NASBP Legislative Priorities Receive Increasing Visibility on Capitol Hill

Congressional supporters of HR 776 make their voices known

On Wednesday, April 9, 2014, the House Armed Services Committee conducted a hearing entitled “National Defense Priorities from Members for the FY2015 National Defense Authorization Act.” During this hearing members of the House are given the opportunity to make recommendations for bills that should be included as part of the NDAA. In last year’s authorization, the Small Business Administration was able to increase the Surety Bond Guarantee amount from $2M to $6.5M. Following this success, NASBP is hopeful that the provisions in H.R. 776, “the Security in Bonding Act of 2013,” will be included in the next authorization.

Several key members of the House Small Business Committee spoke in support of including H.R. 776 in the NDAA. Small Business Committee Chair, Sam Graves (R-MO-6th), stated “H.R. 776… will make it easier for small businesses to get surety bonds, and thereby compete for construction contracts. Likewise, it helps ensure that small business subcontractors are paid, by insisting that that the bonds accepted by the federal government meet commercially applicable standards.” View Graves’ testimony here.

The bill’s primary sponsor, House Small Businesses Contracting and Workforce Subcommittee Chair Richard Hanna (R-NY-22nd) advocated for H.R. 776 as well. Hanna stated, “As construction projects get larger, it becomes harder for small businesses to obtain the necessary bonding to bid on these projects. In these cases, they sometime turn to disreputable sureties who issue worthless bonds that place the taxpayers at risk. This is a no-cost bill that makes it easier for small businesses to get legitimate bonds, and that makes sure that all bonds are worth more than the paper on which they are written. This makes sure agencies get a quality construction job, that taxpayers get what they pay for, and that small businesses get paid.” View Hanna’s testimony here.

Lastly, Representative Grace Meng (D-NY-6th), Ranking Member of the Subcommittee on Contracting and Workforce, emphasized the importance of the individual surety provision in H.R. 776. “Unfortunately, there are well-documented cases where bad actors do not have the resources necessary to back the bonds they issue, placing both the government and small subcontractors at risk. H.R. 776 requires that bonds be worth the paper they are printed on,” Meng said. View Meng’s testimony here.

Such Congressional support would not be possible without the persistent government relations work of NASBP staff. “The efforts by CEO Mark McCallum and Director of Government Relations Larry LeClair advocating for the NASBP Membership and the surety bond product are paying great dividends,” said Chris Leach, Chair of the NASBP Political Action Committee SuretyPAC and Vice Chair of NASBP’s Government Relations Committee. “Mark and Larry are connecting with the decision-makers on the Hill, succinctly educating and explaining the benefits of surety bonds and the reasons why certain legislation should be supported or opposed.”

As noted above, their efforts continue to bear fruit, and, as a result, NASBP has been invited and has testified several times before Congress on issues pertaining to the Small Business Administration’s (SBA) Surety Bond Guarantee Program and H.R. 776 to clarify and strengthen the assets of those individuals providing surety bonds on federal construction projects. Most recently, the provision in H.R. 776, “the Security in Bonding Act,” which called for increasing the guarantee in the SBA Preferred Surety Bond Guarantee Program from 70% to 90%, was marked up and passed out of the House Small Business Committee (HSBC) via voice vote. To ensure its passage, NASBP lobbied nearly all members of the HSBC to ensure they were comfortable with the provision in the bill before them.

Then, NASBP lobbied members of the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law which has committee jurisdiction over the individual surety provisions in H.R. 776. Over the course of the past two weeks, NASBP has lobbied nearly all 11 members on the Subcommittee including the Majority and Minority Counsels. NASBP’s goal is to have the full Judiciary Committee either markup the bill or to voice vote it out of Committee. The bill sponsor, Representative Richard Hanna (R-NY-22nd), is also lobbying the bill by having colleague-to-colleague conversations about the importance of the legislation with Judiciary members including the Chairman Bob Goodlatte (R-VA-6th).

“The NASBP is getting real traction as Mark and Larry continue to build solid relationships with our Congressional representatives who understand and support the business of surety,” Leach added.

Representative Grace Meng (D-NY-6th) agrees to speak at NASBP Legislative Fly-in on June 12

Representative Meng will be speaking at this year’s NASBP Legislative Fly-in regarding her efforts to prevent individual surety fraud. Please be sure to thank Rep. Meng when you see her this year. Register for the NASBP Legislative Fly-in by clicking here.