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What's New: Public-Private Partnerships (P3s)

SFAA’s Comments to VDOT Urges Bonding as a Best Practice for P3s

Tuesday, August 26, 2014  
SFAA submitted comments to the Virginia Office of Transportation Public-Private Partnerships (OTP3), in response to its request for comments to revise and update its existing guidelines for transportation projects let as P3s, urging that bonding be required on P3s.

Under the Virginia Department of Transportation’s (VDOT) P3 law for transportation projects under Virginia Statutes 32.2-1808, the comprehensive agreement shall, as appropriate, provide for the delivery of performance and payment bonds in connection with the development and/or operation of a qualifying transportation project in the forms and amount satisfactory to the responsible public contracting entity. In our letter, SFAA notes that if any P3 transportation project under 32.2-1808 were let under traditional methods of project delivery, the Virginia Little Miller Act would require bonding on such projects in excess of $350,000 in an amount equal to the contract price. Since the end result of any P3 transportation project is a public works project, SFAA urges the OTP3 to revise the guidelines to provide that the best practice for the public contracting entity under 32.2-1808 is to require the design and construction phases of P3 projects to be bonded, as provided under the Little Miller Act.

SFAA also notes that sureties are committed to help small, emerging and minority contractors obtain bonding. Through our Model Contractor Development Program (MCDP)® we have worked on a local basis wherever it has been needed. Through SFAA’s partnership with the U.S. Department of Transportation (DOT) to implement the Bonding Education Program (BEP), we have implemented our MCDP® nationally. In just the last few years, over half a billion dollars in bonding capacity has been provided through the MCDP® and BEP. Bonding not only is a tool that protects taxpayer dollars and assures payment to covered subcontractors and suppliers for work performed on public works projects, but it also is an economic empowerment tool for small, emerging, and minority contractors.

Individual SFAA members, the Virginia Surety Association, and the American Subcontractors Association also submitted comments on the value of bonding and the importance of Virginia requiring bonds on P3 projects.


View PDF version (or visit Government Relations / Public-Private-Partnerships (P3s) - Public)

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