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Small Business: Information on Participation in SBA's Bonding Activities

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Report Type Reports and Testimonies
Report Date March 24, 1994
Report No. RCED-94-134
Subject
Summary:

The Small Business Administration's (SBA) Preferred Surety Bond Guarantee Program allows approved insurance companies to issue SBA-guaranteed surety bonds without SBA's prior approval of individual bonds. Surety bonds ensure that a contract will be completed, and supplier and workers paid, should the contractor fail to perform the contract. The goal is to encourage large insurance companies to issue SBA-guaranteed bonds and in turn increase the access the surety bonds by small businesses owned and operated by minorities and disadvantaged individuals. GAO found that the program has boosted large insurance company participation in SBA's bonding activities. The impact on minority firms is unclear, however.

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