INFRASTRUCTURE ACT BOOSTS CONSTRUCTION & BONDS - AMPLIFIES SMALL & EMERGING CONTRACTORS
May 4, 2022
by Steve Dorenkamp, Vice President, Specialty Solutions
Making sure infrastructure projects are financed securely is where surety bonding comes in and there is ample capacity for surety credit. Small and emerging contractors, especially those that are minority owned, are a special focus of the Infrastructure Act. It stipulates that no less than ten percent of the money be spent awarding federal Department of Transportation (DOT) contracts to Disadvantaged Business Enterprise (DBE) program participants. It also stipulates that primary DOT contractors pay their sub-contractors within 30 days. It’s clear that lawmakers recognize the importance of prompt payment for the survival of small and emerging contractors.
Some surety companies provide avenues or tools for small and emerging contractors to increase their capacity and gain access to these Government Contracts. These tools may include collateral options, funds administration or partnering with the various SBA Bond Programs. These are examples of the surety industry assisting small businesses to expand their operations utilizing sources not always available. This can provide the foundation for contractors to enter the competitive marketplace.