On behalf of the National Association of Surety Bond Producers (NASBP), a national trade association whose membership includes firms employing licensed surety bond producers placing bid, performance, and payment bonds throughout the United States and in Maryland, I am pleased to submit the following recommendations for the Public-Private Partnership Program. The proposed emergency regulations to initiate the state’s Public-Private Partnership Program appear to be silent on statutory bonding requirements, a critical component to protect the state taxpayers and the Maryland small businesses that rely on the payment bond for protection. Just recently, the Maryland General Assembly approved and Governor O’Malley signed into law H.B. 560, recognizing the importance of requiring bonds on public-private partnerships (P3s) by specifically stating in Subtitle 4 of the Act as follows:
(12) Requirements for the private entity to provide performance and payment security [emphasis added] in a form and in an amount determined by the responsible public entity, except that requirements for the payment security for construction contracts shall be in accordance with Title 17, Subtitle 1 of this article, including the requirement that payment security shall be established on the value of the construction elements of the public-private partnership agreement and not on the total value of the public-private partnership agreement.
Waivers of Consequential Damages