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What's New: Government Affairs

SFAA Tells SBA of its Progress in Assisting Small Contractors With Bonding

Thursday, August 02, 2012  

SFAA outlined its progress in helping small and emerging contractors obtain bonding through implementation of our Model Contractor Development Program.(MCDP)® In a letter sent in advance of a meeting of the Interagency Task Force on Veterans Small Business Development of the Small Business Administration (SBA Interagency Task Force), SFAA reported that in the past three years alone, more than $275 million in bonding has been offered or underwritten by Treasury-listed surety companies through implementation of our MCDP at the federal, state and local levels. That includes nearly $125 million through implementation of our MCDP with the U.S. Department of Transportation (DOT) and over $150 million in state and local programs in that time period.

In 2010, SFAA and the DOT kicked off a pilot Bonding Education Program (BEP). The BEP is a surety bond assistance program to provide bonding education, placement and technical assistance to small businesses competing for, or awarded, transportation-related contracts, based on our MCDP. Since the inception of BEP, hundreds of small, women, and minority contractors have completed the workshops and many have obtained bonding or are set to receive bonds totaling over $123 million combined.

During the summer of 2010, the DOT kicked off the pilot program for BEP in three locations and 50 contractors completed the workshops in Chicago, Atlanta, and Dallas, and total bonding was over $37 million. In 2011, over two hundred contractors completed the BEP in 10 cities throughout the country, resulting in $69.4 million in total bonding. Nine of the 14 programs planned for 2012 have been completed with impressive results—$17 million in bonding to date.

This year, SFAA entered into a Memorandum of Understanding (MOU) with the Veterans Entrepreneurship Task Force (VET-Force). As a first step under the MOU, SFAA will work with VET-Force to implement its MCDP as an initiative for veterans in the Washington, DC, area that will include online capability/capacity assessments, networking and outreach, classroom training, resource identification and referral, mentoring, and assistance in the bonding process. The collaborative MCDP effort is scheduled to be launched in the fall of this year with subsequent efforts in regions around the country to take place in 2013. SFAA started our MCDP with the DOT with an MOU, and we expect that our effort with VET- Force under our latest MOU will be equally as successful as with the DOT.

The SBA Interagency Task Force was formed pursuant to an Executive Order in April, 2010, to coordinate and improve the activities of federal agencies regarding the capital and business development opportunities available to veteran- and service-disabled veteran-owned contractors and to improve the agencies performance under their small business participation goals with respect to these contractors. The Task Force has six primary focus areas, one of which is access to capital (loans, surety bonding and franchising).

The Task Force issued its first report in November, 2011, in which the initial recommendations on bonding involved greater awareness and use of the SBA Bond Guarantee Program among veteran contractors. The Task Force also advocated for an increase in the SBA’s maximum bond guarantee from $2 million to $5 million. SFAA has participated in meetings of the SBA Interagency Task Force and continues to urge the Task Force to support other reforms that SFAA members believe are needed to improve the operation of the SBA Bond Guarantee Program.

The SBA Interagency Task Force will meet next week to review progress in all of its focus areas. SFAA will attend and will update its members on the work of this Task Force.


PDF Version of Announcement / PDF Version of SFAA Letter to SBA


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