NASBP Issues Several Comment Letters to Federal Agencies
During the past few weeks NASBP responded to several federal agencies that are seeking comments relating to the General Services Administration’s (GSA) Standards Forms (SF); the U.S. Treasury’s SF 28, “Affidavit of Individual Surety"; the Small Business Administration’s (SBA) Surety Bond Guarantee Program; and the Federal Highway Administration’s (FHWA) Public-Private Partnership (P3) Model Contract Guide.
In its November 16, letter to GSA, NASBP supports GSA’s proposed rules to revise SFs to expand the options for organization types and to clarify liability limitations. Over the years, NASBP has raised these issues with GSA, requesting changes resulting from problems incurred by NASBP members. With help from U.S. Representative Michelle Lujan Grisham (D-NM-1st), who sent a letter to GSA in support of NASBP’s letter requesting that they look into the matter, the Federal Acquisition Regulatory Council, which is charged with government-wide procurement policy, ultimately decided to open a FAR case to address these issues.
NASBP provided a comment letter in response to the Department of the U.S. Treasury, which was seeking comments relating to SF 28. NASBP’s November 19, letter ensures that Treasury is aware of language included in Section 874 of the 2016 FY National Defense Authorization Act (NDAA), that specifically addresses the types of assets individual sureties may pledge to secure bonds. The letter added that Section 874 will necessitate the development and implementation of new regulations governing the types of acceptable assets and the procedures governing the acceptance of such assets, and this information collection requirement concerns the existing, but soon to be superseded, regulations with respect individual surety bonds.
NASBP provided comments to the SBA regarding the proposed rule that redefines “affiliation” for certain SBA programs, which includes the Bond Guarantee Program. The proposed rule appears to establish two different standards for determining small business size status – one for bidding on government contracts and subcontracts and the second for securing a loan or bond guarantee. NASBP sought advice from participants on its Attorney Advisory Council, expertise in the federal contracting arena. As described in the December 1, letter, NASBP raised concerns that the proposed rule creates the potential for inconsistent results regarding the company’s small business status; that is, a company potentially could qualify as a small business for purposes of obtaining a business loan or a surety bond, but not for government contracting opportunities.
Finally, NASBP, the American Subcontractors Association (ASA), and SFAA issued an industry comment letter to FHWA requesting that its best practices “Contract Guide” include recognition of requirements for performance and payment security for P3s. NASBP, ASA, and SFAA have issued similar letters to FHWA. However, those letters have gone unanswered. It may be time to impose a strategy similar to that used with GSA and request a member of Congress issue a letter to FHWA requesting the agency respond to our concerns.
President Signs $305 billion 5-year Highway Bill
December 4, President Obama signed into law the Fixing America’s Surface Transportation Act or the “FAST Act”. This 5-year highway bill is the longest passed in over a decade. The FAST Act received bipartisan support in both chambers of Congress, passed the U.S. House by a vote of 359-65 and the U.S. Senate by a vote of 83-16. The importance of the legislation cannot be underscored enough. "This will be the biggest jobs bill approved in this Congress," said Rep. Peter DeFazio (D-Ore.). The FAST Act increases transit spending by 18% and highway spending by 15%. The bill authorizes $281 billion for the Highway Trust Fund. The funding source for the Highway Trust Fund is the gas tax, which has not been increased since 1993 and has not met current infrastructure needs because of inflation and more fuel efficient vehicles. This legislation addresses that shortfall by claiming funds from the Federal Reserve Surplus fund, selling a portion of the Strategic Petroleum Reserve, and allowing the IRS to hire private tax collectors. These funding sources were contentious, but both parties were able to reach agreement.
A copy of the bill can be found here.
Capitol Hill Update
As you know, on November 25, President Obama signed the 2016 FY NDAA. Of particular importance to the small construction business and surety communities are the two provisions that appear in Section 874 of the Act, which tighten controls over assets backing individual surety bonds on federal construction projects and increase the guarantee provided to surety companies that participate in the SBA Surety Bond Guarantee Preferred Program. Again, many thanks to those of you who came to Washington as part the NASBP Fly-In over the past several years to lobby your members of Congress in support of these two provisions. Enacting legislation is never easy, and, in fact, over the past several congresses it has been extremely difficult, given the current political environment. NASBP was fortunate to work with members of Congress, such as Representatives Richard Hanna and Sam Graves, who supported these provisions over the past six years and offered timely amendments that led to a successful outcome. NASBP is also grateful to several key legislative staff, who ensured these provisions would remain in the NDAA final bill this year. Even though it took nearly six years to accomplish this important legislative success, consider this fact: of the nearly 11,000 bills that were introduced in the 113th Congress, only 3% of those bills were signed into law.
If you have not seen NASBP’s press release, please do so by clicking here.
For more information, contact NASBP Director of Government Relations Larry LeClair at lleclair@nasbp.org.