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An Analysis of Small Business Administration's Surety Bond Guarantee Program1

An Analysis of Small Business Administration's Surety Bond Guarantee Program1 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Journal of Small Business SAGE

An Analysis of Small Business Administration's Surety Bond Guarantee Program1

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Publisher
SAGE
Copyright
© 1977 SAGE Publications
ISSN
0363-9428
eISSN
1540-6520
DOI
10.1177/104225877700200101
Publisher site
See Article on Publisher Site

Abstract

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.

Journal

American Journal of Small BusinessSAGE

Published: Jul 1, 1977

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