ASA-Supported Increase in SBA Small Business Bond Guarantees Now Effective


The American Subcontractors Association supported increase in bonding limits under the U.S. Small Business Administration’s Surety Bond Guarantee Program took effect on Feb. 4, after President Obama signed the National Defense Authorization Act for Fiscal Year 2013 into law on Jan. 2. The eligible contract amount that the SBA’s SBG program can guarantee on surety bonds for public and private contracts increased to $6.5 million from $2 million.

The changes also allow SBA to guarantee bonds for government contracts valued at up to $10 million if a contracting officer of a federal agency certifies that the guarantee is necessary for the small business to obtain bonding, and it is in the best interests of the government.

“These new contract ceilings are one more way we can help small businesses, particularly in the construction and service sectors, compete for and win critical contracting opportunities that help them grow their businesses and create jobs,” SBA Administrator Karen Mills said. “Additionally, these changes, which are enthusiastically supported across the surety industry and small business community, will help spur economic growth and recovery in areas that have been hard hit by disasters, bringing jobs and economic activity to regions at a time when it is needed most.” ASA joined forces with other industry trade associations on Aug. 29, 2012, and urged key U.S. senators to take action to increase opportunities for small businesses to compete for federal construction contracts.

“The average size of construction contracts awarded to small businesses by the Department of Defense for fiscal year 2010 exceeded $5.9 million — nearly triple the size for which SBA can provide bond guarantee support,” ASA, the National Association of Surety Bond Producers, and the Mechanical Contractors Association of America said in a letter to the chairmen and ranking members of the Senate Armed Services Committee and Senate Small Business & Entrepreneurship Committee. Read More.