P3 Legislation Considered in D.C.
July 21, 2016
A proposed Washington, DC public-private partnership (P3) rule seeks to lay groundwork for procurement that includes requirements for bonds or other securities.
The P3 rule would require that the private entity for each project “maintain or cause to be maintained performance and payment bonds, letters of credit or other acceptable forms of security in compliance with Title VII of the Procurement Practices Reform Act of 2010.” These procurement practices, in turn, require bid security for competitive proposals when the price is estimated to exceed $100,000. Payment bonds, according to the Reform Act, should be worth 100% of the contract price that does not include the cost of operation, maintenance and finance. Further, the chief procurement officer can reduce the amount of performance and payment bonds to 50%. If passed, it is expected to provide suppliers greater assurance of collecting what is owed in the case of late payment or nonpayment.
“DC‘s new public-private partnership proposed rule hopefully being passed in the near future would be such a great benefit to credit professionals shipping on these types of projects,” said Connie Baker, CBA, director of operations for NACM’s Secured Transactions Services (STS).