NASBP Testifies before the U.S. Congress for the Third Time this YearFor the third time this year, NASBP was afforded the opportunity to testify before the U.S. Congress. This time it was at the request of U.S. Senator Mary Landrieu (D-LA), who invited NASBP to testify before the U.S. Senate Committee on Small Business & Entrepreneurship. NASBP testimony before the U.S. Senate Committee is unprecedented for the Association and reveals how NASBP continues to make inroads on Capitol Hill. In this instance, Josh Etemadi, Sales Manager of Construction Bonds, Inc.—a Division of Murray Securus, who is Chair of the NASBP Small and Emerging Business Committee, testified on behalf of NASBP. Etemadi’s testimony focused on a provision included in S. 3442 of the SUCCESS Act that would increase the maximum contract size guaranteed by the U.S. Small Business Administration (SBA) through the SBA Surety Bond Guarantee (SBG) Program from $2 million to $5 million.While NASBP supports the intent of this provision, NASBP would prefer an even greater contract size increase from $2 million to $6.5 million, as Etemadi testified. NASBP believes that by increasing the contract size to $6.5, the Program will be aligned with the simplified acquisition threshold and with the needs of other small business contracting programs, such as the 8(a) Minority Small Business and Capital Ownership Development Program. NASBP continues to advocate for further enhancements to the SBG Program, such as providing the Program Administrator with statutory discretion to determine Program liabilities to attract more surety company participation, which was included in the American Recovery and Reinvestment Act of 2009, raising the guarantees offered to participating sureties to a uniform level of 90%; reducing the fees charged to businesses to access the Program, and supporting current SBA efforts to establish a system of internal coordination and communication between the SGB and other SBA small business programs. To view how Etemadi articulated these points in his testimony, click here on the C-SPAN video. Also, see pictures below.Reforms to the SBA Surety Bond Guarantee Program & Mentor Protégé Agreements Moving in Congress

We have two funding bills in the U.S. Congress with the potential to move forward, offering vehicles for enhancements to the U.S. Small Business Administration’s Surety Bond Guarantee Program and to mentor-protégé teaming arrangements under various federal agency programs, both of which have been supported by NASBP. The first funding bill resides in the U.S. Senate where legislation is being debated that provides funding to the Hurricane Sandy relief effort. The second funding bill, which Congress is expected to act on very soon, will provide funding for the military for 2013, known on Capitol Hill as the 2013 National Defense Authorization Act (NDAA). Both funding measures include language that make significant reforms to the SBA Surety Bond Guarantee Program. The nearly 2,000-page defense spending bill also includes language that addresses mentor-protégé teaming agreements, giving the SBA Administrator the authority to oversee the 13 federal agencies that have mentor-protégé programs. Such oversight would help reduce paperwork and regulatory burdens to create one standardized measure for success to promote portability at such arrangements between agencies and offer greater opportunities without harming the protégé small business status. There is a strong likelihood that one of these funding bills will be enacted in 2012.

In terms of the US SBA Bond Guarantee Program, the NDAA increases the contract size guaranteed by the SBA from $2 million to $6.5 million, and up to $10 million if a federal agency’s contracting officer certifies that the guarantee is necessary. Raising the guarantee limit from $5 million, as passed under the 2009 American Recovery and Reinvestment Act (ARRA), to $6.5 million is significant, because it will align the Program with the simplified acquisition threshold and with the needs of other small business contracting programs, such as the 8a Minority Small Business and Capital Ownership Development Program. Furthermore, raising the guarantee limit to $6.5 million will also allow small contractors to obtain assistance at higher bond amounts on more federal contracts, especially those from contracting authorities, such as the Department of Defense where the average size of construction contracts awarded to small businesses for fiscal year 2010 exceeded $5.9 million. Also included in the NDAA is a provision that gives the SBA Administrator discretion to determine the Program liabilities, so that a denial of a guarantee to a surety company can be partial, reflecting only the amount of harm suffered by the government, and not a complete denial of the entire guarantee. NASBP supported these same provisions when they were adopted as part of ARRA, which expired in September 2010. Since then, NASBP has continued to advocate for reinstatement of these critical reforms during our meetings with lawmakers and staff on Capitol Hill and during our Annual Legislative Fly-in. It is our understanding that Congress will vote on the 2013 NDAA before they leave Washington for the holiday recess.

Over in the Senate, Senator Ben Cardin (D-MD) and Mary Landrieu (D-LA) have offered an Amendment to the Hurricane Sandy funding bill, which is similar to the NDAA in that it addresses the Surety Bond Guarantee Program. However, their Amendment goes further by increasing the guarantee offered to surety companies from 70% to 90% in the Preferred Surety Bonding Program. NASBP has also supported this reform, and brought it to the attention of Senator Landrieu’s at an event hosted for her on behalf of NASBP. Should the Cardin/Landrieu Amendment not be included in the Hurricane Sandy Relief bill, or if the bill fails in Congress, NASBP will continue to advocate for this provision in 2013.

Senator Olympia Snowe (R-ME) Bids Farewell

At her final committee hearing of the Senate Small Business & Entrepreneurship Committee, Ranking Committee Member U.S. Senator Olympia Snowe (R-ME) received high praise from her fellow colleagues for her dedication and exemplary work as a lawmaker. Senator Snowe began serving in Congress in 1979, as she quipped, “before some of my staff were even born.” During her tenure, Snowe and her staff championed small business issues, a number of which were supported by NASBP. In fact, she sponsored legislation in 2007 that amended the SBA Act to make significant improvements to the SBA Surety Bond Guarantee Program.She is a former Chair of the Small Business & Entrepreneurship Committee as well as the first Republican woman to secure a full-term seat on the Senate Finance Committee and the third woman in history to serve on that Committee. With her election in 1994 to the U.S. Senate, Snowe became the second woman Senator in history to represent Maine (following the late Senator Margaret Chase Smith, who served from 1949 to 1973). In November 2006, Snowe was re-elected to a third six-year term in the U.S. Senate with 74 percent of the vote. She can be viewed speaking at the hearing during which Etemadi testified. See link to C-SPAN video by clicking here.