Underwriters support payment protections for TIFIA-funded project subs

The Surety & Fidelity Association of America in Washington, D.C. cites Senators Chris Van Hollen (D-MD) and Mike Rounds (R-SD), and Congressmen Stephen Lynch (D-MA) and Troy Balderson (R-OH) for their introduction of “Promoting Infrastructure by Protecting Our Subcontractors and Taxpayers Act.” The legislation provides essential protections for workers, suppliers and contractors by requiring payment backing on federally financed infrastructure projects receiving Transportation Infrastructure Finance and Innovation Act (TIFIA) loans, including public-private partnership (P3) contracts.

“Bonding TIFIA-financed P3 projects will protect taxpayers’ dollars, ensure project completion, protect local small business contractors and workers, and promote economic growth,” says SFAA President Lee Covington. “TIFIA should be modernized to include the same payment and performance requirements that protect all other federally funded infrastructure projects.”

P3 projects have increased in popularity over the years. The lack of clarity for requiring payment and performance protections on such contracts, however, can force taxpayers to absorb additional costs of rebidding a job, often leaving subcontractors and workers unpaid for extended periods of time if the contractor defaults. By ensuring a bond requirement, SFAA contends, P3 projects will offer the same payment and performance protections as those covering public infrastructure projects—benefitting the construction industry and taxpayers alike.

“Construction is a risky business, and for over 80 years, the federal and state Miller Acts have protected against the risk of loss by requiring payment and performance bonds,” Covington observes. “SFAA looks forward to working with Congress, on a bipartisan basis, for the passage of this essential bill.”

Two drivers for Gulfeagle Supply, an Oklahoma City roofing and building products dealer, were terminated in August 2020 after refusing to operate a truck whose tires appeared unsafe, a condition they had reported to a manager. Determining Surface Transportation Assistance Act violations, the Occupational Safety and Health Administration ordered the company to reinstate both drivers at its Oklahoma City yard, and pay each more than $23,000 in back wages, along with $70,000 in punitive damages.

“Federal law helps make our roads safer by empowering drivers to refuse to drive trucks not properly maintained,” says OSHA Regional Administrator Eric Harbin in Dallas. “OSHA is committed to protecting workers who do what’s right when it comes to their safety and that of others.” The agency’s Whistleblower Protection Program enforces provisions of 25 whistleblower statutes protecting employees from retaliation for reporting violations of various workplace safety and health, environmental, commercial motor carrier, and motor vehicle safety laws, and for engaging in other related protected activities, he adds.

OSHA has also ordered Gulfeagle Supply to train managers and employees on workers’ rights under the STAA. In addition to Oklahoma and Florida, the Tampa-based company has roofing and building products location in Alabama, Colorado, Georgia, Iowa, Kansas, Minnesota, Missouri, North Carolina, North Dakota, South Carolina and Texas.


  • Public-Private Partnerships (P3) have become a more common financing and construction delivery method among state departments of transportation.
  • P3s were not contemplated when TIFIA was first enacted, so TIFIA did not need to address surety bonds, which are required by law under all traditional (non-P3) construction delivery methods.
  • TIFIA-financed P3 projects entail large infrastructure contracts with significant federal assets at stake.
  • Bonding protects small business subcontractors and taxpayers; ensures project completion; and, supports economic growth.
  • Surety bonds are just as important for TIFIA-financed projects as other federally funded projects.
  • The legislation from Senators Van Hollen and Rounds and Representatives Lynch and Balderson is needed to clarify that performance and payment security is required to protect the public interest, regardless of construction delivery method.

SOURCE: Surety & Fidelity Association of America