surety. “Everything in this course is going to resonate with a surety bond producer as relevant ...
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NASBP Annual Meeting session to examine benefits and risks of joint ventures

By Martha Perkins posted 03-23-2016
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Joint ventures can serve a variety of purposes, with sureties playing a crucial role; but the parties involved must make sure the arrangement is legal, says Adrian L. Bastianelli, III, Co-Managing Partner of the national construction law firm of Peckar & Abramson in Washington, DC. Bastianelli and Michael C. Zisa, a Partner and Chair of the Surety Practice Group at Peckar & Abramson, will lead a continuing education presentation on joint ventures at NASBP's 2016 Annual Meeting May 15-18, in Colorado Springs, CO. One important purpose of a joint venture is to spread risk among contractors who are willing to share profits, Bastianelli ...
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Final NDAA Conference Report includes two Surety Provisions

By Lawrence LeClair posted 09-30-2015
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Yesterday the House Rules Committee released the final conference report on the National Defense Authorization Act (NDAA) of 2016, the funding bill for the U.S. Department of Defense. Included in the final conference report were two provisions of importance to the surety industry-one addressing individual sureties and the second that increases the guarantee to sureties who participate in the SBA Surety Bond Guarantee Program from 70% to 90%. The House is expected to vote on the conference report tomorrow. The Senate may follow sometime next week. After advocating for these provisions for the past three Congresses in H.R. 3534 (Hanna), 776 (Hanna) and 838 (Hanna), ...
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NASBP Working with Industry Stakeholders to Create Financial Data Standards for WIP

By David Golden posted 01-11-2016
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NASBP , along with AIG , GALLINA LLP , Liberty Mutual Surety , Travelers , and Zurich are working to conduct a pilot on the use of standards to reduce costs and streamline processing in the transfer of financial data between construction CPAs, contractors, agents and carriers. As part of this pilot, a glossary of digital terms (the technical term is "XBRL taxonomy") has been developed to represent the Work in Process (WIP) report. Other participants in the working group are the Construction Financial Management Association (CFMA) , the Financial Accounting Standards Board (FASB) and the Surety & Fidelity Association of America (SFAA) . XBRL ...
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NASBP Celebrates 75th Anniversary with Limited-Edition Communication Pieces

By Kathy Hoffman posted 04-20-2017
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The National Association of Surety Bond Producers (NASBP) is celebrating its 75 th Anniversary in 2017. To illustrate the Association’s history while looking toward the future, NASBP produced a series of exciting communication pieces to share with the NASBP membership—including a commemorative brochure, an illuminated six-panel historical exhibit, and a special anniversary edition of Surety Bond Quarterly magazine . Attendees at the NASBP 2017 Annual Meeting and 75th Anniversary Celebration, being held April 23-26 in Boca-Raton, Florida, will receive the full-color, 60-page commemorative brochure during registration. “The brochure will provide a ...
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Breaking News: Senate Passes NDAA 91-3

By Shannon Crawford posted 11-10-2015
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As a follow-up to Larry’s blog dated last Thursday, November 5, the Senate has just voted to pass the revised version of the NDAA 91-3. The full 1,320-page bill text is here , Please refer to section 874, which includes our surety provisions . The President is expected to sign the bill into law. Please let us know if you have questions. We will continue to keep you updated.
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