Small Business: Access to Surety Bonds (Testimony, 04/05/95,
GAO/T-RCED-95-150).

This testimony discusses the use of surety bonds in the construction
industry and presents the results of GAO's survey of small construction
firms.  The law requires contractors to provide surety bonds on all
federal construction contracts worth more than $25,0000.  Most state and
local governments and some private-sector lending also require surety
bonds.  Surety companies decided whether firms have the experience and
financial resources to do a given job and quality for a bond.  Small
businesses argue that bonding decisions made by surety companies often
impede the development of small firms, especially those owned by women
and minorities.  Recent legislation directed GAO to survey small
construction firms on their experiences in obtaining surety bonds.  This
report discusses (1) the percentage of firms that obtained bonds, (2)
reasons some firms were given for denying the bonds, (3) additional
conditions some firms had to meet to obtain surety bonds, and (4)
changes in requirements for surety bonds on federal construction
contracts.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-RCED-95-150
     TITLE:  Small Business: Access to Surety Bonds
      DATE:  04/05/95
   SUBJECT:  Surety bonds
             Construction industry
             Minority businesses
             Construction contracts
             Women-owned businesses
             Bid guarantees
             Insurance
             Financial analysis
             Small business contractors

             
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