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Subtitle C--Matters Relating to Small Business Concerns

P. L. 112-

House Conference Report 112-705


(a) Maximum Bond Amount- Section 411(a)(1) of the Small Business Investment Act of 1958 (15 U.S.C. 694b(a)(1)) is amended--

(1) by inserting `(A)' after `(1)';

(2) by striking `does not exceed' and all that follows through the period at the end, and inserting `does not exceed $6,500,000, as adjusted for inflation in accordance with section 1908 of title 41, United States Code.'; and

(3) by adding at the end the following:

`(B) The Administrator may guarantee a surety under subparagraph (A) for a total work order or contract amount that does not exceed $10,000,000, if a contracting officer of a Federal agency certifies that such a guarantee is necessary.'.

(b) Denial of Liability- Section 411 of the Small Business Investment Act of 1958 (15 U.S.C. 694b) is amended--

(1) by striking subsection (e) and inserting the following:

`(e) Reimbursement of Surety; Conditions- Pursuant to any such guarantee or agreement, the Administration shall reimburse the surety, as provided in subsection (c) of this section, except that the Administration shall be relieved of liability (in whole or in part within the discretion of the Administration) if--

`(1) the surety obtained such guarantee or agreement, or applied for such reimbursement, by fraud or material misrepresentation,

`(2) the total contract amount at the time of execution of the bond or bonds exceeds $6,500,000,

`(3) the surety has breached a material term or condition of such guarantee agreement, or

`(4) the surety has substantially violated the regulations promulgated by the Administration pursuant to subsection (d).'; and

(2) by inserting after subsection (i) the following:

`(j) For bonds made or executed with the prior approval of the Administration, the Administration shall not deny liability to a surety based upon material information that was provided as part of the guarantee application.'.

(c) Size Standards- Section 410 of the Small Business Investment Act of 1958 (15 U.S.C. 694a) is amended by inserting after paragraph (8) the following:

`(9) Notwithstanding any other provision of law or any rule, regulation, or order of the Administration, for purpose of sections 410, 411, and 412 the term `small business concern' means a business concern that meets the size standard for the primary industry in which such business concern, and the affiliates of such business concern, is engaged, as determined by the Administrator in accordance with the North American Industry Classification System.'.

Surety bonds (sec. 1695)

The House bill contained a provision (sec. 1695) that would raise the maximum surety bond amount that may be guaranteed by the Small Business Administration.

The Senate amendment contained no similar provision.

The Senate recedes.

House Report 112-479


This section would amend section 694b of title 15, United States Code, by raising the maximum surety bond amount from $2.0 million to $6.5 million. This section would also allow the Administrator of the Small Business Administration to guarantee a surety bond of up to $10.0 million if a contracting officer of a Federal agency certifies that such a guarantee is necessary. The committee is aware that many contracts awarded by the Department of Defense are suitable for small business performance, but may exceed the proposed $6.5 million threshold for bonding. The committee believes that providing authority for the Administrator to guarantee a surety bond of up to $10.0 million in certain cases may increase small business contracting opportunities with the Department of Defense.