Community Development Papers

The Impact of Surety Bonding on American Indian and Tribally Owned Contractors

Andrew Twite
Ahna Minge

Published January 31, 2014

Abstract
This paper assesses the impact of surety bonding on American Indian contractors and tribally owned contracting firms. We identify common barriers to acquiring bonding, including both non-American Indian-specific (e.g., challenges in accessing capital) and American Indian-specific barriers (e.g., issues resulting from trust land and sovereign immunity). We also include case studies of successful American Indian-owned contracting firms to identify techniques for bonding acquisition. We then estimate a series of simple proportionality models, which suggest that American Indian contractors living off reservations receive a disproportionately large share of federal construction contracts relative to their population, while American Indian contractors based on reservations receive a disproportionately small share of federal construction contracts. We conclude with a discussion of the Small Business Administration’s Surety Bond Guarantee Program, including a presentation of policy options to improve access to surety bonds for American Indian contractors and tribally owned contracting firms.

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