H.R. 3534 was referred to the Committee on the Judiciary of the U.S. House of Representatives. The Subcommittee on Courts, Commercial and Administrative Law, chaired by Representative Howard Coble (NC-6), conducted a hearing on the bill on March 5 in which NASBP provided written and oral testimony in support of the bill (NASBP written testimony is available by clicking here; responses to additional questions of NASBP by Ranking Member Steve Cohen are available by clicking here). Other witnesses also testified in support of the bill, including Jeannette Weller, owner of JBlanco Enterprises, a Colorado subcontracting company unable to claim on an individual surety payment bond, and Robert Little, Esq., an attorney formerly in government service as an acquisition counselor to federal contracting agencies, who stated that of the individual surety bonds he had reviewed during his time advising government contracting agencies “all of the assets were unacceptable.” Later, in characterizing some of those assets, Mr. Little explained: “[t]hat is, it would be an asset hiding in a trust, lurking behind another document or another legal instrument, and as you tried to unravel it and unravel it, you would eventually either give up or you would just reject the bond and say we can’t figure out what this asset is, we can’t figure out how we would ever liquidate it if we could ever figure out what it was and if we could ever get our hands on it.”

On March 20, H.R. 3534 received full consideration of the Committee on the Judiciary, which held a mark-up session of that and other bills. During the mark-up session, H.R. 3534 was read for amendment; it was amended to delete a provision that would have allowed federal contracting agencies the flexibility to require corporate surety bonds for procurements. The committee also amended the bill to include a requirement for a GAO study on the use of individual surety bonds. H.R. 3534 then was ordered to be reported favorably as amended to the House. Though amended, H.R. 3534 still contains the key requirement that individual sureties would be required to pledge only assets that were unconditionally guaranteed by the federal government and deposit those assets with the federal government. To steal a phrase from our past space program: “Houston, we have lift off.”

In the coming weeks, a committee report on H.R. 3534 is expected, and it will be placed before the House. The Congressional Budget Office (CBO) is scoring the bill to assess its budget impact, if any, as required in our legislative process. Industry groups continue to sign up in support of H.R. 3534; most recently, Vet Force, a coalition of veteran’s interest groups, indicated their support, which should play well in Congress.

In the likelihood that H.R. 3534 passes the full House of Representatives, the Senate, possibly the Committee on Homeland Security and Government Affairs, will be its next destination. As in our effort in the House of Representatives, NASBP is working closely with SFAA to identify potential champions in the Senate. NASBP members already have made initial contacts with key members in the Senate to make them aware of the importance of H.R. 3534 and to enlist their support. Staff also has visited additional Senate offices for the same purpose.