Archive for July, 2014

Performance Bond Requirements Alert Whistleblower in Louisiana

Written by JoAnn Smith on July 30th, 2014. Posted in Bond Types, Contract Bonds, Lousiana, Performance Bonds, States, Surety Bond Blog

     performance bond requirements      
performance bond requirements tip off whistleblower
If a company cannot fulfill the performance bond requirements for a project, should they even be considered for it let alone rewarded with the contract? In Louisiana it appears that they might be, if they have close connections with the person doing the contract awarding.
 
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 Interest

A 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 Met

As 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 Resignation

An 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 Bonds

Of 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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Changes for West Virginia Notaries Includes License Bonds

Written by JoAnn Smith on July 28th, 2014. Posted in Bond Types, Latest News, License and Permit Bonds, Surety Bond Blog, West Virginia

     license bond      
Notaries will now need a license bond in West Virginia
If you have a business in West Virginia that includes offering the services of a notary, you may want to pay attention to a new law recently passed. The bill, West Virginia Senate Bill 04 will change a few of the requirements for anyone acting as a notary in West Virginia beginning July 01, 2014. These changes will include the requirement of a surety license bond as well as several other new requirements. Changes will affect everyone in West Virginia who has a notary license regardless of where they do business in West Virginia.

Uniform Law on Notarian Acts

Although 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
For more information on the requirements of a notary license and how to obtain a license bond, be sure to contact BuySurety. We have been supplying surety bonds, including required license bonds, to a variety of businesses and professions across the nation for over a decade. Find out just how fast and easy it is to get your license bond or any other surety bond you need from BuySurety today.

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Four Tips to Strengthen Small Business Surety Bond Qualifications

Written by JoAnn Smith on July 24th, 2014. Posted in Commercial Bonds, Finance Bonds, Non-Construction Contract Performance Bonds, Payment Bonds, Performance Bonds, Surety Bond Blog

     small business surety bond      
Small business surety bonds are vital to local businesses like these.
While the economy has begun to show real signs of recovery from the 2008 crash, for many owners, small business surety bond qualification is still a tough nut to crack. The qualifications for many small business related surety bonds continue to be restrictive and to many business owners a bit behind the times. This is natural as a conservative business like surety bonds has a tendency to lag behind economic trends.
 
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 Bond

Of 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.
Beyond these, keep in mind that simply having the money is not always enough to qualify for a surety bond for your small business. In addition you will want to gather together letters of recommendation from previous business partners and vendors, letters of credit and as much financial detail as possible. Finding a surety company that understands your business, such as BuySurety, can also be a big help. BuySurety has helped small businesses get bonded across the country since 1998. Working with an experienced surety bond company like BuySurety as well as bringing in your financial adviser to be part of your surety bond team can ensure that you not only qualify for that important surety bond but get the rate you need to make it a smart financial move.

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New Surety Bond Requirements for Connecticut Mortgage Servicers

Written by JoAnn Smith on July 21st, 2014. Posted in Bond Types, Connecticut, Indemnity Bonds, Latest News, License and Permit Bonds, Performance Bonds, Surety Bond Blog

     new surety bond requirements.      
Connecticut mortgage service companies have new surety bond requirements
Connecticut mortgage servicing companies will be seeing new surety bond requirements starting in the new year with the passage of Connecticut House Bill 5353. The bill, which moved quickly through the House for passage will amongst several other things redefine anyone acting as a mortgage service company to now be a mortgage service provider that is required to be licensed from the banking commissioner. In addition, each main branch must now have its own license, as well as each individual branch office where the mortgage servicer does business. New surety bond requirements will be part of these new licensing requirements.

New Surety Bond Requirements

Along 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 Quickly

As 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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Florida Pot Growers Will Need Performance Bond

Written by JoAnn Smith on July 16th, 2014. Posted in Bond Types, Contract Bonds, Florida, Latest News, Performance Bonds, Surety Bond Blog

     Florida pot growers will need a performance bond.      
Florida pot growers will need performance bonds.
For potential Florida pot growers, the word is out that a $5 million performance bond may be part of the deal to get into the lucrative market, according to a workshop recently held by the Florida health regulators. With Florida joining the growing number of states that are legalizing medicinal marijuana, many will be watching how the Florida approach works and what flaws appear in the system.
 
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 Risk

It 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 Questions

Naturally 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 Easily

As 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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