Parrot Surety on the Hill!
Last week, Nicole Campbell and Adam Milliren of Parrot Surety Services teamed up with a colleague from CNA Surety, the SFAA, and the NASBP to meet with the offices of Senators and Representatives from Tennessee and South Carolina. During our time together, we advocated for protecting taxpayer dollars and enabling small contractors to participate in reverse auction processes for infrastructure investments funded through the recently passed IIJA - Infrastructure Investment and Jobs Act.
The conversations requested that parity be made between TIFIA, WIFIA, and Broadband performance and payment bonding requirements. Currently, only 18-20 states require surety performance and payment bonds for projects at the state level that receive federal loan and grant monies. A 97-0 vote passed a TIFIA amendment in Senate on August 4, 2021, that required all infrastructure being funded through the act, including P-3s, to require performance and payment bonds, guaranteeing the contract completion and the payment of suppliers and subcontractors.
The amendment that Senate passed for TIFIA has NOT been applied to WIFIA, and surety bonds are NOT currently an available type of security for broadband infrastructure projects. Our ask is two parts:
Just like TIFIA requires all heavy highway and other transportation infrastructure to be bonded, it is critical to ensure all water infrastructure under WIFIA, and broadband infrastructure funded under the IIJA will also be bonded. Any infrastructure financed with public dollars should require a surety bond to guarantee the completion at the agreed-upon timeframe and price and protect subs and suppliers.
We also request that surety bonds be approved as an acceptable security option for broadband infrastructure in addition to letters of credit. Doing so opens the opportunity for bidding to small, disadvantaged businesses by increasing working capital, allowing them to bid on projects they otherwise wouldn't have been able to or more significant portions of broadband infrastructure improvements. Additionally, the authorization of surety bonds as an alternative security increases bidding competition, allowing the IIJA dollars to go further while improving the bidding ecosystem.
The above chart outlines the importance of allowing a surety bond as a security anytime an ILOC is an acceptable security. The ILOC Product promotes inequality in the bid space by making it likely that only large/prime contractors will bid.