Associations Call on FHWA to Include Surety Bond Requirements for P3s

ASA joined The Surety & Fidelity Association of America and the National Association of Surety Bond Producers in calling on the Federal Highway Administration to include in its proposed rule related to the construction manager/general contractor method of contracting that surety bonds be provided on projects financed through public-private partnership agreements. The three associations recommended that “FHWA should follow the bonding requirements that have been a longtime feature of the U.S. Department of Transportation’s regulations on federal grants for state highway construction projects.” DOT’s rules currently provide that “[t]he federal agency awarding a grant may accept the state bonding policy applicable to the person or entity receiving the grant if the federal agency determines that policy adequately protects the federal agency’s interest.” The associations emphasized that“ the payment bond guarantees that covered subcontractors, suppliers and laborers on the job will get paid. Many subcontractors and suppliers on public works projects are small contractors that have fewer resources to absorb an event of non-payment.”

Published on September 3, 2015 by the American Subcontractors Association’s asatoday Vol. 17, No. 36 “The Weekly National News Bulletin for ASA Members Only”

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