[Federal Register Volume 86, Number 182 (Thursday, September 23, 2021)]
[Proposed Rules]
[Pages 52844-52848]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-20401]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 86, No. 182 / Thursday, September 23, 2021 /
Proposed Rules
[[Page 52844]]
SMALL BUSINESS ADMINISTRATION
13 CFR Part 115
RIN 3245-AH08
Regulatory Reform Initiative: Streamlining Surety Bond Guarantee
Program
AGENCY: U.S. Small Business Administration.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Small Business Administration (SBA) is proposing to revise
various regulations related to SBA's Surety Bond Guarantee (SBG)
program because they are obsolete, unnecessary, ineffective, or
burdensome. Additionally, SBA is proposing revisions to clarify and
modernize certain regulations and conform them to industry standards.
These proposed changes are in response to comments received from SBA's
Advance Notice of Proposed Rulemaking that was published on June 3,
2019.
DATES: Comments must be received on or before November 22, 2021.
ADDRESSES: You may submit comments, identified by RIN 3245-AH08, using
any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Search for the rule by RIN 3245-AH08 and follow the instructions for
submitting comments.
Mail: Jermaine Perry, Management Analyst, Office of Surety
Guarantees, U.S. Small Business Administration, 409 3rd Street SW, 8th
Floor, Washington, DC 20416.
SBA will post all comments on http://www.regulations.gov. If you
wish to submit confidential business information (CBI) as defined in
the User Notice at http://www.regulations.gov, please submit the
information to Jermaine Perry, Management Analyst, Office of Surety
Guarantees, U.S. Small Business Administration, 409 3rd Street SW, 8th
Floor, Washington, DC 20416. Highlight the information that you
consider to be CBI and explain why you believe this information should
be held confidential. SBA will review the information and make the
final determination as to whether to publish the information.
FOR FURTHER INFORMATION CONTACT: Jermaine Perry, Management Analyst,
Office of Surety Guarantees at (202) 401-8275 or
[email protected].
SUPPLEMENTARY INFORMATION:
A. General Information
The U.S. Small Business Administration (SBA) guarantees bid,
payment, and performance bonds for small and emerging contractors who
cannot obtain surety bonds through regular commercial channels. SBA's
guarantee, authorized pursuant to part B of title IV of the Small
Business Investment Act of 1958, 15 U.S.C. 694a et seq., gives Sureties
an incentive to provide bonding for small businesses and thereby
assists small businesses in obtaining greater access to contracting
opportunities. SBA's guarantee is an agreement between a Surety and SBA
that SBA will assume a certain percentage of the Surety's loss should a
contractor default on the underlying contract. SBA is authorized to
guarantee a Surety for a contract up to $6.5 million and, with the
certification of a contracting officer of a Federal agency, up to $10
million. For more information about SBA's Surety Bond Guarantee
Program, see https://www.sba.gov/funding-programs/surety-bonds.
This rulemaking addresses the regulations governing the Surety Bond
Guarantee (SBG) Program codified in 13 CFR part 115. Subpart A contains
provisions that apply to all surety bond guarantees, subpart B contains
provisions that apply to the bond guarantees subject to prior approval
by SBA, and subpart C contains provisions that apply to the bond
guarantees that Preferred Surety Bond Sureties may issue under
delegated authority.
Federal agencies have an ongoing responsibility to ensure that the
regulations they issue do not have an adverse economic impact on those
affected by those rules. For example, under Executive Order 13563,
Improving Regulation and Regulatory Review (January 18, 2011), agencies
are obligated to conduct a retrospective review of their regulations to
seek more affordable, less intrusive means to achieve policy goals, and
to give careful consideration to the benefits and costs of their
regulations. This executive order also requires agencies to review
existing rules to remove outdated regulations that stifle job creation
and make the U.S. economy less competitive.
B. Comments Received in Response to Advance Notice of Proposed
Rulemaking
On June 3, 2019, SBA published an Advance Notice of Proposed
Rulemaking (ANPRM) in the Federal Register (84 FR 25496) seeking input
from the public in identifying regulations under the SBG Program that
affected parties believed should be repealed, replaced, or modified
because they are obsolete, unnecessary, ineffective, or burdensome. SBA
also solicited comments from the public on how SBA can improve the
surety bond products, procedures, forms, and reporting requirements of
the SBG Program. The comment period ended on August 2, 2019. SBA has
reviewed the 54 comments submitted by the public in response. After
considering these comments and reviewing the regulations in 13 CFR part
115, SBA is proposing that the regulations identified below in the
section-by-section analysis be revised.
C. Section-by-Section Analysis
Section 115.10. Under the current definition of ``Contract'' in
this section, a Contract may include a maintenance agreement that is
ancillary to a Contract for which SBA is guaranteeing the bond
(``ancillary maintenance agreement''). SBA is proposing to clarify the
definition for these ancillary maintenance agreements and to also
expand the definition of Contract to include stand-alone maintenance
agreements.
Under the current definition, SBA will guarantee the bond for a
maintenance agreement if the agreement is for 2 years or less and
covers defective workmanship or materials only. It has been SBA's long-
standing interpretation that the maintenance agreement must be
ancillary to the Contract for which SBA is guaranteeing the bond and
may not cover defective workmanship or materials that is covered by a
manufacturer's warranty. The current definition also provides that,
with SBA's written approval, the term of a maintenance agreement can be
[[Page 52845]]
longer than 2 years for defective workmanship or materials or cover
something other than defective workmanship or materials if the
agreement is ancillary to the Contract for which SBA is guaranteeing a
bond, is performed by the same Principal, and is customarily required
in the relevant trade or industry.
For clarity, SBA is proposing to modify the existing definition by
expressly applying the following requirements to all ancillary
maintenance agreements: (1) The agreement must be ancillary to a
Contract for which SBA is guaranteeing a bond; (2) the agreement must
be performed by the same Principal; and (3) the agreement may only
cover defective workmanship or materials that are not covered by a
manufacturer's warranty. With SBA's prior written approval, the
agreement covering defective workmanship or materials may be for a term
longer than 2 years, or the agreement may cover something other than
defective workmanship or materials, if such agreement is customarily
required in the relevant trade or industry.
SBA received a comment in response to the ANPRM that requested that
SBA consider expanding the definition of Contract to include stand-
alone maintenance contracts. The commenter stated that bonds for stand-
alone maintenance contracts are commonly written and that excluding
these types of bonds from SBA's surety bond guarantee program seems
unjustified. SBA agrees that it can offer a bond guarantee for these
types of agreements and is proposing to create a new category under the
definition of Contract to include them, provided that the stand-alone
maintenance agreement: (1) Is entered into in connection with a
Contract for which a bond was not required; (2) only covers defective
workmanship or materials that are not covered by a manufacturer's
warranty; (3) is entered into with the same Principal; and (4) covers a
period of 3 years or less that begins immediately after the Contract is
complete and was executed prior to the completion of the Contract. With
SBA's prior written approval, the agreement may cover a period longer
than 3 years if such agreement is customarily required in the relevant
trade or industry.
SBA also received a comment suggesting that SBA reorganize the
definition of ``Contract'' so that it is shorter and broken into
several parts. SBA agrees that it would help to clarify the definition
by reorganizing it into several parts and is proposing to do so.
Section 115.12. Under section 411(a)(1)(B) of the Small Business
Investment Act of 1958, SBA may guarantee a surety bond for a total
work order or contract amount that is greater than $6,500,000 (as
adjusted for inflation under 41 U.S.C. 1908), but not exceeding
$10,000,000, if a Contracting Officer (CO) of a Federal agency
certifies that such a guarantee is necessary. Paragraph (e)(3) of
section 115.12 currently requires the CO's certification to include a
statement that the small business is experiencing difficulty obtaining
a bond and that an SBA bond guarantee would be in the best interests of
the Government. SBA received a comment in response to the ANPRM stating
that requiring the CO to make this statement creates the appearance of
partiality, and as a result, COs are refusing to provide the
certification on behalf of qualified small businesses. The statute does
not require the CO to make this statement and SBA does not want to
impose requirements that are not mandated by the statute that make it
more difficult for small businesses to obtain these contracts. SBA is,
therefore, proposing to streamline paragraph (e)(3) to remove the
requirement of this statement and require only that the CO certify that
the guarantee is necessary, which as noted above is the standard set
forth in the statute. SBA is also proposing to update the manner in
which this certification may be submitted to SBA by providing that it
may be either express mailed to SBA, Office of Surety Guarantees, 409
Third Street SW, Washington, DC 20416, or submitted by email to
[email protected], along with additional information that identifies
the small business and the contract.
Section 115.14. Paragraph (a) of this section provides that, if one
of the six events listed in paragraph (a) occurs under an SBA-
guaranteed bond, the Principal and its Affiliates lose eligibility for
further SBA bond guarantees. One such event, described in paragraph
(a)(3), is when the Surety has established a claim reserve for an SBA-
guaranteed bond of at least $1,000, an amount which was set by the SBG
Program in 1996. In response to the ANPRM, SBA received 2 comments,
including one from the trade association that represents surety
companies, stating that the $1,000 threshold is too low. SBA has
considered the purpose of this provision, which is to exclude
Principals that have demonstrated an unacceptable financial risk under
a current SBA-guaranteed bond from receiving future SBA bond
guarantees. SBA agrees that the $1,000 claim reserve threshold no
longer reflects a degree of financial risk that should trigger the
Principal's ineligibility for future SBA bond guarantees. After
evaluating several factors, including inflation since 1996, the
increase in the maximum contract amount for which SBA can issue a bond
guarantee (from $1,250,000 in 1996 to $6,500,000 today), and historical
claim reserve data, SBA proposes to increase the amount of the claim
reserve that would result in the Principal and its Affiliates losing
eligibility for further SBA bond guarantees from at least $1,000 to at
least $10,000.
Sections 115.19 and 115.64. Under Sec. 115.19(f)(1)(ii), SBA is
relieved of liability under the bond guarantee if the bond was executed
``after the work under the Contract had begun'' unless the Surety
submitted, and SBA executed, SBA Form 991, ``Surety Bond Guarantee
Agreement Addendum'' with the evidence and certifications required by
Sec. 115.19(f)(1)(ii). Paragraph (f)(2)(i) currently provides that
work under a contract is considered to have begun when a Principal
``takes any action at the job site which would have exposed the Surety
to liability under applicable law had a bond been Executed (or
approved, if the Surety is legally bound by such approval) at the
time.'' In addition, under 13 CFR 115.64, a Surety participating in the
Preferred Surety Bond Program (PSB Surety) is prohibited from executing
or approving a bond ``after commencement of work under a contract''
unless the Surety obtains written approval from the Director of Office
of Surety Guarantees (OSG). To apply for such approval, the Surety must
submit a completed SBA Form 991 with the evidence and certifications
required under section 115.19(f)(1)(ii).
In response to the ANPRM, SBA received a comment requesting that
SBA clarify what constitutes ``commencement of work'' under section
115.64. SBA agrees and is proposing to amend both sections
115.19(f)(2)(i) and 115.64 to clarify that work under a contract is
considered to have begun or commenced when the contractor takes any
action related to the contract or bond that would have exposed its
Surety to liability under applicable law had a bond been executed (or
approved, if the Surety is legally bound by such approval) at the time.
The work would not have to occur ``at the job site'' to find that work
has begun or commenced under the contract. For example, work would be
deemed to have begun or commenced when the contractor takes any
financial action that would be typically covered
[[Page 52846]]
under the bond, such as purchasing supplies that will be used to
complete the contract.
Section 115.30. SBA proposes to revise the introductory language of
paragraph (d)(2) to increase the maximum amount of the contracts for
which a Prior Approval Surety would be permitted to use the Quick Bond
Guarantee Application and Agreement (SBA Form 990A) (Quick Bond
Application) from $400,000 to $500,000. SBA received eight comments to
the ANPRM suggesting this change. In response to these comments, SBA
conducted a risk assessment, considered factors such as the increasing
average contract value, and considered the potential decrease in
overall application burden on small businesses. In particular, SBA
notes that, during Fiscal Years 2015 through 2019, the average default
rate for contracts for which a Quick Bond Application was used was
2.53%, while the average default rate for contracts for which the SBA
Form 990 was used was 5.66%. SBA has determined, therefore, that
increasing the maximum contract value for using the Quick Bond
Application would minimally increase program risk while reducing costs
to Sureties and small businesses by $36,343 per year.\1\ In addition to
reducing costs, SBA hopes that this change would result in the
additional benefit of increasing overall access to the SBG Program.
---------------------------------------------------------------------------
\1\ SBA data indicates that about 742 bonds per year are issued
for contracts which are in an amount between $400,000 and $500,000,
and these contracts would be eligible for the Quick Bond Application
if the proposed rule is adopted. Assuming a reduction in time for
the Surety of 1 hour (with each hour valued at $48.98 per hour,
which is based on the median hourly wage for an insurance sales
agent of $24.49 plus 100 percent for benefits and overhead (from
https://www.bls.gov/ooh/sales/insurance-sales-agents.htm, retrieved
August 6, 2020)) in preparing the application by using SBA Form
990A, the estimated annual savings to Sureties and small businesses
would be $36,343.
---------------------------------------------------------------------------
SBA is also proposing to allow this streamlined form to be used in
additional circumstances. Paragraph (d)(2)(ii) lists the circumstances
under which the Quick Bond Application may not be used. Under paragraph
(d)(2)(ii)(D), the Quick Bond Application may not be used if the
contract includes a provision for liquidated damages that exceeds
$1,000 per day. SBA received eight comments to the ANPRM stating that
the $1,000 limitation on liquidated damages was restrictive and
inconsistent with current industry standards. Five commenters requested
that the maximum amount of liquidated damages be set at $2,500. SBA
agrees and proposes to revise paragraph (d)(2)(ii)(D) to increase the
amount of liquidated damages from a maximum of $1,000 per day to $2,500
per day in accordance with current industry standards.
In addition, paragraph (d)(2)(ii)(E) provides that the Quick Bond
Application may not be used for demolition contracts. SBA received five
comments to the ANPRM requesting that SBA remove this exclusion, with
one commenter arguing that the exclusion of all demolition contracts is
too broad and another contending that removing this exclusion would
bring the SBG Program more in line with similar fast track programs
offered in the surety industry. After considering the comments, SBA
proposes to remove demolition contracts from the list of categories
that are excluded from using the Quick Bond Application. SBA expects
that Sureties would, in their underwriting, ensure that the Principal
has obtained any permit that is required for demolition pursuant to
Federal, State or local law. If adopted, SBA will provide further
guidance on the underwriting of demolition contracts in its Standard
Operating Procedures.
Sections 115.32 and 115.67. Paragraph (d) of section 115.32 governs
when a Prior Approval Surety must notify SBA of any increase or
decrease in the contract or bond amount. It also governs when any
increase or decrease in the Principal and Surety fees that results from
a change in the contract amount must be remitted to SBA by the
Principal or Surety or will be refunded by SBA. In addition, for the
PSB Program, sections 115.67(a) and (b) govern when any increase or
decrease in the Principal and Surety fees resulting from a change in
the contract amount must be remitted or will be refunded or adjusted.
Currently, the payment for any increase in either the Principal's or
the Surety's fee is due to SBA when the total amount of the change in
that fee equals or exceeds $40, and any decrease in the fee is refunded
to the Principal or rebated/adjusted to the Surety by SBA when the
total amount of the change in the fee equals or exceeds $40.
In response to the ANPRM, SBA received four comments stating that
the $40 threshold for remittance of the fees is not aligned with
industry standards and causes additional burden and increased
processing costs on small businesses and their Sureties and agents. One
commenter stated that the industry standard for remitting and refunding
bond premium charges is $250 and a second commenter stated that the
industry standard is between $200 and $300. SBA evaluated the process
and determined that it would improve efficiencies and reduce
administrative costs to increase the threshold amount from $40 to $250
for both remitting and refunding, or rebating (or adjusting), changes
in the fee amounts. Thus, SBA proposes to revise sections 115.32(d) and
115.67 to increase the threshold amount for when an increase in the
Principal or Surety fee would be due, or for when SBA would refund or
rebate/adjust any decrease in these fees, from $40 to $250.
Section 115.33. Under this section, SBA may approve a surety
bonding line for a Prior Approval Surety under which the Surety may
execute multiple bonds for a specified small business. SBA is proposing
to revise paragraph (d)(1), which addresses the form that must be
submitted for a Bid Bond executed under a bonding line, to remove the
reference to SBA Form 994B, ``Surety Bond Guarantee Underwriting
Review'', and replace it with SBA Form 990, ``Surety Bond Guarantee
Agreement''. SBA Form 990 is the agreement between SBA and the Surety
for SBA's guarantee of the bond and is, therefore, the appropriate form
for Sureties to submit for SBA approval of a bond under a bonding line.
There is no need to separately refer to SBA Form 994B in this
regulation because that form, as the Surety indicates in its
certification in SBA Form 990, is submitted with SBA Form 990 as a
supporting document. In addition, for Final Bonds executed under a
bonding line, paragraph (d)(2) of this section currently states that
the Surety is to submit both SBA Forms 990 and 994B to SBA for
approval. For consistency and for the same reasons described above, SBA
is proposing to remove the reference to SBA Form 994B in paragraph
(d)(2).
Compliance With Executive Orders 12866, 12988, 13132, and 13563, the
Congressional Review Act (5 U.S.C. 801-808), the Paperwork Reduction
Act (44 U.S.C., Ch. 35), and the Regulatory Flexibility Act (5 U.S.C.
601-612)
Executive Order 12866
The Office of Management and Budget has determined that this rule
does not constitute a ``significant regulatory action'' under Executive
Order 12866.
Executive Order 12988
This action meets applicable standards set forth in sections 3(a)
and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize
litigation, eliminate ambiguity, and reduce burden. This action does
not have preemptive effect or retroactive effect.
[[Page 52847]]
Executive Order 13132
This rule does not have federalism implications as defined in
Executive Order 13132. It will not have substantial direct effects on
the States, on the relationship between the National Government and the
States, or on the distribution of power and responsibilities among the
various levels of government, as specified in the Executive Order. As
such it does not warrant the preparation of a Federalism Assessment.
Executive Order 13563
Executive Order 13563, Improving Regulation and Regulatory Review
(January 18, 2011), requires agencies to adopt regulations through a
process that involves public participation, and to the extent feasible,
base regulations on the open exchange of information and perspectives
from affected stakeholders and the public as a whole. As discussed
above, this proposed rule is based in part on the significant number of
comments SBA received in response to a request for input from the
public on the ANPRM published in the Federal Register in June 2019.
Congressional Review Act, 5 U.S.C. 801-808
The Office of Management and Budget has determined that this is not
a major rule under 5 U.S.C. 804(2).
Paperwork Reduction Act, 44 U.S.C., Ch. 35
SBA has determined that this proposed rule would not impose new
reporting or recordkeeping requirements under the Paperwork Reduction
Act. However, the rule would require a minor revision to SBA Form 990A,
Quick Bond Application, to conform to the change in 13 CFR 115.30
increasing the maximum amount of the contracts for which a Prior
Approval Surety may use this streamlined application. Revising the form
to change the amount from $400,000 to $500,000 will not have any impact
on the burden for this information collection, which is currently
approved under OMB Control Number 3245-0378. SBA will submit a request
to OMB to make the non-substantive change if the proposed increase is
finalized.
Regulatory Flexibility Act, 5 U.S.C. 601-612
When an agency issues a proposed rule, the Regulatory Flexibility
Act (RFA) requires the agency to ``prepare and make available for
public comment an initial regulatory flexibility analysis'' which will
``describe the impact of the proposed rule on small entities.'' (5
U.S.C. 603(a)). However, section 605 of the RFA allows an agency to
certify a rule, in lieu of preparing an analysis, if the proposed
rulemaking is not expected to have a significant economic impact on a
substantial number of small entities.
In the ANPRM (84 FR 25496), SBA solicited comments from the public
to identify which of SBA's regulations relating to the SBG program
should be repealed, replaced, or modified because they are obsolete,
unnecessary, ineffective, or burdensome. SBA also solicited comments
from the public on how SBA can improve the surety bond products,
procedures, forms, and reporting requirements of the SBG Program. SBA's
proposed revisions in response to comments received are consistent with
these goals and with increasing the consistency of these regulations
with industry standards.
Under 13 CFR 115.11, Sureties participating in SBA's SBG Program
must be a corporation listed by the U.S. Treasury as eligible to issue
bonds in connection with Federal procurement contracts. There are 256
Treasury-listed Sureties, of which 41 are program partners in the SBG
Program. SBA estimates that 12 of these 41 Surety companies are small
under SBA's size standards. In addition, most small businesses that
receive an SBA-guaranteed bond operate within the 236220 NAICS industry
code (Commercial and Institutional Building Construction). According to
the U.S. Census Bureau, there are a total of 38,079 small business
companies that operate within the 236220 NAICS code, and SBA provided
guarantees in 2017 for 1,602 of these small businesses. Even if the
number of entities that may be affected by this proposed rule is
considered significant, SBA has determined that the economic impact on
these entities would not be substantial. The proposed rules would
repeal, replace, or modify obsolete or outdated SBG Program
requirements that will have the effect of reducing the burden on
Sureties and small businesses that receive bonds under the SBG Program.
In addition, SBA anticipates that the proposed rules would streamline
outdated procedures and increase small business access to bond
guarantees. Further, the proposed rule would reduce costs \2\ to
Sureties and small businesses receiving an SBA-guaranteed bond while
any costs of adjustment to revisions are de minimis. Thus, SBA does not
expect that this rule would have a significant economic impact on its
program participants. Accordingly, the Administrator of the SBA hereby
certifies that this proposed rule would not have a significant economic
impact on a substantial number of small entities.
---------------------------------------------------------------------------
\2\ An example is the reduction in cost mentioned in the
analysis of Sec. 115.30.
---------------------------------------------------------------------------
List of Subjects in 13 CFR Part 115
Claims, Reporting and recordkeeping requirements, Small businesses,
Surety bonds.
For the reasons stated in the preamble, SBA proposes to amend 13
CFR part 115 as follows:
PART 115--SURETY BOND GUARANTEE
0
1. The authority citation for part 115 continues to read as follows:
Authority: 5 U.S.C. app 3; 15 U.S.C. 687b, 687c, 694a, 694b
note; and Pub. L. 110-246, Sec. 12079, 122 Stat. 1651.
0
2. Amend Sec. 115.10 by revising the definition of ``Contract'' to
read as follows:
Sec. 115.10 Definitions.
* * * * *
Contract means a written obligation of the Principal, including an
Order, requiring the furnishing of services, supplies, labor,
materials, machinery, equipment or construction.
A Contract:
(1) Must not prohibit a Surety from performing the Contract upon
default of the Principal;
(2) Does not include a permit, subdivision contract, lease, land
contract, evidence of debt, financial guarantee (e.g., a contract
requiring any payment by the Principal to the Obligee, except for
contracts in connection with bid and performance bonds for the sale of
timber and/or other forest products, such as biomass, that require the
Principal to pay the Obligee), warranty of performance or efficiency,
warranty of fidelity, or release of lien (other than for claims under a
guaranteed bond); and
(3) May include a maintenance agreement under the following
circumstances:
(i) The maintenance agreement is ancillary to a Contract for which
SBA is guaranteeing a bond, is performed by the same Principal, is for
a period of 2 years or less, and only covers defective workmanship or
materials that are not covered by a manufacturer's warranty. With SBA's
prior written approval, the agreement may cover a period longer than 2
years, or cover something other than defective workmanship or
materials, if a longer period or something other than defective
workmanship or materials is
[[Page 52848]]
customarily required in the relevant trade or industry; or
(ii) The maintenance agreement is stand-alone and is entered into
in connection with a Contract for which a bond was not required and
only covers defective workmanship or materials that are not covered by
a manufacturer's warranty. The agreement must cover a period of 3 years
or less that begins immediately after the Contract is complete and must
be executed prior to the completion of the Contract. It must also be
entered into with the same Principal that completed the Contract. With
SBA's prior written approval, the agreement may cover a period longer
than 3 years if a longer period is customarily required in the relevant
trade or industry.
* * * * *
0
3. Amend Sec. 115.12 by revising paragraph (e)(3) to read as follows:
Sec. 115.12 General program policies and provisions.
* * * * *
(e) * * *
(3) Federal Contracts or Orders in excess of $6,500,000 (as
adjusted for inflation in accordance with section 1908 of title 41,
United States Code). SBA is authorized to guarantee bonds on Federal
Contracts or Orders greater than $6,500,000 (as adjusted for inflation
in accordance with 41 U.S.C. 1908), but not exceeding $10,000,000, upon
a signed certification of a Federal contracting officer that the SBA
guarantee is necessary. The certification must be either express mailed
to SBA, Office of Surety Guarantees, 409 Third Street SW, Washington,
DC 20416 or sent by email to [email protected], and include the
following additional information:
(i) Name, address and telephone number of the small business;
(ii) Offer or Contract number and brief description of the
contract; and
(iii) Estimated Contract value and date of anticipated award
determination.
* * * * *
Sec. 115.14 [Amended]
0
4. In paragraph (a)(3), remove ``$1000'' and add in its place
``$10,000''.
0
5. In Sec. 115.19, revise paragraph (f)(2)(i) to read as follows:
Sec. 115.19 Denial of liability.
* * * * *
(f) * * *
(2)(i) For purposes of paragraph (f)(1)(ii) of this section, work
under a Contract is considered to have begun when a Principal takes any
action related to the contract or bond that would have exposed its
Surety to liability under applicable law had a bond been Executed (or
approved, if the Surety is legally bound by such approval) at the time.
* * * * *
Sec. 115.30 [Amended]
0
6. Amend Sec. 115.30 as follows:
0
a. In paragraph (d)(2), remove ``$400,000'' and add in its place
``$500,000'';
0
b. In paragraph (d)(2)(ii)(D), remove ``$1,000'' and add in its place
``$2,500''; and
0
c. In paragraph (d)(2)(ii)(E), remove the term ``demolition,''.
Sec. 115.32 [Amended]
0
7. In Sec. 115.32(d), remove ``$40'' wherever it appears and add in
its place ``$250.''
Sec. 115.33 [Amended]
0
8. Amend Sec. 115.33 by:
0
a. In paragraph (d)(1), removing the phrase ``a ``Surety Bond Guarantee
Underwriting Review'' (SBA Form 994B)'' and adding in its place the
phrase ``a ``Surety Bond Guarantee Agreement'' (Form 990)''; and
0
b. In paragraph (d)(2), removing the phrase ``a Surety Bond Guarantee
Underwriting Review (SBA Form 994B) and'' in the first sentence, and
removing the phrase ``these forms'' in the second sentence and adding
in its place the phrase ``this form.''
0
9. Amend Sec. 115.64 by adding a sentence at the end of the section to
read as follows:
Sec. 115.64 Timeliness requirement.
* * * For purposes of this section, work has commenced under a
Contract when a Principal takes any action related to the contract or
bond that would have exposed its Surety to liability under applicable
law had a bond been Executed (or approved, if the Surety is legally
bound by such approval) at the time.
Sec. 115.67 [Amended]
0
10. In Sec. 115.67, remove ``$40'' wherever it appears and add in its
place ``$250.''
Isabella Casillas Guzman,
Administrator.
[FR Doc. 2021-20401 Filed 9-22-21; 8:45 am]
BILLING CODE 8026-03-P