A new initiative just launched by the Dormitory Authority of the State of New York aims to increase access to surety bonds for minority- and women-owned construction contractors.
The authority’s Surety Bond/Capital Access Program will work to help these firms obtain the bonding and capital necessary to grow from subcontractors to prime contractors or to simply increase capacity for major construction projects. The authority will spend up to $3 million during the program’s initial run, which will include a group of about 25 MWBE contractors working on state Dormitory Authority projects.
About $2 million of that is expected to leverage close to $20 million in surety bonding. The rest will be put toward the obtaining of bridge loans, which can help contractors cover early-stage costs like equipment and payroll.
Founded in 1944, the Dormitory Authority is the largest higher education, health care and public-purpose bonding and construction authority in the nation. It has a construction pipeline of 716 projects valued at $7.3 billion and a bond portfolio of more than $38 billion.
The authority expects the new bonding and capital initiative to spur job growth and creation and help boost the exposure and reach of MWBE contractors.
“This Surety Bond / Capital Access program is an excellent example of how a government agency can innovatively create opportunities for private sector companies to grow, create jobs and generate opportunity,” Paul T. Williams, Jr., executive director of the Dormitory Authority, said this week in a news release. “The lack of available surety bond capacity for MWBE firms is a major barrier to their development and with this program we are building business skills and access to bonding and capital that will help firms compete successfully for public and private work.”
Companies taking part in the program have to be registered and certified as MWBE firms and have at least two years of experience.
“Once firms are issued surety bonds and demonstrate successful completion of multiple projects, they will have established a track record that will establish lasting relationships with bonding companies that can yield surety bonds on both public and private projects,” said Michael Clay, director of the Opportunity Programs Group at the Dormitory Authority.