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ASA Supports Public-Private Partnership (P3) Water Infrastructure Projects

In the 117th Congress and now in the 118th Congress, ASA will continue to support public-private partnership (P3) water infrastructure projects.   At the very end of the 117th Congress, Reps. Lynch (D-MA) and Balderson (R-OH) introduced, H.R. 9665, which would apply payment and performance requirements for all construction projects receiving Water Infrastructure Finance Innovation Act (WIFIA) funding.  In most instances (95-99%), the states’ “Little Miller Acts” require bonding at 100% or in practice, states and localities are requiring bonding at 100% for traditionally procured projects, so state or local applicants can merely attest to the Environmental Protection Agency (EPA) that the project(s) will be bonded as required under the state’s “Little Miller Act” and provide the percentage of bonding.  Additionally, the legislation would provide a floor for security (bonding) at 50% of the construction costs, implementing a recognized industry standard minimum level of bonding, for security for large water projects to protect the federal interests in the prudent use of federal financing. This removes the burden from EPA to determine what would be an “appropriate” level of bonding. This would address the gaps existing in the bonding requirements for newer forms of project delivery, specifically P3s and possibly others. In those instances, the legislation contains a provision requiring state or local statutes or regulations for security requirements to be accepted by EPA so long as these requirements are at a minimum of 50% of the construction costs.  As this legislation matriculates through Congress, we will keep you posted on it.