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The Bonding Perspective on H.R.1740

Last week, ASA advocated on behalf of H.R.1740, which would address payment and performance bonds regarding Water Infrastructure Financing Authority Act (WIFIA) financed public-private partnerships.  After those meetings, the National Association of Surety Bond Producers (NASBP) offered that they had a study conducted on behalf of the Surety & Fidelity Association of America (SFAA) prepared by Ernst & Young showcasing the economic value of surety bonds, and they submitted a joint comment letter to the United States Army Corps of Engineers (USACE) on behalf of NASBP/SFAA.  The Corps’ direct response to their letter was “for other prospective WIFIA applicants which are not already subject to State and local payment and performance bond requirements, the Corps will carefully evaluate an applicant's proposed procurement methodology, and negotiate appropriate payment and performance bond requirements as necessary to ensure project completion and/or mitigate credit risk, while also meeting the program's mission to stimulate investment in important regionally and nationally significant non-Federal dam safety projects.”  This is a positive step forward and we will keep you updated as this important legislation advances within Congress.