This paper reviews the performance of the Surety Bond Guarantee Program of the Small Business Administration in terms of its impact on small and minority contractors, Federal, state and local government construction costs, employment, and the cost to the taxpayer. With a formalized model, it identifies conditions under which sureties have an incentive to use the program to bond conventionally bondable contractors, and demonstrates how SBA can alter variables within its control to remove these conditions, taking into account the trade-off between discouraging bondable and encouraging unbondable contractors’ participation in the program.
Get full access to this article
View all access options for this article.
References
1.
U.S. Congress, House, Hearings before the Subcommittee on SBA Oversight and Minority Enterprise of the Committee on Small Business, 94th Congress, 1st session, Nov. 20, 1975.
2.
U.S. Congress, House, A Report of the Subcommittee on SBA Oversight and Minority Enterprise.
3.
U.S. Congress, Senate, Hearings before the Select Committee on Small Business, 94th Congress.
4.
U.S. Small Business Administration, Office of Advocacy Planning and Research, Study of the Small Business Administration's Surety Bond Guarantee Program. Preliminary Findings and Recommendations, 23 August 1975.
