Technical corrections only. The engrossed version (v3) is identical in substantive text to the reported version (v2), specifically the amended text that was reported. The changes reflect the procedural transition from a reported bill to an engrossed bill, with no substantive policy modifications.
Expanding the Surety Bond Program Act of 2025
- Sponsor
- Sen. Markey, Edward J. [D-MA]
- Committees
- Small Business and Entrepreneurship Committee (primary)
- Last action
- May 4, 2026
Bottom line
The bill aims to expand opportunities for small businesses to secure larger contracts by increasing surety bond limits, while simultaneously enhancing program oversight and fiscal management through new reporting and spending controls.
What it actually does
This bill significantly expands the Small Business Administration's (SBA) Surety Bond Program by increasing the maximum contract amount eligible for a bond guarantee from $6,500,000 to $18,000,000. It also introduces a mechanism to temporarily reduce this limit by 33% if the SBA Administrator requests supplemental funding for the program. Furthermore, the bill caps administrative expenses from the program's revolving fund at 2% and mandates new annual reporting requirements for the SBA, along with a Government Accountability Office (GAO) review of program processes.
Proponents argue
Supporters argue that this legislation is crucial for enabling small businesses to compete for larger federal, state, and local contracts, which are often out of reach due to current bond limits. They contend that the increased limit will foster economic growth, create jobs, and ensure the Surety Bond Program remains relevant and effective. Proponents also highlight the enhanced transparency and fiscal safeguards as vital for responsible program management.
Opponents contend
Critics might express concerns that significantly increasing the maximum bond limit could expose the federal government's revolving fund to greater financial risk, particularly if there is an increase in defaults on larger contracts. Some may also argue that the new reporting requirements could impose an undue administrative burden on the SBA, potentially diverting resources from core program functions.
The bill is concise and its core provisions are readily understandable, allowing for quick evaluation by an informed reader.
Section 2(1)(A) of S. 2232, amending Section 411(a)(1)(A) of the Small Business Investment Act of 1958
Increases Surety Bond Program Maximum Contract Amount
This provision raises the maximum contract amount for which the Small Business Administration (SBA) can guarantee a surety bond from $6,500,000 to $18,000,000. This significant increase allows small businesses to bid on a much wider range of larger federal, state, and local contracts that require surety bonds, thereby expanding their market opportunities.
Supporters argue
Supporters argue this expansion is crucial for small businesses to compete effectively for larger public and private sector contracts, fostering growth and job creation that would otherwise be inaccessible.
Critics contend
Critics might argue that significantly increasing the limit could expose the federal government to greater financial risk if more bonds default, potentially straining the revolving fund and increasing taxpayer liability.
Tradeoffs
This provision balances the goal of supporting small business growth and competitiveness with the need to manage potential financial risk to the federal guarantee program.
Section 2(1)(B) of S. 2232, amending Section 411(a)(1)(B) of the Small Business Investment Act of 1958
Establishes Temporary Reduction in Bond Limit Upon Supplemental Funding Request
If the SBA Administrator submits a formal request for supplemental funds for the Surety Bond Program, the maximum contract amount (normally $18,000,000) will be temporarily reduced by 33% (to $12,060,000). This reduction remains in effect for 12 months after the request, or 150 days after the requested funds are provided or no longer needed, provided the Administrator attests to sufficient fee collection for a deficit-neutral fund.
Section 2(2)(C) of S. 2232, inserting new Section 412(b) into the Small Business Investment Act of 1958
Limits Administrative Expenses from Revolving Fund
This provision caps the amount of the Surety Bond Program's revolving fund that can be obligated for administrative expenses at 2% of the fund's balance on the first day of each fiscal year. These expenses include costs related to information technology, systems, outreach activities, and relevant contracts, aiming to ensure the majority of the fund supports bond guarantees.
Section 2(3) of S. 2232, adding new Section 413(a) to the Small Business Investment Act of 1958
Mandates Annual Report on Surety Bond Program
This provision requires the SBA Administrator to submit a detailed annual report to the Senate and House Small Business Committees within 90 days of each fiscal year. The report must cover the program's status and activities, including the total dollar value of guarantees, claims paid (broken down by program type), the average bond size, and comprehensive information on the financial health and solvency of the revolving fund, including administrative expenses.
Section 2(3) of S. 2232, adding new Section 413(b) to the Small Business Investment Act of 1958
Mandates GAO Report on Surety Bond Program Processes
This provision requires the Comptroller General of the United States (GAO) to submit a report within 270 days of the bill's enactment. This report will assess the SBA's current processes for approving applicants to the Surety Bond Program and will include recommendations for improving program efficiency and simplifying paperwork requirements for small businesses.