Kelly, Cramer, Bost, Pappas Reintroduce Bill to Ensure Federally Funded Water Projects are Protected from Default and Completed on Time
Today, Senators Mark Kelly (D-AZ) and Kevin Cramer (R-ND) reintroduced the Water Infrastructure Subcontractor and Taxpayer Protection Act, bipartisan legislation to keep federal projects on time and protect local communities and workers. By requiring any primary contractor working on federally financed water infrastructure projects to hold a surety bond, local sponsors and sub-contractors will be compensated if the contractor defaults before the project is complete. Representatives Mike Bost (R-IL-12) and Chris Pappas (D-NH-01) are leading the House companion bill.
“Local governments and workers should not be left holding the bag when contractors don’t deliver. That’s why Senator Cramer and I want all water projects financed by taxpayer dollars to have the necessary protections to keep them on time, helping to improve water security in Arizona communities,” said Senator Kelly.
“North Dakotans know just how important public-private partnerships are to large scale infrastructure projects. They can bolster and protect local communities, but taxpayers should be confident their money will not be lost,” said Senator Cramer. “We must work to close existing loopholes in federal law to protect not just American taxpayers, but local small business contractors and workers who make these projects possible.”
“New Hampshire taxpayers who are already confronting the rising cost of housing shouldn’t be left high and dry if any partner in a project fails to deliver on their end of the bargain,” said Congressman Pappas. “I’m glad to partner with Congressman Bost and Senators Kelly and Cramer to introduce legislation that would close gaps in water infrastructure bonding requirements, improve outcomes for our communities without increasing costs, and ensure our towns and cities don’t have to bear the cost of default.”
“Water infrastructure projects are critical to our communities, but taxpayers shouldn’t be left on the hook when contractors fail to deliver,” said Congressman Bost. “That’s why I joined Rep. Pappas and Senators Kelly and Cramer to introduce the Water Infrastructure Subcontractor and Taxpayer Protection Act, which strengthens bonding requirements for federally financed water projects. This bill will help ensure projects are completed as promised while protecting taxpayers and local governments from costly defaults.”
“It is essential WIFIA be modernized to include the same payment and performance requirements that protect all other federally funded infrastructure projects,” said Ryan Work, President and CEO of the Surety & Fidelity Association of America (SFAA). “Bonding all projects receiving WIFIA assistance is a commonsense solution to better preserve taxpayer dollars, ensure project completion, protect workers and promote economic growth.”
“Water infrastructure projects are critically important to the welfare of our nation and should be performed by qualified construction firms without undue risk to taxpayer funds and the businesses performing as subcontractors and suppliers,” remarked Mark McCallum, Chief Executive Officer of the National Association of Surety Bond Producers (NASBP). “While the means to fund or finance water infrastructure projects, such as through the WIFIA Program, has evolved over time, the need to protect taxpayer dollars and the many downstream businesses supplying labor and materials remains. NASBP applauds Senators Kelly and Cramer for introducing this vital legislation and looks forward to working with them to advance it in Congress.”
“With the recent increase in federal funding to enhance America’s infrastructure, amending current law to require surety bonds for projects financed by WIFIA in the same manner required on other types of public infrastructure projects just makes sense,” said Jim Gaffney, Chair of the Mechanical Contractors Association of America (MCAA) Government Affairs Committee. “More importantly, these bonds help protect our members and other subcontractors working on local WIFIA-financed projects, reducing their exposure to unnecessary risks. The MCAA is grateful to Sens. Kelly and Cramer, and Reps. Bost and Pappas, for swiftly reintroducing the ‘Water Infrastructure Subcontractor and Taxpayer Protection Act,’ and for their continued leadership on this important legislation.”
“The American Subcontractors Association (ASA) proudly supports this important bipartisan legislation because our contractor members witness firsthand the importance of financial securities such as performance and payment bonds on construction projects. These bonds assure that a contractor is qualified to perform the obligations in the award and serve as protection for the public agencies in case the contractor fails to meet their obligations under the contract,” said Gloria Hale and Courtney Little, ASA Government Relations Committee Chairs.
“Minority-owned contracting businesses often look to serve as subcontractors on large public construction projects. As they take capital risks to deliver much needed infrastructure improvements, they deserve continued protection,” said Wendell Stemley, President of the National Association of Minority Contractors. “The bipartisan Water Infrastructure Subcontractor and Taxpayer Protection Act ensures common payment and performance protections are in place for these businesses, including women and minority owned business enterprises (WMBEs), and disadvantaged business enterprise (DBE) sub-contractors & suppliers to safeguard our nation’s smallest of thesmall business construction community.”
The following organizations support the Water Infrastructure Subcontractor and Taxpayer Protection Act: Surety & Fidelity Association of America (SFAA), National Association of Surety Bond Producers (NASBP), Mechanical Contractors Association of America (MCAA) Government Affairs Committee, American Subcontractors Association (ASA), National Association of Minority Contractors.
Background:
The EPA’s WIFIA program provides low-interest financing for large water projects. WIFIA projects, often funded by public-private partnerships, do not require the primary contractor to hold a surety bond. Projects without surety bonds are ten times more likely to default, which typically results in significantly higher costs and delays. That’s why primary contractors on any transportation and water infrastructure project receiving direct federal funding are required to hold a surety bond. This bill would close that loophole for federally financed water infrastructure projects financed through new delivery models, like public-private partnerships.
Click here to read the bill text.
