Apr 30 2014
Chairman Goodlatte: “The Security in Bonding Act is a straightforward measure that will help the federal government, subcontractors, and the American taxpayer.
“The federal government requires prospective bidders for federal construction projects to support their bid with a variety of bonds. These bonds guarantee payment to the federal government and to the bidders’ subcontractors should the bidder fail to perform all of its obligations.
“Current law allows prospective bidders to use individual sureties to obtain the bonds guaranteeing their performance. The law also permits individual sureties to support their bond with illiquid and risky collateral.
“As a result, there have been repeated instances where the federal government and subcontractors turn to individual sureties for a recovery only to find that the collateral simply does not exist.
“The Security in Bonding Act addresses this problem by requiring individual sureties to provide low-risk collateral to support their bonds.
“American taxpayers deserve a government that acts carefully and with fiscal responsibility when it spends their money on construction projects. Additionally, subcontractors, which are often small businesses, should be protected from these losses so they can continue to drive our economy.”