How to get the Prime bonded when sub-contractor has the history and track record?

[Darlene Collins PhD]

My client, we will call Company Able, is a new construction contractor and service disabled veteran (SVD), needs a bid bond for a $2M contract for a government RFP—and a performance/pay bond to follow. He is going into a teaming agreement with a very large well established firm, we will call Company Baker, to get a Service Disabled Veteran-Owned Small Business (SDVOSB) set aside contract from the government.

The government requires that the SDV must be designated as the prime contractor, do at least 25% of the work, and own at least 51% interest in the company. The two companies are considering forming a new entity for this purpose, we will call Company Charlie. The RFP requires the bond to be issued in the name of the SDVOSB. The current surety agency for Company Baker is hesitant (and stuck in a lengthy review process) to issue the bond because it does not meet their typical parameters.

How can Company Charlie secure the required bonding give it is a new company with no history yet, the principle will be the SVD who also has no real history since Company Able was recently formed, and the Company Baker who has the track record is taking a lesser role? No bad credit issue for anyone. Are you a good source for my client, if not, then who may help?

I work as a non-profit consultant in a vet biz resource center.

[Admin]

Darlene, the company will not qualify for the bond amount using standard bond programs.

The only chance is through the SBA bond program. Our agency doesn't handle SBA bonds, but there are many who do...


Try to find an agency that specializes in the SBA program, it is your best bet!