Under an interim final rule, the SBA 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.
Currently, under a related provision of the Recovery Act that was implemented in March, the SBA can provide bond guarantees up to $5 million through September 2010 on all public and private contracts and subcontracts. The 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 SBA provides a guarantee to the participating surety company of between 70% and 90% of the bond amount.
The rule also establishes:
- A new small business size standard for this program.
- Authorization for the SBA to exercise discretion in deciding bond liability issues.
- A definition of “Order” issued under an Indefinite Delivery Contract.
SBA assistance in locating a participating surety company or agent, and completing application forms, is available at sba.gov. More information on the Surety Bond Guarantee Program, including Surety Office contacts, is available at sba.gov/osg or by calling 800-U ASK SBA.
The Interim Final Rule, American Recovery and Reinvestment Act: Surety Bond Guarantees; Size Standards, is available in the Federal Register at www.gpoaccess.gov/fr. The comment period closed Aug. 21.