The United States has a lot of work to do if it wants to maintain its national network of drinking water infrastructure. That’s according to a recent report from the Environmental Protection Agency (EPA), which estimates the country needs a 20-year capital improvement of $625 billion. That money would be allocated towards the repair of existing infrastructure, as well as the construction of new infrastructure projects at the federal, state and local levels. Agents specializing in surety bonds should be aware of the opportunity presented by the prospects of these large-scale public works projects.
The American Society of Civil Engineers (ASCE) says the United States’ 2.2 million miles of piping that distributes the nation’s drinking water is aging and prone to breaks, with a water main break every two minutes on average. Of the $625 million recommended by the EPA, $420.8 billion is needed for water distribution and transmission. New construction will allow for technological upgrades to water utilities, “improving their resilience by developing and updating risk assessments and emergency response plans, as well as deploying innovative water technologies like sensors and smart water quality monitoring,” according to the report. Other areas in need of improvement are water treatment, storage and source utilities.
The EPA estimates that California needs $83.52 billion to care for its water systems, more than any other state, followed by Texas at $61.25 billion. Other areas of the country likely to see significant investment are the Midwest, the Great Lakes region, the Northeast, and Southeast, which makes the demand for surety bonding a nationwide need.
Bonds needed for subcontractors, too
Depending on the project and the authority overseeing the improvements, contract surety bonds could be required for all general and subcontractors performing work. Additionally, any contract for the construction, alteration or repair of any public building or public work of the federal government valued at more than $150,000 is required by federal law to include a performance bond and a payment bond.
Water infrastructure projects employ a variety of specializations in the trades, including excavation, civil, modular and prefab, and utility contractors of all sizes. Depending on the terms of the contract, these contractors also may need bonds.
Show your clients that you are their trusted adviser by having a conversation regarding water infrastructure projects sooner, rather than later, so that when RFPs are posted you have a head start on the competition.
For 100 years, Old Republic Surety Company has provided construction contractors with contract surety bonds, bid bonds, performance and payment bonds, and maintenance bonds. Old Republic Surety Company works with large, mid-level and small construction companies across all specialties.
