Back in April 2009, I took a vow of silence. I promised to stop writing about the "performance bond" requirement in the D.C. Green Building Act. I had faith the D.C. Council would address the issue. Thankfully, it appears our long nightmare may be coming to an end.
Today, I am going to reset the "performance bond" issue (I have not written about it since April 2009!). On Monday, I will discuss the "Green Building Technical Corrections, Clarification, and Revision Amendment Act of 2009" (pdf) and the proposed revision to the "performance bond" requirement.
As background, for every green building mandate, you need an enforcement mechanism. The D.C. Green Building Act of 2006 requires that "after January 1, 2012, all new construction of projects 50,000 square feet or greater must comply to the LEED certification level." Here is how I described the enforcement mechanism in a previous white paper:
"One of the most controversial provisions in the Green Building Act is the performance bond requirement. After January 1, 2012, an applicant for construction of a privately-owned building must provide a performance bond which is due and payable prior to receipt of a certificate of occupancy. Thus, after January 1, 2012, if a construction project must meet green requirements in the Green Buildings Act, the ‘applicant for construction’ must also provide a performance bond guaranteeing satisfaction of the green requirements."
There are two primary problems with the D.C. Green Building Act "performance bond" requirement.
1. "The Act incorrectly uses the term ‘performance bond’ as the bond described in the Act ‘seems to function more in the manner of a license or compliance bond, which typically guarantees compliance with a law or code.’ A performance bond typically assures one party that another party will perform the contract in accordance with its terms and conditions."
2. "Let me make this clear: no bond or insurance instrument has been created that guarantees green certification. This type of security instrument does not exist. I have discussed the issue with sureties, surety industry groups, insurance companies and insurance brokers. None of them know of a security instrument that guarantees green building certification."
So what did the D.C. City Council correct either of these problems? Check back on Monday as I continue this discussion.
Related Links: What’s Your Green Construction Strategy? (GBLU) (pdf) DC’s Green Bond: The Worst Case Scenario (GBLU) Green Bond Coming to a City Near You (GBLU) The Green Building Unicorn (GBLU) Green Building Technical Corrections, Clarification, and Revision Amendment Act of 2009 (DC Council) (pdf) Photo: Henry Stern