Archive for July, 2014
When a whistleblower sent an email to federal officials asking them to look into what seemed “dangerously close” to fraud, the Attorney General’s Office followed up. In time the contract was cancelled but that doesn’t mean the Jindal administration is in the clear yet.
A Conflict of InterestA closer look is being called for regarding the possibility of fraud connected to this recent contract awarding. The contract was for state Medicaid claims processing. The $200 million contract had been awarded to a company that was the former employer of Louisiana’s chief of their state health agency. This is the same agency that would make the decision on the contract, causing a clear conflict according to many familiar with the case. Another red flag went up for those aware of this contract when it came to the performance bond requirements.
Performance Bond Requirements Not MetAs part of the bid for this very lucrative contract, the technology firm CSNI would be required to among other things post a $6 million performance bond to ensure the proper performance of the claims processing of Medicaid. The performance bond requirement is part of any bid that involves the processing of federally mandated programs such as Medicaid. The truth is CSNI could not qualify for that performance bond, according to the email sent by former CNSI employee Steve Smith. Smith was an employee of CSNI at the time of the email. That inability to qualify for the performance bond along with the connection with the secretary of the state Department of Health and Hospitals Bruce Greenstein was cause enough to call for an investigation.
Investigation Leads to ResignationAn investigation began but before it had even gotten to the starting gate the contract was awarded to the company in question. This provoked more questions of suitability and how the company could be awarded the contract if it didn’t fulfill the performance bond requirements for a start. All of these questions led to a federal Grand Jury probe about a year after the contract had been first awarded. No sooner did that happen then the contract was cancelled by the State Administrations Office and Bruce Greenstein resigned. Although the federal probe never led to charges, a new state grand jury investigation is now underway.
The Importance of Performance BondsOf course, all of this simply underlines the importance of making sure that your company can fulfill a performance bond requirement when it is part of a project or contract bid. It is obvious that if CNSI had simply looked into performance bond requirements before they submitted their bid, and chosen to not bid for a contract they couldn’t legally have accepted, this would have all been avoided. If you are looking at submitting a bid for a contract or project and a performance bond or any other kind of surety bond is part of the bidding process, you can get qualified quickly and easily with BuySurety.
We have been helping large and small companies find the best way to get qualified for any kind of surety bond from an administrator bond for estate probate to a yacht broker bond to cover yacht sales liabilities since 1998 and we can help you too. Call our customer service reps or visit our website today to find out just how fast and easy you can qualify for that important surety bond for your next contract or project bid.
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Uniform Law on Notarian ActsAlthough the name of the law may sound peculiar, there is no question that it is indeed enforceable and will be implemented across the state. Before this bill there had not been a requirement for a notary in West Virginia to have a license bond, which pledges the notary to act within legal and ethical boundaries in the course of their job. It also binds them to the Code of West Virginia, as set by legislature. In addition, the new bill will enact the following:
- Notary commission is reduced from ten years to five years
- Notaries can now charge $5 per notary act instead of the prior $2
- Notaries can now notarize electronically, called e-notarization
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But that doesn’t mean that your small business can’t qualify for those important and business building surety bonds. Here are a few tips to help you understand why these small business surety bonds are so vital to your financial health and how to improve your chances at qualifying for them when the project or opportunity arises that require one.
Why Do I Need a Small Business Surety Bond?For many small business owners the first question is why they want to try and qualify for any kind of small business surety bond such as a performance bond or a payment bond. As the economy recovers many city state and federal government projects are seeing new life and increased funding. These types of lucrative projects, whether it is as a contractor providing laborers for construction or a local provider for schools, will require a guarantee of your ability to deliver what you promise. In the case of a performance bond, it will guarantee that you will perform according to your contractual agreement on the project. When it is a payment bond, you are guaranteeing that subcontractors and suppliers that you bring in will be paid according to the contractual schedule. Since most if not all government project require these guarantees, if you want to be able to bid for this type of work, you will need to qualify for bid surety bonds, performance bonds and even payment bonds if you act as a contractor with subcontractors and suppliers. As the saying goes, any money you leave on the table isn’t yours when you head home, so why leave this growing and important sector to the competition?
Qualifying for that Surety BondOf course, the big hold up for many is simply qualifying for a surety bond if you have never done so before. For a brand new small business, surety bond qualification may seem beyond you, but it doesn’t have to be if you plan for it. The key is to work closely with your financial adviser and have these four items in mind as you prepare to qualify for a small business surety bond:
- Working Capital – You must be able to demonstrate your ability to raise adequate capital for future projects. This means your current assets minus your liabilities must always be top of mind when planning.
- Banking Relationships – Do you have a strong relationship with your bank? This is the kind of qualification that takes time to work on, and is worth the time you do spend. Talk to your financial adviser about the best way to approach this.
- Strong Job History – Even if you are just starting out, you can point to the success of what has been done before. Work-in-progress that is timely and within budget, bid results that show your ability to keep your promise and how much work you have in the pipeline are all part of this equation.
- Cash Flow- This one is vital since the majority of times a surety bond is called in to complete a project it will be because the bond holder has had a cash flow problem. Take a hard look at your own current cash flow situation and if it isn’t up to snuff, discuss with your financial adviser what you can do to change that.
Tags: bid bond, bid bonds, commercial surety bonds, contract bonds, get a surety bond, get bonded, Performance Bond, performance bonds, performance surety bonds, post a surety bond, SBA Bond Program, small contractors, surety bond definition, what is a surety bond
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New Surety Bond RequirementsAlong with the new requirements for all locations where a mortgage service provider does business to be licensed separately, each location will also need to post a surety bond of $100,000. In addition, the bank commissioner may choose to decide if the financial standing of the mortgage servicer will necessitate additional performance surety bond requirements beyond the $100,000 bond. The performance bond will ensure that the mortgage servicer performs their business in an honest manner and has trustworthy accounting practices. It will also ensure that the business conforms to all applicable laws pertaining to the business of mortgage servicing. While the licensing changes will go into effect on January 1, 2015, the changes in the requirements for surety bonds will be law as of November 1, 2014. These new surety bond requirements are in addition to the already mandatory fidelity bonds and errors and omissions bonds that all financial service businesses including mortgage service companies are required to have.
Get Bonded for Your Business QuicklyAs you can see, changes in a business requirement can move quickly. In this case the Connecticut bill was introduced in February of 2014 and became law by June 3rd. This is a good example of why it is so important for every business to be up to date on the surety bond regulations for their industry. When requirements change quickly you want to be ready, and BuySurety can get you there. We know all the latest legislative changes, can put together the surety bond requirements you need quickly and get you bonded to stay legal fast. Bonding businesses since 1989, BuySurety can be there for you when you need to fulfill that new surety bond requirement. Visit our website or call our customer service reps and find out just how easy it is to keep your business up to date with all the state and federal surety bond requirements.
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That $5 million performance bond is just one element to keep only serious investors in the game. In addition, the state has made a few other requirements that will also keep outsiders intent on jumping on the medical pot bandwagon at bay and reward established local businesses that want to invest in what may prove to be the best cash crop they have seen in years. But the question remains, will it prove worth the risk?
Performance Bond Reduces RiskIt is easy to see why the Florida state department wants to put some limitations on exactly who will be able to get in on the ground floor. With an eye on the sales in Washington and Colorado, many expect the medical pot ruling to be just the start of a new and fairly lucrative venture. But Florida has made some smart limitations on just who they will allow to be part of the new medical marijuana market. Initially only five companies, picked via a lottery system, will be involved. All five companies will need to fulfill certain requirements.
- Only nurseries that have been in business in Florida for a minimum of 30 years and have at least 400,000 plants are eligible for the lottery.
- Upon being awarded the license, the company will need to come up with a $150,000 investment within 30 days of licensing.
- This is in addition to the cost of investing in growing facilities, dispensaries and the lab for testing the product.
- In addition, the company will need to qualify for and obtain a $5 million performance bond.
- Growers will not see the license form ahead of time and have only 10 days from when they get their hands on it to fill it out and turn it in.
Investors and Growers Have QuestionsNaturally with these kinds of specifications, many growers are considering the possibility of partnering with an investment group. At the recent workshop investors were acknowledged but it was not made clear if the business would need to be in the investors name or the name of the nursery owner. Many companies are already reporting a large amount of calls from “experienced expert growers” looking for positions. Of course, another consideration for many growers is that even if they have the facilities to grow marijuana, they would need to install additional security if they should win the lottery. That $5 million performance bond will certainly help cover unexpected problems should the security not prove sufficient, but no one wants to even discuss that possibility.
Get Bonded Quickly and EasilyAs this one instance points out, you never can tell when you will need to have the ability to get bonded quickly. You don’t have to be a Florida pot grower to understand the need to qualify quickly for any kind of surety bond whether it is a performance bond for a nursery or an auto dealer bond for a car dealership. No matter what kind of business you do, no matter what kind of surety bond you need, BuySurety can get you bonded quickly and within your business budget. We have been providing surety bonds to a wide range of businesses across the nation since 1998. Why take chances? Get bonded with BuySurety and be sure.
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