ASA Urges Senate EPW Committee to Consider the Water Infrastructure Subcontractor & Taxpayer Protection Act

ASA, along with the Surety & Fidelity Association of America (SFAA) and the National Association of Surety Bond Producers (NASBP), sent a letter to the Senate Environment and Public Works Committee Leadership respectfully requesting that they add S. 570, the Water Infrastructure Subcontractor & Taxpayer Protection Act, to the agenda of the next markup on legislation pending before the committee to help advance this critical, but simple, policy solution. This is especially important following the recent full committee hearing “Building on IIJA’s Successes: Identifying Opportunities to Strengthen Water Infrastructure Programs.”

Per the letter, “as the committee continues to help the country deliver meaningful infrastructure improvements, we must make certain adequate protections are applied to the construction of our nation’s water infrastructure. Sureties, by way of payment and performance bonds, are common practice on public works projects and are required at the federal level through the Miller Act and at the state level through the Little Miller Acts. Payment and performance bonds play a vital role in ensuring taxpayer resources are not unduly wasted, as a surety steps in to assume the risk in the case any aspect of a project fails to align with the original plan. They guarantee subcontractors, suppliers and workers on public works projects are compensated and projects are completed within budget and on time, even if the lead contractor encounters financial distress.”

Unfortunately, the required use of these protections is not consistently applied to newer forms of project deployment, such as public-private partnerships (P3s). This inconsistency puts taxpayer funds, as well as payments to subcontractors, small businesses, and workers, at risk. The Water Infrastructure Subcontractor and Taxpayer Protection Act, S. 570, aims to standardize and de-risk this process by ensuring water infrastructure projects financed by the WIFIA program utilize these security protections.