NASBP Remains Active on Small Business Concerns Even as Congress Takes Recess

As most of you are aware, H.R. 3534, the “Security in Bonding Act,” was scheduled to be marked up in late June in the Senate Homeland Security and Government Affairs Committee (HSGAC); however, the bill was removed from HSGAC’s calendar, and it has not been rescheduled for another markup. Since then, NASBP and the Surety & Fidelity Association of America (SFAA) met with every member on HSGAC and showcased multiple examples throughout the country of small businesses being harmed from deficient or fraudulent individual surety bonds being placed on federal construction projects. NASBP remains optimistic that a markup may occur after Congress reconvenes in September. In the meantime, if you have not already done so, please consider calling members of HSGAC in their home district offices, and ask that they bring H.R. 3534 up for a committee markup when they return from recess. There are a limited number of days left in the Second Session of the 112th Congress, so time is of the essence, or the bill will likely die. After the recess, the Senate and the House will have only a limited number of legislative days left on their calendars before the November 6 General Elections.

If you live or your business is located in a state where a Senator serves on HSGAC, please call their home district office (numbers listed below) and ask they bring H.R. 3534 up for a markup after the recess.

Please make the following points when calling these Senate offices:
H.R. 3534 ensures that assets pledged to back individual surety bonds on federal construction projects are only those that are stable and secure, such as U.S. Treasury bonds and notes, and are placed in the care and custody of the federal government, so they may be liquidated quickly and easily to pay all valid bond claims; H.R. 3534 eliminates instances where individual surety bonds are pledged with insufficient or illusory assets, harming the federal government and the many small businesses that furnish goods and services on federal construction contracts; and H.R. 3534 eases the current administrative burden placed on federal contracting officers in determining whether various assets posted on federal construction projects comply with federal regulations and are sufficient to protect the contracting agency and subcontractors and suppliers. In your communication, please provide the number of businesses/clients your agency handles in their respective state, so the Senator understands your reach within his/her constituency.

Senate Members of HSGAC are:

• Joseph I. Lieberman, CT, (IND) Chairman, 860-549-8463
• Carl Levin, MI, (D); 313-226-6020
• Daniel K. Akaka, HI, (D); 808-522-8970
• Thomas R. Carper, DE, (D); 302-573-6291
• Mark Pryor, AR, (D); 501-324-6336
• Mary L. Landrieu, LA, (D); 202-224-5824
• Claire McCaskill, MO, (D); 314-367-1364
• Jon Tester, MT, (D); 406-728-3003
• Mark Begich, AK, (D); 907-271-5915
• Susan Collins, ME, (R), Ranking Member 207-780-3575
• Tom Coburn, OK, (R), 405-231-4941
• Scott P. Brown, MA, (R); 617-565-3170
• John McCain, AZ, (R); 602-952-2410
• Ron Johnson, WI, (R); 414-276-7282
• Jerry Moran; KS, (R); 785-232-2605
• Rob Portman, OH, (R); 614-469-6774
• Rand Paul, KY, (R); 502-582-5341

Pending Small Business Contracting Reform Initiatives in Congress

Several contracting provisions important to NASBP and part of its federal Legislative Agenda, including reforms to the U.S. Small Business Administration’s (SBA) Surety Bond Guarantee Program, were included in H.R. 4310, the National Defense Authorization Act of 2013 (NDAA). Those provisions included amending the definition of contract bundling to specifically include procurements for new construction; providing the SBA with the authority to oversee the 13 current mentor-protégé agreements that currently exist throughout the federal government; and elevating the Small Business Advocate within federal contracting agencies to senior acquisition positions, so they may concentrate solely on advocating for small businesses. In addition, increasing the contract size limit for the SBA Surety Bond Guarantee Program from $2 million to $6.5 million and providing the SBA Administrator with the discretion to determine the Program’s liabilities were included in H.R. 4310. While these provisions were not included in the Senate NDAA, NASBP and its industry allies have begun to strategize in an attempt to have these provisions included in a final NDAA bill. House Small Business Congressional Staff has asked NASBP to visit with NDAA Conferees once a Senate bill is approved to emphasize the importance of including the SBA Bond Guarantee provisions in the final NDAA bill as well as other contracting reform measures that were part of the House NDAA bill. NASBP may ask NASBP members to contact targeted Senators to ask that they support these important small business contracting provisions. More information will be forthcoming.

U.S. Small Business Bond Guarantee Program’s Quick App

Now under the U.S. Small Business Administration’s Prior Approval Program, small and emerging contractors can benefit from process improvements providing easier access to surety bonds under the SBA Surety Bond Guarantee Program. The SBA’s new Quick Bond Surety Guarantee Application and Agreement (as described in the Federal Register July 16 Final Rule) streamlines the application process for contract amounts not exceeding $250,000 and reduces the paperwork required to be submitted to the SBA. NASBP submitted comments on April 6, expressing NASBP’s support of the proposed rule and view of the new application process as a positive step, which may lead to greater participation in the Program. NASBP also offered additional comments to enhance the Program, such as removing surety notice requirements to the SBA of change orders exceeding a certain amount, which does not comport with current industry practices; reviewing the current fee structure of the Program; and establishing reporting mechanisms concerning why fees continue to increase.