To bolster recovery in the construction and service sectors, the SBA said it is offering surety bond guarantees on federal contracts valued at up to $10 million.
The condition is the contracting officer has to certify that the guarantee is in the best interests of the government, the SBA said today.
Under a current, related provision of the Recovery Act implemented in March, the agency 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, the agency provides a guarantee to the participating surety company of between 70 and 90% of the bond amount. Through its bond guarantee program, the SBA said it will also help by guaranteeing bid, payment and performance bonds to protect the project owner against financial loss if a contractor defaults or fails to perform.
More details on the program are available at http://www.sba.gov/osg/.
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