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American Subcontractors Association - National (ASA)

ASA, the Surety & Fidelity Association of America, and the National Association of Surety Bond Producers Send a P3 Letter to the Senate Environment an


In a letter to the leadership of the Environment and Public Works Committee, ASA, along with the Surety & Fidelity Association of America and the National Association of Surety Bond Producers, thank them for unanimously advancing, S.2302, America’s Transportation Infrastructure Act of 2019. This bipartisan legislation, which makes significant and much-needed investments in our nation’s surface transportation infrastructure, is a critical step to ensuring transportation programs remain well funded and operational. Per the letter, “as this legislation moves through Congress, we respectfully request your support to amend USCS 602(c) to clarify that current payment and performance security requirements for federally funded infrastructure projects also apply to TIFIA financed infrastructure projects, including Public Private Partnerships (P3).” 

The rationale for this letter is that State and municipal transportation departments are increasingly relying on P3s to finance the construction and delivery of large-scale infrastructure projects. Because P3 arrangements were not contemplated when the TIFIA program was first enacted, TIFIA does not explicitly address bonding for P3 projects and inconsistent bonding requirements now exist across the states for P3s. In many instances, state and municipal laws require payment and performance security for P3s, but in some states, the law enabling P3 projects does not specifically address these requirements directly, leaving projects unprotected.

P3s do not comprehensively transfer the payment, performance, or political risk of a contractor default from the public to the private sector. Consistent bonding requirements for federally financed projects are vital to protect taxpayer dollars, ensure project completion, support economic growth, and protect local small business subcontractors in the event of a contractor default. Surety bonding is of utmost importance to protect taxpayers as well as the strength of the federal programs financing these projects.  

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