VA Bonding Threshold Increase Comments

As trade associations representing a significant portion of the construction firms and surety bond producers conducting business in Virginia, we are very concerned about the substantial, negative impact that House Bill Number 1951 will engender. H.B. 1951 amends §§ 2.2-4336 and 2.2-4337 of the Code of Virginia, relating to the Virginia Public Procurement Act; bid, performance, and payment bonds, by substantially increasing the minimum contract amount required for bid, performance, or payment bonds. Currently the minimum contract amounts are $100,000 for non-transportation-related construction contracts and $250,000 for transportation-related projects partially or wholly funded by the Commonwealth. If Virginia’s bonding threshold is increased, it would be among the highest in the nation. In fact, as contemplated in H.B. 1951 as introduced, the Virginia statute would become almost ten times higher than the current bonding threshold of the Federal Government. Even a $500,000 threshold, which is being considered in a substitute draft bill, is too high, and would still place Virginia as having the highest bond threshold in the nation.

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