SFAA Provides Guidance on Proposed Individual Surety Affidavit
January 4, 2021
William F. Clark
Director, Office of Government-wide Acquisition Policy,
Office of Acquisition Policy, Office of Government-wide Policy
General Services Administration (GSA)
1800 F Street NW
Washington, DC 20405
Re: OMB Control No. 9000–0001, Standard Form 28, Affidavit of Individual Surety
Dear Director Clark:
As a leading representative of the surety bond industry, The Surety & Fidelity Association of America (“SFAA”)1 is writing in response to the information collection notice published on November 4, 2020, concerning OMB Control No. 9000-0001, Standard Form (SF) 28, Affidavit of Individual Surety. We appreciate the opportunity to comment on whether the proposed collection of information is necessary for the proper performance of the functions of Federal Government acquisitions. We strongly believe much of the information currently included in this November 4 notice will be out of compliance with proposed FAR regulations for the following reasons:
- Earlier this year the FAR proposed new regulations under FAR Case 2017-003, limiting acceptable assets pledged by noncorporate sureties, as mandated under Section 874 of the FY 2016 National Defense Authorization Act (NDAA).
- The SF 28 Affidavit referred to in the November 4, 2020 Federal Register notice would implement regulations based on the old, pre-amendment statute.
- The November 4, 2020 notice regarding SF 28 does not take into account the changes articulated through FAR Case 2017-003 to ensure compliance with Section 874 of the FY 2016 NDAA.
For the reasons stated above, SFAA strongly recommends the FAR agencies wait to update SF 28 until the FAR finalizes its rules regarding individual sureties, articulated in the proposed FAR Case 2017-003. Importantly, Section 874 of the FY 2016 NDAA instructs the FAR to make changes to the assets that must be pledged by individual sureties. SFAA strongly supported the changes outlined in the proposed FAR Case 2017-003 which would update Individual surety’s “eligible obligations,” which is defined in 31 CFR Part 225, “Acceptable Collateral for Pledging to Federal Agencies.” SFAA believes the proposal will provide important improvements to strengthen the integrity of the federal bonding process by making certain that the assets supporting non-corporate surety bonds are sufficient and in the care of knowledgeable authorities protecting small businesses and taxpayer funds. To date, however, the FAR Council has yet to issue a final rule concerning FAR Case 2017-003.
The renewal/revision of SF 28 is premature because it is uncertain what types of information should be solicited on SF 28, given the asset rule changes proposed in FAR Case 2017-003, are not yet finalized. SFAA strongly opposes the three-year adoption articulated in this notice as it will be outdated once the FAR agencies finalize FAR Case 2017-003. The information requested in the SF 28 as proposed will have little relevance to the information needed under the adopted FAR Case 2017-003. SFAA urges that the FAR Council implement FAR Case 2017-003, Individual Sureties as soon as possible, considering that it is the implementation of a four-year old statute. Once implemented, FAR should create the necessary reporting requirements that will potentially eliminate instances where individual surety bonds are accepted with worthless assets or with assets that are beyond the control of contracting officials.
SFAA appreciates the opportunity to provide input into the FAR’s process to update SF 28 and welcomes any questions you may have with respect to SF 28 after the adoption of a final rule based on FAR Case 2017-003.
Sincerely,
Julie Alleyne,
General Counsel and Director of Policy
____________________
1 SFAA is a trade association of more than 425 insurance companies that write 98 percent of surety and fidelity bonds in the U.S. SFAA is licensed as a rating or advisory organization in all states and it has been designated by state insurance departments as a statistical agent for the reporting of fidelity and surety experience.
