This month the Small Business Administration (SBA) finalized its proposed rule: Miscellaneous Amendments to Business Loan and Surety Bond Guarantee Programs
. The rule will become effective on September 20, 2017. On September 16, 2016, NASBP submitted comments
focused on the following areas. Threshold Change Amounts: Revisions to §§ 115.19, 115.32, and 115.67
• NASBP recommended removing the $100,000 threshold and sticking with a flat 25% fee but cautioned this may impact smaller projects.
• SBA considered this comment and settled on raising the threshold to $500,000 “in the interests of striking a balance between the risks to the Agency and minimizing any burden on Sureties” and specifying the 25% was on the “original contract amount”.
Quarterly Contract Completion Notification: Revisions to § 115.22
• NASBP recommended a requirement for contract completion reports every six months, rather than the proposed 45 days.
• SBA considered this but stuck to 45 days.
Quick Bond Guarantee Application
• SBA amended this section to increase the Quick Bond eligible contract limit from $250,000 to $400,000, which we supported.
Preferred Surety Bond Guarantee Program: Increase of Guarantee
• SBA proposed to revise this section to provide that SBA will reimburse a Preferred Surety Bond (PSB) Program Surety in the same percentages and under the same terms as set forth in § 115.31, as authorized by § 874 of Title VIII of Division A of the National Defense Authorization Act, 2016, Public Law 114-92, 129 Stat. 726. All commenters supported this revision and this provision is adopted as proposed.
Additionally, the Surety Bond Guarantee Program announced it has increased its contract limits by financial statement level.
For more information, contact NASBP Assistant Director of Government Relations Shannon Crawford at email@example.com.