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AIA, SFAA and NASBP Announce Revision to A312-1984 Performance Bond and Payment Bond
Revision Provides Interim Response to Surety Concerns
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For Immediate Release |
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Washington, D.C., May 28,
2008 — The American Institute of Architects (AIA), The Surety &
Fidelity Association of America (SFAA) and the National Association
of Surety Bond Producers (NASBP) joined in announcing today a
revision to AIA’s commonly used A312-1984 Performance Bond and
Payment Bond. To see the revision, go to
www.aiacontractdocuments.org. The revision provides an interim
response to surety concerns that the Payment Bond has been
incorrectly interpreted in the courts. Over the coming months, the
AIA will work with SFAA, NASBP and organizations representing
owners, contractors, subcontractors, and other potential bond
claimants to review fully and overhaul as necessary both A312-1984
Performance Bond and Payment Bond and A310-1970 Bid Bond.
The revision changes very few words in the A312 Payment Bond, but
the changes provide relief to sureties without compromising the
needs of those who may be making claims under the bond. For
sureties, the revision extends the bond’s response time from
45 to 60 days and adds text to establish that if a surety does not
respond in a timely manner, it does not thereby waive its defenses.
However, a surety that fails to fulfill its obligations under
Section 6 of the bond will have to indemnify the claimant for
reasonable attorney’s fees the claimant incurs to recover
amounts owed.
“It was important to us to address the sureties’ concerns
as promptly as possible, but not to substantially revise the bond
without the input of owners and claimants,” said Suzanne
Harness, managing director and counsel, AIA Contract Documents.
“The revision provides an interim solution as we work toward
revising the bond forms with input from sureties, owners and
claimants.”
Edward Gallagher, general counsel of SFAA, expressed appreciation
to the AIA for issuing the modification and noted, “The
revision is a substantial improvement that addresses the
surety’s primary concern, the potential loss of defenses. As
the process moves forward, we will work with the AIA to address
other issues raised in the court decisions.”
Richard Foss, executive vice president of NASBP, concurred,
stating, “AIA was responsive to our request for a
“stopgap” modification to help address the confusion and
concerns caused by recent court decisions interpreting the A312
Payment Bond Form.” “We look forward to working with the
AIA and other industry organizations to further improve the bond
forms over the next year,” he added.
About The American Institute of
Architects
For over 150 years, members of the American Institute of Architects
have worked with each other and their communities to create more
valuable, healthy, secure, and sustainable buildings and
cityscapes. By using sustainable design practices, materials, and
techniques, AIA architects are uniquely poised to provide the
leadership and guidance needed to provide solutions to address
climate change. AIA architects walk the walk on sustainable design.
Visit www.aia.org/walkthewalk.
About The Surety & Fidelity Association of
America
The Surety & Fidelity Association of America (“SFAA”)
is a national trade association of companies licensed to write
fidelity and surety insurance in the United States. SFAA’s
approximately 500 members are sureties on the vast majority of
contract performance and payment bonds written in the United
States. www.surety.org
About the National Association of Surety Bond
Producers
The National Association of Surety Bond Producers (NASBP),
established in 1942, is an international trade association in
Washington, DC serving a membership of firms with personnel of over
5,000 surety agents and brokers. NASBP members specialize in
providing surety bonds for construction and other commercial
purposes to companies and individuals needing the assurance offered
by surety bonds. NASBP members have broad knowledge of the surety
marketplace and the business strategies and underwriting
differences among surety companies. As trusted advisors,
professional surety bond producers act in many key roles to
position their clients to meet the underwriting requirements for
surety credit. www.nasbp.org
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