Md. county says firm's surety bonds are fraudulent, issues stop-work order | Ohio county is using $3.5M surety payout to complete sewer project | City attorney in Ariz. wants to file suit to obtain bond payout
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April 4, 2013
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Industry News
Md. county says firm's surety bonds are fraudulent, issues stop-work order
A contractor that won a museum-construction contract in September was issued a stop-work order in December by St. Mary's County, Md., after local officials said the company's surety bonds were fraudulent. The contractor was ordered recently to post acceptable replacement bonds or provide an irrevocable letter of credit. If the issue is not resolved, "the county would review the original submissions as an option, or could possibly re-bid," according to an official. Southern Maryland Newspapers Online (3/29)
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Ohio county is using $3.5M surety payout to complete sewer project
A sewer project in Gallia County, Ohio, is moving forward, and county officials want construction and cleanup to be finished by the end of summer. The county received a $3.5 million payout from the original contractor's bonding company in October. A new contractor was chosen in November. Gallipolis Daily Tribune (Ohio) (4/3)
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City attorney in Ariz. wants to file suit to obtain bond payout
A city attorney for Flagstaff, Ariz., is advocating for the city to file a lawsuit to access $1.4 million tied to a performance bond for a troubled mixed-use development project. The bonding company says the bond isn't valid now that a new business has taken over the development, according to city officials, although a company spokesman declined to comment on the matter. The Arizona Daily Sun (Flagstaff) (4/2)
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Case offers insight into recovering attorneys' fees on Miller Act projects
A recent court case in which a supplier filed a lawsuit against a surety company and a contractor sheds light on the recovery of attorneys' fees under the Miller Act. The reasoning used in this case shows that "attorneys' fees might be recovered in Miller Act cases, but the right to recover them is restricted by the federal rule that allows recovery of attorneys' fees only when those fees are allowed by statute, contract, or an exception to the rule," according to this article. Lexology.com (free registration) (3/27)
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Policy Update
City leaders in Md. debate summer-event bond requirements
Officials of Ocean City, Md., recently discussed whether performance bonds should be required for a sporting event this summer. The city has already established a positive relationship with the group that is running the event, according to one city official. However, the official also said that "if we see based on the level of activity this summer that a performance bond may be a good idea, certainly we can revisit that." The Dispatch (Ocean City, Md.) (3/29)
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NASBP News
NASBP April 9 Virtual Seminar: "How Well Do You Really Know Your Contractor?"
Mark your calendars for 2 p.m. Eastern time Tuesday, April 9, for an engaging hour with Doug Pruitt, chairman of Sundt Construction and co-author of the book "Level Headed -- Inside the Walls of One of the Greatest Turnaround Stories of the 21st Century." Pruitt will share his compelling story of how a well-respected construction firm could be nearly broke and not know it. In addition to describing how he identified weaknesses and made tough decisions about Sundt that helped bring the company back to the thriving, successful business it is today, Pruitt will explain ways surety professionals can assess their contractor clients' exposures and the importance of encouraging clients to maintain focus and to plan for their companies' future. Susan Hecker, NASBP third vice president and area executive vice president for Gallagher Construction Services in San Francisco, said Pruitt's story offers surety professionals valuable insight into their construction clients: "I lived this story with Doug. Members of the surety industry stepped up and played their own significant part in the story. The lessons learned are applicable to any business and provide a road map to success for both executives and young professionals." Pruitt has won numerous awards, including the Phoenix Valley's Most Admired CEOs Lifetime Achievement Award in 2011 and an honorable mention in the list of Top 10 Most Influential People in Arizona in the past 100 years. Consider inviting your clients to join you at your office for this Virtual Seminar. Register now.
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April 22 ConsensusDocs webinar: "Federal Contracting -- What You Absolutely Need To Know"
Join the ConsensusDocs webinar "Federal Contracting: What You Absolutely Need to Know," from 2 to 3:30 p.m. Eastern time Monday, April 22. Tom Kelleher, Esq., of Smith Currie & Hancock in Atlanta and Lori Lang, Esq., of Peckar & Abramson in Washington, D.C., will describe the key requirements for federal contracting, including how contractors can avoid false claims violations and the important compliance processes and programs. These expert speakers will address requirements for small-business contracting, ethics compliance, Davis-Bacon and Miller Act claims, and will review the 2013 revisions to the ConsensusDocs 752 standard federal subcontract. Learn more and register for this webinar. Enter the NASBP code to receive the discount: NASBP_Web. Cost per site is $99 for the NASBP membership, free for ConsensusDocs subscribers and $129 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
Industry courses help Texas contractors obtain bonding, boost credit
Construction contractors in Bexar County, Texas, are benefiting from courses designed to help them build their businesses. For example, one contractor recently participated in a program that helped his company secure bonding that allowed him to bid on a job for the Texas Department of Transportation. Another company was able to boost its line of credit dramatically after the CEO took courses on bonding. San Antonio Express-News (3/27)
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SmartQuote
Unless I accept my faults, I will most certainly doubt my virtues."
-- Hugh Prather,
American writer, minister and counselor
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About NASBP
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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