In response to NASBP member requests for information about states prohibiting directed suretyship, NASBP has released its Survey of State Anti-Directed Surety Statutes information map.
The map is the latest in a series the Association has produced to provide Members, Affiliates, Associates, and their clients information on local legislative activity, governmental initiatives, and other resources—right at their fingertips.
With bond producers often working in multiple states and impacted by various statutes, things can get confusing quickly. “A lot of the work our members do is state-level work, and all the different public works around the country are authorized by state procurements laws,” said Shannon Crawford, Assistant Director of Government Relations at NASBP. “Just because something happens a certain way in Texas doesn’t mean it happens the same way in Arkansas.”
Survey Of State Anti-Directed Surety Statutes
NASBP’s newest map indicates the states and their statutes that prohibit directed suretyship, which occurs when owners designate a specific producer or surety company from which contractors must obtain surety bonds for a specific project or series of projects.
The 42 states that have statutory prohibitions against directed suretyship are marked in dark blue, and users can view those statutes by clicking on the respective state. States that appear in light blue have no language that prohibits directed surety. The map serves as “a visual way to catalog information and quickly access these statutes,” Crawford said.
NASBP and multiple national organizations are opposed to the practice of directed suretyship, and the federal government prohibits its use on federal projects. The practice interferes with the crucial business relationships among a contractor, surety bond producer, and surety company, requiring contractors to provide confidential financial information to a surety agent or company other than their own for the sake of one project.
According to NASBP, “Directed surety interferes with competitive bidding and runs contrary to a free and open marketplace.”
Additional Resources
The information map series was kicked off with NASBP’s first map, a compilation of state P3 statutes, and since then the Association has been produced five more, which are continually updated. Its Survey of NASBP Comment Letters map is especially robust, cataloging hundreds of advocacy efforts NASBP has taken on behalf of its members. In California alone, for example, members can browse through 25 different comment letters.
Additional maps include a list of federal, state and local certifying agencies in the State DBE Certifying Agencies map, and a list of Producer Licensing State Agencies.
“The Survey of State Bond Thresholds map is absolutely my favorite map that we’ve done,” Crawford said. “While some states, like Ohio, have no threshold, others involve complex requirements—and the map simplifies them greatly. “Having that information easily available for our members is really exciting,” Crawford said.
NASBP will continue to update its existing maps and create additional resources depending on member feedback and industry trends. The resources have also been released in a convenient single document that members can save for access on the go. For a copy of this document, contact Crawford at scrawford@nasbp.org or 202.464.1170.
Ultimately, NASBP’s goal is to help members do their jobs more quickly. “We can do the research for them,” Crawford said.