On January 6, NASBP had the opportunity to meet with a few of the new members of the 112th Congress during a swearing-in ceremony. NASBP staff discussed issues of importance to the surety bond industry with several of the freshmen including U.S. Representative Nydia Velázquez (D-NY) and her staff. Representative Velázquez is the former Chair and current Ranking Member on the House Small Business Committee. During the conversation, NASBP emphasized the need to make the changes permanent to the Small Business Administration (SBA) Surety Bond Guarantee Program, such as increasing the guarantee to $5 million and by vesting discretion in the Administrator to determine the Program’s liabilities, which expired on September 30, 2010.

In addition, NASBP stressed the need for greater reforms to the Program, such as lowering the fees charged to sureties and contractors, increasing the guarantees to sureties, and combining the Prior Approval and Preferred Program into one unified program. While hearing NASBP’s concerns, the Congresswoman noted that she was no longer the Committee Chair and was uncertain what position the current Chair, U.S. Representative Samuel Graves (R-MO), might take regarding the SBA Surety Bond Guarantee Program.

On January 26, the House Small Business Committee approved its oversight plan for the 112th Congress. The oversight plan calls for the Committee to conduct hearings and investigations concerning the following: the SBA programs that provide training and advice to small businesses, the federal procurement system, which includes an evaluation of federal agency protections against contract bundling and an evaluation of the management of the SBA that may include its mission, whether agency employees in the field are empowered to assist small businesses, duplication of offices and missions at SBA headquarters, effectiveness of personnel management to ensure that employees are rewarded for assisting small businesses, and capabilities of SBA employees to provide proper assistance to small business owners.

NASBP recently met with a House Small Business Committee staff member who indicated that after the Committee addresses health care reform, it will likely begin to examine regulations that hinder small business growth. This may be an opportunity for NASBP to address the practice of improper contract bundling and to make suggested reforms to the SBA Surety Bond Guarantee Program to update the SBA Program to current industry practices.

NASBP continues to work with U.S. Senator Ben Cardin’s (D-MD) staff to pursue legislation, which would return the increased surety bond guarantee limits to $5 million and which would allow the Administrator discretion to determine the Program’s liabilities. Recently NASBP and Surety & Fidelity Association of America (SFAA) met with Senator Cardin’s staff to discuss strategy in the Senate and to map out a plan in the House should the Senator’s proposal be approved by the Senate. At this point, it is uncertain whether the Senator’s proposal would be included in another bill or would be introduced as a standalone measure. With Congress unlikely to approve of any additional appropriations to federal programs, this bill would not create any additional spending for taxpayers.

Recently, NASBP and SFAA met with staff from U.S. Representative Clifford Stearns’ (R-FL) office to discuss H.R. 173, legislation that aims to increases the bond requirement for Durable Medical Equipment Suppliers from not less than $50,000 to not less than $500,000, while operating under the Medicare program. According to the Representative’s staff, the proposal is based on the high amounts of Medicare fraud in Florida and other states. While both organizations believe the bill has merits, NASBP and SFAA voiced their concerns over the high bond threshold and its impact on small businesses. Furthermore, a $500,000 bond requirement could create a capacity issue for those providers who have multiple locations throughout the U.S. His staff seemed open to NASBP and SFAA concerns and asked that NASBP and SFAA offer alternative language to the bill. Thus far, NASBP and SFAA are the only organizations to raise concerns with H.R. 173. The bill is not scheduled for a hearing.