On Friday August 4th, Senator Olympia J. Snowe (R-ME), chair of the Senate Committee on Small Business and Entrepreneurship, introduced the “Surety Bond Improvements Act of 2006”. The proposed legislation will reform and update the SBA’s Surety Bond Guarantee program by increasing the number of bonding companies involved, as well as the number of small businesses obtaining bonds through the program. The senator stated, “My legislation will help ensure that small businesses are able to obtain the surety bonds they need to compete for government contracts and create jobs,”. “These necessary program changes will help revitalize the SBG program and make it easier for small business to fulfill their contractual obligations.”
Snowe’s bill increases the program’s max bond limit by 50%, from two million to 3 million. This will allow contractors that obtain their bonds through the program to go after larger contracts. Obviously, the max bond amount must be increased from time to time to cope with inflation. The senator also made sure that bond claims from the previous SBA program guidelines could not be rejected. An important item to make very clear rather than assume. It will also rid the program of price controls and rate requirements on the Preferred Surety Bond program and require that the SBA make available to the public any study used to justify a fee increase as well as the overall fees taken in by the program and the program’s overall expenses.
You can read more about the Small Business Administration’s current surety bond guarantee program at the following links: MBDA: SBA Guarantee Bond Program and SBA: Surety Bond Program, General Information
What do you think about Snowe’s bill? Feel free to post a comment below and tell us your thoughts.