Change aims to add flexibility in verifying veteran-owned small firms | President of Fla. construction firm admits to $2.5M fraud | Commentary: SBA bond-guarantee program can be invaluable for struggling contractors
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March 14, 2013
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Change aims to add flexibility in verifying veteran-owned small firms
The Department of Veterans Affairs plans to allow veteran-owned small businesses to make corrections to their applications as they seek verification to qualify for set-aside opportunities. Beginning May 1, businesses will be notified if there are problems with their applications and will have a five-day window in which to correct any issues. "The program is aimed at eliminating the large percentage of verification denials that are due to single points of failure that can be easily and quickly corrected," according to one official. American City Business Journals/Washington, D.C./FedBiz Daily blog (3/5)
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President of Fla. construction firm admits to $2.5M fraud
The owner of a Florida construction company has admitted to running a Ponzi scheme through which she obtained more than $2.5 million from investors. The woman promised her victims large returns on their investments, but the construction projects her company was supposedly pursuing were not real, authorities say. She could face a prison sentence of up to a decade. Orlando Sentinel (Fla.) (3/9)
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Commentary: SBA bond-guarantee program can be invaluable for struggling contractors
Idaho contractors haven't made the most of the Small Business Administration's Surety Bond Guarantee program, even though the initiative can be crucial for companies that are otherwise unable to obtain bonding, according to this article. The guarantee limits for the program recently were increased. Idaho Business Review (3/7)
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Surety chooses contractors, opens bids on Texas road projects
A new contractor has been chosen to finish a highway-widening project in Texas, and work could start again soon. The project stalled after the original contractor defaulted and filed for bankruptcy protection at the end of last year. In addition, the surety recently opened bids for other projects that were abandoned by the contractor that defaulted. San Antonio Express-News (3/6)
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Other News
Policy Update
Study cites misperceptions about federal bid protests
Bid protests are rarer than some critics say, and they have a generally positive impact on the government procurement process, according to a former leader of the Office of Federal Procurement Policy. Along with other advantages, the protest process can add accountability and transparency to the procurement system, he notes in a study. Government Executive (3/12)
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NASBP March 19 Virtual Seminar: "Unraveling the Knot of Trusts and Surety Indemnification"
Join us from 2 to 3 p.m. Eastern time Tuesday, March 19, for the NASBP Virtual Seminar "Unraveling the Knot of Trusts and Surety Indemnification." Presenters John Coyne, a vice president and regional underwriting officer for Travelers Bond and Financial Products, and Kimberly Bowden Czap, Esq., managing director and counsel for Travelers, will take the mystery out of the trust as a vehicle for construction-company ownership and assist surety professionals in identifying the key areas for effective surety indemnification. Trusts, once typically associated with large and complex organizations, are becoming more commonplace for construction contractors. While trust ownership presents several benefits to indemnitors, sureties have often been apprehensive concerning the adoption of a trust, particularly in regard to the surety's indemnification rights. Understanding why a trust is established and the parties empowered to obligate the trust are critical to obtaining the proper indemnity. In addition, Coyne and Czap will address the increasing use of trusts and the challenges posed to sureties, identifying and evaluating risks associated with the most common forms of trusts, and setting forth the steps to properly underwrite and secure the indemnity obligations of the trust. Consider inviting your clients to join you at your office for this Virtual Seminar. Registration for each Virtual Seminar is $69 per site. Register now.
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March 27 ConsensusDocs webinar: Comparing key provisions in AIA and ConsensusDocs contracts
Be sure to participate in the ConsensusDocs webinar "Key Contracting Issues for Owner & Design Professional Agreements -- Comparing Key Provisions in American Institute of Architects & ConsensusDocs Contracts," from 2 to 3 p.m. Eastern time Wednesday, March 27. Three prominent industry attorneys will analyze key provisions for every Owner and Design Professional agreement. Registration is required. Topics include project date, copyrights, indemnification, consultants and dispute resolution. Learn more and register for this webinar. Enter the NASBP code to receive the discount: NASBP_Web. Cost per site is $49 for the NASBP membership, free for ConsensusDocs subscribers and $89 for the general public. NASBP is an endorsing organization of the ConsensusDocs coalition, an unprecedented effort by 38 industry organizations to identify industry best practices and to incorporate such practices in a new generation of consensus industry standard form documents. Learn more about NASBP's involvement with ConsensusDocs.
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Market Trends
Are state bond requirements regarding prepaid cards sufficient?
Reloadable prepaid cards, unlike checking accounts, don't have to be protected by federal deposit insurance, according to a report. Some companies say the funds are protected anyway because they are placed in federally insured bank accounts. At least one company's cards, however, operate under "money transmitter" laws, which differ from state to state. In general, such laws stipulate that issuing companies must obtain surety bonds and have licenses. The New York Times (tiered subscription model)/Bucks blog (3/12)
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Editor's Note
Your SmartBrief has a new look
Noticed a change? NASBP SmartBrief has the same valuable content but with a reworked design to make reading and sharing stories easier, especially on mobile devices. Have feedback on the change? Send it our way!
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People may say I can't sing, but no one can ever say I didn't sing."
-- Florence Foster Jenkins,
American amateur operatic soprano
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Founded in 1942, NASBP is the association of and resource for surety bond producers and allied professionals. NASBP producers specialize in providing surety bonds for construction contracts and other purposes to companies and individuals needing the assurance offered by surety bonds.
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