SIO Awards Presented to 9 LSAs

Nine local surety associations (LSAs) were presented with the 2012 SIO Awards for Excellence in Surety Bond Promotion and Advocacy at the annual meetings of the National Association of Surety Bond Producers (NASBP) and The Surety & Fidelity Association of America (SFAA).

The Gold and Silver awards recognize Local Surety Associations (LSAs) for conducting at least ten and five public relations and educational activities, respectively, in a calendar year to promote the use of contract surety bonds in construction to non-surety audiences. The Advocacy Award is for LSAs that conduct significant activities advocating for suretyship, such as fighting legislative efforts to waive bonds or increase bond thresholds, or advocating for reasonable bond forms. Listed below are some of the activities that earned these LSAs their awards.

GOLD AWARD

One LSA received the Gold award for conducting at least 10 activities in 2012 to promote the use of contract surety bonding. It was the Surety Underwriters Association of Southern California.

Surety Underwriters Association of Southern California – The Surety Underwriters Association of Southern California (SUASC) presented numerous programs on surety bonding and the value of bonds for various audiences, including a presentation at the Crenshaw/LAX Transit Corridor Small Business Outreach event and the Orange County Transportation Authority’s conference. Many of SUASC’s presentations were given to small and emerging contractors, including those in attendance at the Los Angeles Unified School District Small Business Boot Camp, the Bridges to Success Training Program put on by the Los Angeles Housing Department, and the White House Urban Economic Forum hosted by the Obama Administration at the Los Angeles campus of Loyola Marymount University. An SUASC member also gave an educational presentation to veterans at the 2012 Vet Small Business Expo and to 8A contractors at the 2012 Small Business Association outreach event. Other educational and promotional activities were geared toward tribal contractors and women and minorities in the construction industry.

SILVER AWARD

Six LSAs received the Silver award for conducting at least five activities. The were the:

• Alabama Surety Association
• Carolinas Surety Association
• Florida Surety Association
• Surety Association of Indiana
• Surety Association of Kansas City, and
• Surety Association of St. Louis

Alabama Surety Association – The Alabama Surety Association performed numerous activities aimed at helping minority- and women-owned business enterprises (MWBEs) and other small contractors and was highly involved in the DOT’s Bonding Education Programs in Montgomery and Birmingham. They also gave presentations promoting bonding as part of the University of Alabama at Birmingham’s Minority Business Training & Development Program and Alabama State University’s Disadvantaged Business Enterprise Support Services.
Carolinas Surety Association – Carolinas Surety Association members performed several educational and promotional activities, including a webinar about surety bonding and the SBA program sponsored by both the U.S. Department of Housing and Urban Development and the SBA. Members also promoted subcontractor bonds, versus subcontractor default insurance, to the Charleston Chapter of the American Subcontractors Association, educated small business owners and contractors about the benefits of bonding as part of the City of Durham’s workshop series for small businesses, and presented a bonding class to Goodwill Industries of Southern Piedmont, which recently developed a construction division called Goodwill Construction Services.

Florida Surety Association – Florida Surety Association (FSA) members gave a “When You Build, You Should Bond” presentation to the Gulf Coast Association of Governmental Purchasing Officers, and the FSA was represented by a member on the Miami-Dade Board that oversees and regulates the Community Small Business Enterprise (CSBE) statutory construction program and represents the surety industry, explaining the benefits of bonding and how CSBE contractors can obtain bonding.  Each year, the FSA hosts a meeting in Tallahassee, FL, where its membership visits the capital building, hosts a number of guest speakers, and then visits the Florida senators’ and representatives’ offices to promote the use of commercial and contract surety bonds. FSA’s newsletter now is circulated to legislators and other obligees, and the reception has been positive, with more of them becoming aware of the FSA’s existence and influence. The newsletter has helped to influence legislators into contacting the FSA prior to bills being filed or during the committee review process so that our opinions may be heard. Also, an FSA member continues to promote the use of surety bonds as security for land development to Miami-Dade County and Broward County, which currently accept only LOC and cash bonds.

Surety Association of Indiana – The Surety Association of Indiana (SAI) performed numerous activities aimed at helping minority- and women-owned business enterprises (MWBEs) and other small contractors. The SAI led SFAA’s Model Contractor Development Program® (MCDP) in Indianapolis, which launched on March 22, 2012. SAI members also gave presentations that covered the SBA Bond Guarantee Program and other financial support programs for emerging contractors to the Indianapolis Airport Authority and at the 2012 Central Indiana Resource Fair.
Surety Association of Kansas City – Surety Association of Kansas City (SAKC) members presented the benefits of public official bonds and governmental crime coverage to city employees in Harrisonville and Peculiar, MO, and facilitated workshops as part of the DOT’s Bonding Education Program. An SAKC member also staffed a booth at the National Precast Concrete Convention in New Orleans, LA, where he promoted the benefits of obtaining surety credit to owners, general contractors, subcontractors, manufacturers, and suppliers.

Surety Association of Ohio – The Surety Association of Ohio’s (SAO) presentation to the Independent Electrical Contractors of Greater Cincinnati highlighted the benefits of using subcontract bonds to lower-tiered subs. The protection of payment and performance obligations by requiring surety bonds from subcontractors also was stressed to a group of contractors in Cleveland during a seminar. SAO members also spoke to commercial developers about the benefits surety bonds provide obligees in the private sector and promoted the use of surety bonds to architects and engineers at the Cleveland Engineering Society. As part of an ongoing effort to respond to issues created by construction reform in Ohio, SAO members also presented to the Construction Law Committee of the Columbus Bar Association and Ohio Facilities Construction Commission on how the industry is responding to and reshaping itself following the implementation of construction reform.

Surety Association of St. Louis – Surety Association of St. Louis (SASL) members were successful in reducing the bond penalty on the I-64 Daniel Boone Bridge from $8 million to $2 million and eliminating the forfeiture language that was in the original bond form. Presentations also were made to Cass County and Harrisonville City officials on public official bond requirements and to the St. Louis AGC on contractor lien filing requirements and how payment bonds can protect the general contractor. Contractors interested in getting into the bonded arena, who are part of the Fort Leonard Wood Entrepreneurs Club, benefitted as well from SASL’s presentation on surety bonding.

ADVOCACY AWARD

Additionally, these four LSAs were recognized with Advocacy awards for conducting activities, other than public relations or educational, to advocate for suretyship:

• Carolinas Surety Association
• Florida Surety Association
• Minnesota Surety Association
• Surety Association of Ohio

Carolinas Surety Association – The Carolinas Surety Association (CSA) participated in both Congressional Action Day as part of SFAA’s Annual Meeting and NASBP’s Legislative Fly-in to advocate for H.R. 3534, the Security in Bonding Act of 2012. The LSA also advocated for surety as a career by having several meetings with state universities to promote the CSA’s scholarship program for risk management and insurance students who want to pursue a career in the surety industry.

Florida Surety Association – In 2012, the Florida Surety Association’s (FSA) numerous activities included lobbying against onerous contract terms, fighting legislative efforts to eliminate bonds, and having several rating requirements revised appropriately. With the assistance of SFAA and FSA legislative counsel Richard Watson, the FSA successfully stopped the elimination of the $35,000 Florida Title Agent’s Bond and was able to convince bill sponsors to have language removed from legislation that would have restricted the requirement of bonds on service contracts under $500,000. The FSA sent a letter to the City of Doral, which put out an RFP on a design-build police headquarter facility that contained long-term warranties and some conflicting provisions related to those warranties. This resulted in clarified language.

Minnesota Surety Association – The Minnesota Surety Association (MSA) offered a lobbyist from the Minnesota Association of Townships alternatives to his push for a bill to raise bond thresholds and/or exclude certain types of work from bond requirements. MSA members also met with state legislators who authored bills for threshold modifications and explained the potential negative consequences of this legislation. A testimony to the MN Senate Local Government Committee informed committee members of the risks of modifying bond requirements and the value that surety bonds play in protecting taxpayer funds and ensuring the completion of public works. The MSA also received positive feedback on its presentation to the MN Public Risk Managers Association, where the MSA presented risk managers with information about the benefits of bonding and answered their questions about bond requirements, bond claims, and acceptable sureties.

Surety Association of Ohio – Members of the Surety Association of Ohio (SAO) have been working with Senator Seitz to explain the importance of surety underwriting procedures. These members have met with Senator Seitz on at least one open forum and have had various correspondences as well. The Senator is pushing state legislation that undermines the importance of subcontract bonding under CM contracts as well as the use of standard underwriting procedures for sub-standard contractors. He is proposing the idea of “deemed joint ventures” being eligible for bonding without going through the proper channels for setting up a proper joint venture. He wants the industry to provide bonds to deemed joint ventures even though an underlying written agreement is not in place between the two parties. The SAO members continue to work with Senator Seitz to help him understand why this method will not work and have proposed other options.