A new program from Louisiana Economic Development (LED) could help small construction businesses get a shot at major construction projects in the state, reported Houma Today.
Currently, small or newer construction companies often have difficulty securing work for major contractors on big projects because of a lack of bonding capacity. The LED’s Bonding Assistance Program is designed to help small, disadvantaged, and minority-, woman-, and veteran-owned businesses secure the bid, payment, and performance bonds that are required for such work opportunities.
Bid bonds guarantee that the contractor will enter the contract if they win the bid; performance bonds guarantee the work will be performed as specified; and payment bonds guarantee the contractor will pay for services and materials. Louisiana will guarantee the first 25 percent of the contract’s value—up to $100,000—for businesses that qualify for the program, and LED will provide a letter of credit to the surety company providing the bond.
“A strong Louisiana economy depends on Louisiana small businesses securing work for themselves and their employees,” LED Secretary Don Pierson said in a news release. “This program is a tool to help qualified small businesses in the construction arena to grow and thrive by helping address a major obstacle—gaining access to performance bonds. LED is happy to provide this enhanced opportunity and technical assistance to Louisiana’s small businesses. This is an important pathway, which will allow them to take advantage of the robust construction opportunities throughout the state.”
For more information about the program and the process of getting started, visit www.OpportunityLouisiana.com/BAP.