Mandatory bonding on federally funded P3 projects is key in NASBP's 2016 legislative advocacy

By Shannon Crawford posted 01-20-2016 10:15 AM

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, NASBP is paving the way by meeting with members of the U.S. House of Representatives and Senators who serve on the Committees that oversee WRDA, to open a dialogue about how bonding requirements would be used to protect federal tax dollars comprising the grant and loan funds under the act, he says.

NASBP also continues to work with the other groups in the Construction Procurement Coalition, which has supported construction procurement reform legislation that includes a P3 bonding provision. 

NASBP's state-level advocacy also will emphasize P3 issues, with NASBP's state government affairs representatives mobilizing and educating lawmakers of the importance of bonding in states where P3 bills are before the legislature, LeClair says. Many states have statutes allowing for P3s, and one of NASBP's priorities is ensuring that bonds are required in such agreements, he says.

From June 7-8, 2016, in Washington, DC, the NASBP Annual Legislative Fly-in will take place, followed by the Federal Construction Contracting Seminar on June 9. The Fly-in remains highly valuable for maintaining relationships with Congress “because we’ve built up some really effective synergy on the Hill,” LeClair says. It gives NASBP members and affiliates an opportunity to meet face-to-face with their congressional representatives and remind them of the protection that bonding offers. 

NASBP will continue its outreach to small and emerging contractors in 2016. The most recent National Defense Authorization Act, which NASBP lobbied for in 2015, contains two provisions that can benefit such contractors, LeClair says. One toughens controls over assets backing individual surety bonds on federal construction projects, while the other raises the guarantee for sureties in the Small Business Administration's Preferred Program from 70% to 90%, thereby encouraging more sureties to participate and more regulated markets for emerging contractors.

In addition, “we continue to bolster our website with important info dedicated to small and emerging contractors, and we also have a committee dedicated to small and emerging contractors, as well,” LeClair says.