ASA Strongly Supports the Promoting Infrastructure by Protecting Our Subcontractors and Taxpayers Act of 2021

On Tuesday, March 9, 2021 Sens. Van Hollen (D-MD) and Rounds (R-SD) and Reps. Lynch (D-MA) and Balderson (R-OH) reintroduced the Promoting Infrastructure by Protecting Our Subcontractors and Taxpayers Act of 2021.  This bipartisan, bicameral legislation would direct the U.S. Department of Transportation (DOT) to ensure public-private partnership (P3) projects using Transportation Infrastructure Finance Innovation Act (TIFIA) financing have appropriate payment and performance security and are sound federal investments by requiring a surety bond.

Unfortunately, P3 projects sometimes do not maintain the same level of protection that have been required on public infrastructure projects for over a hundred years through federal and state Miller Acts. Without these protections, in the event of a contractor default, the project is halted, and can be terminated, leaving subcontractors and workers without pay. Additionally, states and taxpayers then are forced to absorb additional costs of rebidding the project.

Payment and performance protections, through the use of surety bonds, provide monetary compensation in case a contractor fails to perform the acts as promised. These bonds play a vital role in ensuring contractors in financial distress avoid bankruptcy, allowing subcontractors and workers of public works projects to receive compensation and allowing the project to be delivered within budget and on time.  This bipartisan, bicameral policy seeks to provide added protection for our nation’s workers, subcontractors, and small businesses as they look to solve our country’s infrastructure needs by ensuring essential payment and performance security protections are in place for all forms of project procurement where federal funds are used.

Finally, I am pleased to highlight ASA’s Government Relations Committee Co-Chairs’ comments on this important legislation:

“The American Subcontractors Association (ASA) proudly supports this important bipartisan legislation because our contractor members witness firsthand the importance of financial securities such as performance and payment bonds on construction projects. These bonds assure that a contractor is qualified to perform the obligations in the award and serve as protection for the public agencies in case the contractor fails to meet their obligations under the contract,” said Gloria Hale and Courtney Little, ASA Government Relations Committee Chairs.