Tony joined the SBA with an extensive background in marketing, sales, and general management in the private sector. Early in his career, he worked for seven years with Kraft/General Foods in...
Preferred Surety Bond Program
The Preferred Surety Bond (PSB) Program was created to encourage larger surety companies to expand their efforts to help small businesses. SBA gives selected sureties the authority to issue, monitor and service bonds without prior SBA approval. Each participating company has a guarantee limit with the SBA. PSB surety companies serve more experienced contractors that demonstrate the potential for growth and consistently have more active work programs. Sureties participating in this program cannot participate in the Prior Approval program.
A surety company interested in participating in SBA’s PSB Program must meet the following guidelines:
Surety must be a corporation approved by the U.S. Treasury to issue bonds in connection with Federal contracts (13 CFR 115.11).
Surety must have an underwriting limitation of at least $2,000,000 on the U.S. Treasury Department list of acceptable sureties (For more information, see 13 CFR 115.60).
Surety cannot charge a bond premium in excess of that authorized by the appropriate state insurance department, or impose any non-premium fee unless such a fee is permitted by applicable state law and approved by SBA (13 CFR 115.60).
Premium income from contract bonds guaranteed by SBA can equal no more than one-quarter of the total contract bond premium income of the surety (13 CFR 115.60).
The vesting of underwriting authority for an SBA guaranteed bond will be limited to permanent employees of the surety (13 CFR 115.60).
The vesting of final settlement authority for claims and recovery will lie only in employees of the surety’s permanent claims department (13 CFR 115.60).
Compliance with Code of Federal Regulations Part 115, Subparts A & C (13 CFR 115).
Applications for SBA’s PSB Program must include the following information:
Identification of the corporate entity that is applying, the names and titles of key executives, and points of contact responsible for management and administration of its programs.
A summary statement describing any ongoing or planned mergers, acquisitions or other changes in organizational structure or key management positions that may influence participation and performance in the program.
A mission/vision statement addressing the reasons for requesting authorization to participate in the PBS Program, and organizational goals and objectives relative to program.
Applicant performance for each for the past three years:
Number of bonds issued and total dollar value.
Number of contract defaults and the total dollar value.
Total dollar value of recoveries for each year.
Loss rate for each year.
Projected annual SBA bond guarantee activity, to include estimates of the number of bonds and total dollar value, over each of the first three years of program participation.
Narrative summary of the standards, processes, and procedures for underwriting. (Most applicants submit a copy of their underwriting manual.)
Narrative summary of the standards, processes and procedures for claims and recovery. (Most applicants submit a copy of manual(s).)
Applications should be sent to:
Office of Surety Guarantees
Attn: Mr. Frank Lalumiere
409 Third Street S.W.
Washington, D.C. 20416
For More Information
For more information, contact the Office of Surety Guarantees (OSG).