Developer lacked bond for Pa. office project that remains unfinished | Editorial: Individual surety bond assets require careful review | Fla. county requires $3M bond for trash-collection contract
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November 8, 2012
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Developer lacked bond for Pa. office project that remains unfinished
Contractors recently appeared in federal court over money they say they are owed by a developer who defaulted on a $28 million project to build an office hub in Harrisburg, Pa. Grant regulations require that the developer be bonded, according to this article. One contractor said the city's previous administration knew the developer did not have a performance bond for the project. The contractor also said the developer probably would have been unable to secure a bond. The developer has pleaded guilty to felony charges including money laundering and misusing government funds and could receive as much as 30 years in prison. WHP-TV (Harrisburg, Pa.) (10/31)
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Editorial: Individual surety bond assets require careful review
A bill supported by NASBP and passed by the U.S. House of Representatives would require individual sureties to back their guarantees with Treasury bills or similar assets. The bill, which has yet to pass the Senate, aims to address problems that can arise when individual sureties use assets that are worthless or of questionable value. This Engineering News-Record editorial says that "we agree with [NASBP CEO Mark] McCallum and NASBP that assets such as real estate and coal aren't appropriate and that federal contracting officers are in no position to verify the authenticity of pledged assets." Engineering News-Record (10/31)
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Fla. county requires $3M bond for trash-collection contract
Officials in Hillsborough County, Fla., are attempting to save money by seeking competitive bids from companies to provide garbage-collection services. Any company interested in collecting trash for the county will have to secure a $300,000 bid bond and a $3 million performance bond. The Observer Newspapers (New Smyrna Beach, Fla.) (11/1)
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Ala. contractor is charged with attempting to defraud SBA, DOD
An Alabama contractor has been indicted on charges of providing forged performance and payment bonds and submitting fraudulent tax returns to obtain government contracts intended for disadvantaged small businesses. The contractor faces 14 counts, including wire fraud and money laundering. "This defendant's fraud took advantage of both the Small Business Administration and the U.S. Department of Defense," a U.S. attorney said. The Huntsville Times (Ala.) (10/30)
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Policy Update
Court: Ill. construction lien payments to subcontractor are trust funds
A case in Illinois involving a trustee's attempt to recover payments made to a subcontractor hinged on the state's Mechanics Lien Act and questions of whether the funds in question were trust funds. Ultimately, the court decided that the payments were trust funds under state law. Lexology.com (free registration) (10/30)
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NASBP News
NASBP Virtual Seminar: Preparing for the Future Transfer of Your Business -- new date Nov. 13
Join us at 2 p.m. Eastern time Tuesday for the NASBP Virtual Seminar Preparing for the Future Transfer of Your Business. NASBP originally scheduled this Virtual Seminar for the last week of October; however, because of the hurricane in the Northeast, NASBP rescheduled it for next week. Whether you transfer your business to internal owners already part of your agency or decide on an external sale, you need to plan and address specific issues for a successful transfer. Presenters Jonathan Dick of Jon Dick Consulting and Kevin Doyle, a partner of the CPA firm Lanigan, Ryan, Malcolm & Doyle, will provide unique information about succession management and ownership transfer of an agency. A dialogue between these business consultants will address topics including determining the income that current owners need to retire well, assessing the agency's worth, and evaluating current employees' or family members' abilities and interest in managing and expanding the agency. In addition, the presenters will provide guidance in establishing processes for formal sales, new business generation, client transfer and management of the largest books of business, as well as selecting the appropriate owner-transfer option. Registration for each Virtual Seminar is $69 per site. Visit NASBP.org to register now.
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Pay one fee now for all 2013 NASBP Virtual Seminars and save $500 -- purchase by Dec. 21
Help your staff prepare for what they will face in 2013 by registering your company for the 2013 NASBP Virtual Seminars in advance for a discounted price of $995, a savings of $500. The 2013 NASBP Virtual Seminars will address many issues that surety professionals should understand to be a success in 2013. With an average of two live telephone presentations a month, this subscription offers a cost-effective and time-saving way to help keep staff and customers abreast of the industry's current issues, run your business profitably, and improve your and your staff's professional skills. Virtual Seminar topics and presenters are identified and coached by members of the Virtual Seminar Editorial Board. As part of this subscription package, you'll also have recordings of each Virtual Seminar e-mailed directly to you soon after they've occurred, including seminars you were unable to attend. Instead of buying each NASBP Virtual Seminar individually, buy a year's worth at this discounted price of $995. To receive this discount, however, purchase of the NASBP Virtual Seminar Subscription Series must be completed by Dec. 21. To buy the 2013 NASBP Virtual Seminar Subscription Series now, visit NASBP.org. For more information about this subscription, go to NASBP.org or contact Cathrine Nelson at cnelson@nasbp.org. Information about upcoming 2012 Virtual Seminars is available at NASBP.org.
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Market Trends
Contractor: Veterans set-aside program needs more enforcement
A contractor says that he has, on multiple occasions, been outbid by companies that he alleges have fraudulently tried to take advantage of a contracting program designed to benefit firms owned by service-disabled veterans. "It would be a disgrace if this valuable program stopped being available to the real veterans, due to fraud," the man's lawyer said. The man thinks that he was most recently outbid by such a company last month. That company has denied the allegation. Connecticut Law Tribune (11/2)
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SmartQuote
People always call it luck when you've acted more sensibly than they have.
Anne Tyler,
American novelist
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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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National Association of Surety Bond Producers
1140 19th Street, NW, Suite 800
Washington, DC 20036

Phone: (202) 686-3700
Fax: (202) 686-3656

info@nasbp.org
www.nasbp.org
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