New Legislation Introduced, FAR Council Petition Sent
Representative Richard Hanna (R-N.Y.) recently introduced legislation that would help prevent individual surety fraud in the federal construction bonding marketplace. , would require individual sureties to use real, liquid assets placed in escrow to back their bonds.
In recent years, there have been numerous instances in which contracting officers have accepted individual sureties’ bonds backed by assets that subsequently turned out to be illusory, such as coal mine waste and over-valued personal homes. As a result, when subcontractors sought payment through these bonds, there was no asset to collect payment and thus no real payment protection on the bond. This legislation would help end that fraudulent individual surety practice and provide true payment protection.
In conjunction with this legislative effort, ÎÚÑ»´«Ã½ and other industry groups the Federal Acquisition Regulation (FAR) Council to make regulatory reforms that would similarly help prevent individual surety fraud. ÎÚÑ»´«Ã½ on this issue, among other procurement reform issues, at a House Small Business Committee hearing. ÎÚÑ»´«Ã½ will continue to work with Congress and regulators to make the changes necessary to help prevent fraud and maintain a level playing field in the federal construction bond market.
For more information, please contact Jimmy Christianson at christiansonj@agc.orgor (703) 837-5325.