Perspectives of Construction and Surety Industry Professionals Offer Unique Insight

The Associated General Contractors of America Surety Bonding and Risk Management Conference I attended in early February provided a unique insight into the concerns of construction and surety executives. Most of the discussion centered on subcontractor pre-qualification means and methods. Many construction and surety execs have expressed concerns that some subcontractors are barely holding on financially after suffering through the latest construction recession and may not have the financial reserves and manpower required for the anticipated increase in workload.

Significant time during the meeting was spent on discussing the best ways general contractors could verify subcontractor bonds. We gave them a list including sources, such as A.M. Best, the U.S. Treasury List, etc. while emphasizing the best resource is a NASBP surety bond producer, a list of which can be found at the Directory posted at www.nasbp.org. Also, several suggested that contractors establish a system to review a subcontractor bond that included checking the bond for accuracy, assuring the bond has been properly completed and prepared, as well as, confirming that the bond has received approval by calling the company underwriter.

Also, several attendees reported an increase in fraudulent bonds. Even with these issues reported, many had an upbeat attitude overall about the coming year with the anticipation that there could be an increase in available construction work. They were glad to hear that capacity is good and that the surety companies are aware that they need to develop a way to address the expected increase in Public-Private Partnership (3P) projects.

NASBP Advocacy

NASBP is monitoring the many state legislatures that have proposed bills that impact the surety product and the people that depend on its value and protection. NASBP’s Government Relations Team is working hard to advocate for surety with regard to legislation proposed in New Mexico, Maryland, and elsewhere. At the federal level, NASBP CEO Mark McCallum and Government Relations Director Larry LeClair have been busy meeting with federal legislators and their staff to advance NASBP’s 2013 Legislative Agenda. A high priority has been reintroducing the Security in Bonding Act into this year’s Congress. NASBP was pleased to learn that Representative Richard Hannah (R-NY 22nd) has reintroduced the bill in the House as H.R. 776. They continue their efforts to have the bill introduced by the Senate. Be sure to read the Capitol Hill Update and the CEO’s Column in this issue for more information on NASBP’s work at the state level and on the Hill.

NASBP E&O Insurance Program Development

Currently, NASBP is working on providing an Errors & Omissions (E&O) Insurance program for NASBP members. NASBP bond producers, especially bond-only agents, have expressed concerns over the availability of E&O insurance, and NASBP wants to meet that need with a viable option. Immediate Past President John Rindt and Mark McCallum have collaborated in researching and organizing the details of this program. NASBP plans to provide members more specific information about the NASBP E&O Program at the Annual Meeting.

NASBP Surety School Level III

The NASBP Surety School Level III curriculum development is almost completed, and NASBP has scheduled the first session for this advanced curriculum to be held this August in Denver, CO. This is a huge addition to our NASBP Surety School. Tom Padilla has been heading up the effort with the contributions and work of Dedi Belis, Tom Durkin, Ed Heine, Susan Hecker, Larry McMahon, Erle Benton, Matt Cashion, Paul Amstutz, Jim Lareau, Bud Herndon, Bob Shaw, Ralph Pulver, Fran McGrath, Joe Ruch, Jeff Broyles, Lynne Cook, Kathleen Mitchell, Liz Bottemiller, Mark Munekawa, and Christopher Johnson. Their efforts were complimented by the hard work of Managing Director, Professional Development and Education Ann Latham and Assistant Director of Educational Programming Cathrine Nelson in gathering the details required to file a new school curriculum for continuing education (CE) credits throughout the country and assisting in developing the training manuals, cases, and other support materials. I cannot stress enough the gratitude we, as an Association, owe this group. They have been absolutely amazing! When you next see them, please make a note to thank them personally for their contribution. NASBP has scheduled a brief introductory roll out of the NASBP Level III at the 2013 Annual Meeting.

April Annual Meeting

Speaking of the Annual Meeting, we are in the final stages of preparing for the NASBP Annual Meeting, and it is going to be great. Registration is on pace to be record-setting! The weather is going to be perfect—San Francisco local member Susan Hecker has given us her personal guarantee of this. The Annual Meeting Program Committee, lead by Kurt Lundblad and Brian Deimerly and consisting of John Sanders, Novica Prekpala, Sara Finn, Lynne Cook, and Susan Hecker, have organized an interesting and educational program. Our keynote speaker, John Mauldin, one of the world’s most read economists and author of “Bulls Eye Investing,” Just One Thing,” “End Game,” and of two weekly online newsletters, “Outside the Box” and “Thoughts from the Frontline,” which are read by over 1,000,000 readers will be engaging and informative. His presentation on “Where Are We On the Road to the End of the Debt Super Cycle” will give us a glimpse, from a fiscal conservative’s perspective, of the choices we face as a nation and the end result of those actions. Bring a crying towel—you may need it. Visit www.nasbp.org for more details about the Meeting.

Keep in mind everyone will be able to access the details about the Annual Meeting & Expo close at-hand with the NASBP Annual Meeting App, which you will be able to download in April from your app store. Director of Technology Dave Golden and Director of Meeting Services Bethany Jones have “Raised the Bar” with this new feature for our Annual Meeting. The App is easy to use and a great way to quickly obtain the answers to the questions–what, where, and when about the events scheduled for the Annual Meeting.

We have about 50 days left to the end of my term as NASBP President, so I have to ask the question…Have you met my challenge to you of doing one more thing this year with NASBP than you did last year?

See you in sunny San Francisco in April!

Sincerely,

Carl E. Dohn, Jr.
NASBP President

Carl E. Dohn, Jr. is President of Dohn & Maher Associates in Palatine, IL. He can be reached at carldohn@dohn.com.