Strong Opposition to HB 1702/1703

On behalf of the National Association of Surety Bond Producers (NASBP) a national trade association representing firms employing surety bond producers, including licensed resident and non-resident agents placing contract surety bonds in the Commonwealth of Massachusetts, we strongly oppose H.1702/1703, legislation that amends paragraph two of Section 8(a) of Chapter 149A of the Massachusetts General Laws by allowing construction managers at risk (CM@R) to use a subcontractor default insurance (SDI) policy in lieu of the otherwise required performance and payment bonds from trade contractors. In addition, NASBP opposes H.1702/1703 because, unlike performance and payment bonds, which benefit both the owner and the trade contractors, SDI does not benefit either the owner or unpaid trade contractors. Rather it only benefits the CM@R, which seeks through SDI to retain more of its fee.

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