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SBA offers $10 million surety bond guarantee

Small businesses that would otherwise not be able to obtain bonding in the traditional commercial marketplace have an expanded opportunity through the Small Business Administration (SBA) to obtain bonding. Using Recovery Act provisions implemented earlier this year, the SBA has announced it can now provide surety bond guarantees on federal contracts valued at up to $10 million, if the contracting officer certifies that the guarantee is in the best interests of the government. An Interim Final Rule is available for public inspection at the Federal Register. 

Currently, under a related provision of the Recovery Act that was implemented in March, SBA can provide bond guarantees up to $5 million through September 2010 on all public and private contracts and subcontracts. SBA partners with the surety industry to help small businesses that would otherwise be unable to obtain bonding in the traditional commercial marketplace.  Under the partnership, SBA provides a guarantee to the participating surety company of between 70 and 90 percent of the bond amount.

 “Raising the surety bond limit is a critical step in making sure small businesses in the construction and service sector have access to federal contracting opportunities that will help drive economic recovery,” SBA Administrator Karen Mills said. “These changes support small and emerging businesses nationwide, particularly construction contractors who have seen their markets hurt by a poor economy and lagging construction.”

More information is available at the SBA Web site, www.sba.gov.


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