Amid roiling economic times, small businesses in California will now have greater access to contracting opportunities thanks to a new joint venture between the U.S. Small Business Administration and the state Department of Transportation.
The pair has put together a program called the Joint Bond Assistance Initiative, which helps qualified small businesses get the bonding required for Caltrans construction contracts and subcontracts.
Under the new initiative, the SBA guarantees a surety company between 70 and 90 percent of the cost incurred in the event of a contract default. The provision is aimed at increasing the participation of surety companies and agents.
The joint initiative comes on the heels of the recent passage of the American Recovery and Reinvestment Act. Among a host of provisions important for small businesses, the Act raises the ceiling for small business bond guarantee eligibility from $2 million to $5 million and up to $10 million on federal contracts.
“During these difficult economic times,” said SBA Administrator Karen G. Mills, “this kind of federal-state partnership is particularly helpful to small and emerging contractors who have seen their markets hurt by a poor economy and a lagging construction environment.”