The Surety and Fidelity Association of America (SFAA)
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The Surety and Fidelity Association of America (SFAA) BONDING ASSISTANCE FOR SMALL AND MINORITY CONTRACTORS “New Opportunities in the Gulf: Creating Business to Business Linkages” Forum sponsored by U.S. Department of Commerce, MBDA Detroit, MI December 21, 2011. Background.

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Background

The Surety and Fidelity Association of America (SFAA)BONDING ASSISTANCE FOR SMALL AND MINORITY CONTRACTORS“New Opportunities in the Gulf: Creating Business to Business Linkages” Forumsponsored byU.S. Department of Commerce, MBDADetroit, MIDecember 21, 2011


Background
Background

  • Prior efforts of SAA, NASBP and NAMC

  • Current surety bonding environment

  • Proactive vs. Reactive

  • SAA Support of Contractor Development Initiatives


Sfaa and mbda memorandum of understanding mou
SFAA and MBDAMEMORANDUM OF UNDERSTANDING (MOU)

The objective of the MOU is for SFAA to share its resources (both educational and referral sources) with MBDA for the benefit of minority-owned firms to enhance their access to bonding and/or to educate them on how to become bondable or increase their bonding capacity.


What is sfaa
What is SFAA

  • SFAA is a voluntary, non-profit trade association that performs a leadership role in promoting and preserving the use of fidelity and surety bonds to protect public and private interests

  • Founded in 1908, SFAA has grown to over 650 surety companies, including a number of foreign affiliates

  • SFAA members are insurance and reinsurance companies that specialize in fidelity and surety bonding

  • Surety companies are those companies that underwrite bonds – i.e., they take financial risk


Sfaa services
SFAA Services

  • Provides a forum for discussion of problems common to the industry

  • Offers educational sessions on topics relevant to the surety and fidelity industries

  • Establishes positions and policy on fidelity and surety issues

  • Represents the position of its members to government agencies, legislatures and other trade associations

  • Provides outreach, program development, technical assistance and advocacy for the surety, fidelity and construction industries


Saa outreach activities
SAA Outreach Activities

  • Outreach to public officials, trade associations and professional organizations

  • Assistance in informing and mobilizing minority and women contractor community around surety bond issues and availability

  • Work with local surety associations (LSAs) and other organizations and jurisdictions in planning and implementing contractor development programs


Barriers to emerging contractors entry and growth
Barriers to Emerging Contractors Entry and Growth

  • Contracting Opportunity

  • Information and Management Expertise

  • Trained and Reliable Workforce

  • Capability and Capacity

  • Performance Issues and Dispute Resolution

  • Bonding and Financing


How contractors have addressed barriers to bonding
How Contractors Have Addressed Barriers to Bonding

  • Only bidding work where bonding is not required

  • Bidding under prime contractor’s bond

  • Advocating for bond waivers

  • Advocating for alternative insurance/guarantee products

  • Obtaining First Bond or Increasing Bonding Capacity


Why minority and women contractors are an emerging market for surety bonding
Why Minority and Women Contractors are an Emerging Market for Surety Bonding

  • Demographic imperative

  • Customer requirements

  • Increasingly cost-effective

  • Excellent pool of quality minority and women contractors

  • Historically under-serviced by surety and financial industries


Resources
Resources for Surety

  • DOT Bonding Support Program

  • SBA Surety Guarantee Program

  • State and Local Programs

  • Project-Specific Surety Support Programs

  • SFAA Model Contractor Development Program


Program objectives
Program Objectives for Surety

  • Educating small and disadvantaged contractors about surety bonds and assisting them in becoming bondable

  • Identifying resources available to small and disadvantaged contractors in obtaining their first bond, including the SBA Bond Guarantee Program, as well as similar state and local programs in their area

  • Providing assistance and referrals to small and disadvantaged contractors in obtaining appropriate accounting, project management and financing expertise

  • Assisting small and disadvantaged bondable contractors in increasing their bonding capacity


Background

SFAA Model Contractor Development Program Seeks to Improve Bondability through Assisting Contractors in Better Addressing the 3 Cs – Elements of Surety Bonding Prequalification

  • Capital

    • Financial Strength

  • Capacity

    • Ability to Perform

  • Character

    • References and Reputation


Reaching out to the contractor community
Reaching Out to the Contractor Community Bondability through Assisting Contractors in Better Addressing the 3 Cs – Elements of Surety Bonding Prequalification

  • Involvement in Local Contractor Organizations

  • Information Dissemination, including Utilization of Websites


Contractor development program activities
Contractor Development Program Activities Bondability through Assisting Contractors in Better Addressing the 3 Cs – Elements of Surety Bonding Prequalification

  • Networking

    • Promoting local surety representation in small, minority and women business organizations

    • Sponsoring regular networking sessions


Contractor development program activities cont d
Contractor Development Program Activities Bondability through Assisting Contractors in Better Addressing the 3 Cs – Elements of Surety Bonding Prequalification (cont’d)

  • Workshops and Seminars

    • Surety 101: Bonding for New and Emerging Contractors (SAA)

    • Construction Accounting for Contractors (CFMA)

    • Business and Project Management for New and Emerging Contractors (ABC)

    • “Why Contractors Fail” – Pitfalls to Avoid and Ways to Avoid Them (SAA)


Contractor development program activities cont d1
Contractor Development Program Activities Bondability through Assisting Contractors in Better Addressing the 3 Cs – Elements of Surety Bonding Prequalification (cont’d)

  • Resource Identification and Referral– Establishing a Resource Clearinghouse

    • Federal, state and local bonding assistance programs

    • Financing, training and technical assistance support (project management, job costing, legal assistance, finance and accounting)

    • Linkages with potential mentors


Contractor development program activities cont d2
Contractor Development Program Activities Bondability through Assisting Contractors in Better Addressing the 3 Cs – Elements of Surety Bonding Prequalification (cont’d)

  • Assistance in the Bonding Process

    • Diagnosis – Identification of Needs

    • Prescription – Technical Assistance and Referral

    • Monitoring and Reporting

    • Bonding/Financing Applications


Contractor development program activities cont d3
Contractor Development Program Activities Bondability through Assisting Contractors in Better Addressing the 3 Cs – Elements of Surety Bonding Prequalification (cont’d)

  • Advocacy and Policy Development

    • Supporting legislation that enhances bonding to small, minority and women contractors

    • Technical input to lawmakers and jurisdictions related to surety issues and programs

    • Tailoring bonding programs for specific contracting opportunities


Current mcdp initiatives
Current MCDP Initiatives Bondability through Assisting Contractors in Better Addressing the 3 Cs – Elements of Surety Bonding Prequalification

  • New Jersey School Construction Program

  • US DOT Bond Guarantee Program

  • State of Ohio Bond Guarantee Program

  • Hillsborough County (Tampa), FL Bonding Support Program

  • Prince George’s County, MD Small Business Initiative

  • North Carolina DOT Bonding Support Program

  • Veteran’s Corporation MOU

  • Brooklyn, NY Chamber of Commerce/NYSAMC MOU

  • MBDA MOU


For more information contact
For More Information Contact: Bondability through Assisting Contractors in Better Addressing the 3 Cs – Elements of Surety Bonding Prequalification

The Surety & Fidelity Association of America

Sam Carradine, Director of Development and Diversity

1101 Connecticut Avenue, NW, Suite 800

Washington, DC 20036

Tel: (202) 778-3638; Fax: (202) 463-0606

E-mail: scarradine@surety.org


Local contact
Local Contact Bondability through Assisting Contractors in Better Addressing the 3 Cs – Elements of Surety Bonding Prequalification

  • Dana Cleveland

  • Trinity Insurance Agency

  • Dcleveland1.tia@gmail.com

  • 248.327.6541