State Government Relations Update

This fall, NASBP collaborated with the American Subcontractors Association (ASA) and the Surety & Fidelity Association of America (SFAA) in an examination and analysis of the myriad of public-private partnership (P3) laws throughout the country and reported these findings in a chart titled, “Public-Private Partnership Laws in the States, Including Surety Bond Requirements.”

The Chart will serve as an important tool in NASBP efforts to execute the NASBP Legislative Agenda for 2014. Once the 2014 state legislative sessions begin, NASBP plans to devote significant time to advocating for proper bonding requirements for P3s. P3s are increasing in popularity as governments look for alternative forms of financing. P3s allow state and local governments to use a private sector partner to finance, build, and operate infrastructure projects.

NASBP advocates that P3 laws include payment and performance bonds at 100% of the construction portion of the contract. Despite the delivery method of the project, performance and payment bonds serve a critical purpose. They pre-qualify contractors and protect taxpayers and subcontractors and suppliers in the case of non-payment.

The following is a brief summary of the “Public-Private Partnership Laws in the States, Including Surety Bond Requirements” Chart and the associations’ findings of the current bonding requirements for P3s throughout the country.

The following six states have laws with a P3 statute, which reference in whole or in part the state’s Little Miller Act: Florida, Maine, Maryland, Massachusetts, North Carolina, and Virginia.

Most state P3 statutes provide for less than ideal bonding requirements. Many states have enacted P3 laws that give discretion to the contracting authority. These states may not require bonding at 100% the contract price, or may not require both payment AND performance bonds. Several states have enacted P3 laws where other forms of security are acceptable. Finally, numerous states have enacted P3 statutes that remain silent on bonding. In states where bonding is discretionary, NASBP plans to work with these states’ contracting agencies staff to educate them on the importance of bonding public works projects.

The following 16 states have no P3 Program in place: Hawaii, Idaho, Iowa, Kansas, Kentucky, Michigan, Montana, Nebraska, New Hampshire, New Mexico, New York, Oklahoma, Rhode Island, South Dakota, Vermont, and Wyoming.

NASBP will closely monitor P3 legislation introduced in these states in the coming year to ensure any legislative proposals provide for adequate bonding protections.

For more details about a state’s P3 requirements, contact Shannon Crawford, Manager of State Relations at scrawford@nasbp.org or 202-464-1170 and ask for a copy of the “Public-Private Partnership Laws in the States, Including Surety Bond Requirements” Chart and accompanying executive summary.