This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

52844 

Vol. 86, No. 182 

Thursday, September 23, 2021 

SMALL BUSINESS ADMINISTRATION 

13 CFR Part 115 

RIN 3245–AH08 

Regulatory Reform Initiative: 

Streamlining Surety Bond Guarantee 

Program 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Small Business 

Administration (SBA) is proposing to 

revise various regulations related to 

SBA’s Surety Bond Guarantee (SBG) 

program because they are obsolete, 

unnecessary, ineffective, or 

burdensome. Additionally, SBA is 

proposing revisions to clarify and 

modernize certain regulations and 

conform them to industry standards. 

These proposed changes are in response 

to comments received from SBA’s 

Advance Notice of Proposed 

Rulemaking that was published on June 

3, 2019. 

DATES: Comments must be received on 

or before November 22, 2021. 

ADDRESSES: You may submit comments, 

identified by RIN 3245–AH08, using any 

of the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Search for the rule 

by RIN 3245–AH08 and follow the 

instructions for submitting comments. 

• Mail: Jermaine Perry, Management 

Analyst, Office of Surety Guarantees, 

U.S. Small Business Administration, 

409 3rd Street SW, 8th Floor, 

Washington, DC 20416. 

SBA will post all comments on http:// 

www.regulations.gov. If you wish to 

submit confidential business 

information (CBI) as defined in the User 

Notice at http://www.regulations.gov, 

please submit the information to 

Jermaine Perry, Management Analyst, 

Office of Surety Guarantees, U.S. Small 

Business Administration, 409 3rd Street 

SW, 8th Floor, Washington, DC 20416. 

Highlight the information that you 

consider to be CBI and explain why you 

believe this information should be held 

confidential. SBA will review the 

information and make the final 

determination as to whether to publish 

the information. 

FOR FURTHER INFORMATION CONTACT: 

Jermaine Perry, Management Analyst, 

Office of Surety Guarantees at (202) 

401–8275 or Jermaine.perry@sba.gov. 

SUPPLEMENTARY INFORMATION: 

A. General Information 

The U.S. Small Business 

Administration (SBA) guarantees bid, 

payment, and performance bonds for 

small and emerging contractors who 

cannot obtain surety bonds through 

regular commercial channels. SBA’s 

guarantee, authorized pursuant to part B 

of title IV of the Small Business 

Investment Act of 1958, 15 U.S.C. 694a 

et seq., gives Sureties an incentive to 

provide bonding for small businesses 

and thereby assists small businesses in 

obtaining greater access to contracting 

opportunities. SBA’s guarantee is an 

agreement between a Surety and SBA 

that SBA will assume a certain 

percentage of the Surety’s loss should a 

contractor default on the underlying 

contract. SBA is authorized to guarantee 

a Surety for a contract up to $6.5 million 

and, with the certification of a 

contracting officer of a Federal agency, 

up to $10 million. For more information 

about SBA’s Surety Bond Guarantee 

Program, see https://www.sba.gov/ 

funding-programs/surety-bonds. 

This rulemaking addresses the 

regulations governing the Surety Bond 

Guarantee (SBG) Program codified in 13 

CFR part 115. Subpart A contains 

provisions that apply to all surety bond 

guarantees, subpart B contains 

provisions that apply to the bond 

guarantees subject to prior approval by 

SBA, and subpart C contains provisions 

that apply to the bond guarantees that 

Preferred Surety Bond Sureties may 

issue under delegated authority. 

Federal agencies have an ongoing 

responsibility to ensure that the 

regulations they issue do not have an 

adverse economic impact on those 

affected by those rules. For example, 

under Executive Order 13563, 

Improving Regulation and Regulatory 

Review (January 18, 2011), agencies are 

obligated to conduct a retrospective 

review of their regulations to seek more 

affordable, less intrusive means to 

achieve policy goals, and to give careful 

consideration to the benefits and costs 

of their regulations. This executive 

order also requires agencies to review 

existing rules to remove outdated 

regulations that stifle job creation and 

make the U.S. economy less 

competitive. 

B. Comments Received in Response to 

Advance Notice of Proposed 

Rulemaking 

On June 3, 2019, SBA published an 

Advance Notice of Proposed 

Rulemaking (ANPRM) in the Federal 

Register (84 FR 25496) seeking input 

from the public in identifying 

regulations under the SBG Program that 

affected parties believed should be 

repealed, replaced, or modified because 

they are obsolete, unnecessary, 

ineffective, or burdensome. SBA also 

solicited comments from the public on 

how SBA can improve the surety bond 

products, procedures, forms, and 

reporting requirements of the SBG 

Program. The comment period ended on 

August 2, 2019. SBA has reviewed the 

54 comments submitted by the public in 

response. After considering these 

comments and reviewing the regulations 

in 13 CFR part 115, SBA is proposing 

that the regulations identified below in 

the section-by-section analysis be 

revised. 

C. Section-by-Section Analysis 

Section 115.10. Under the current 

definition of ‘‘Contract’’ in this section, 

a Contract may include a maintenance 

agreement that is ancillary to a Contract 

for which SBA is guaranteeing the bond 

(‘‘ancillary maintenance agreement’’). 

SBA is proposing to clarify the 

definition for these ancillary 

maintenance agreements and to also 

expand the definition of Contract to 

include stand-alone maintenance 

agreements. 

Under the current definition, SBA 

will guarantee the bond for a 

maintenance agreement if the agreement 

is for 2 years or less and covers 

defective workmanship or materials 

only. It has been SBA’s long-standing 

interpretation that the maintenance 

agreement must be ancillary to the 

Contract for which SBA is guaranteeing 

the bond and may not cover defective 

workmanship or materials that is 

covered by a manufacturer’s warranty. 

The current definition also provides 

that, with SBA’s written approval, the 

term of a maintenance agreement can be 


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longer than 2 years for defective 

workmanship or materials or cover 

something other than defective 

workmanship or materials if the 

agreement is ancillary to the Contract 

for which SBA is guaranteeing a bond, 

is performed by the same Principal, and 

is customarily required in the relevant 

trade or industry. 

For clarity, SBA is proposing to 

modify the existing definition by 

expressly applying the following 

requirements to all ancillary 

maintenance agreements: (1) The 

agreement must be ancillary to a 

Contract for which SBA is guaranteeing 

a bond; (2) the agreement must be 

performed by the same Principal; and 

(3) the agreement may only cover 

defective workmanship or materials that 

are not covered by a manufacturer’s 

warranty. With SBA’s prior written 

approval, the agreement covering 

defective workmanship or materials 

may be for a term longer than 2 years, 

or the agreement may cover something 

other than defective workmanship or 

materials, if such agreement is 

customarily required in the relevant 

trade or industry. 

SBA received a comment in response 

to the ANPRM that requested that SBA 

consider expanding the definition of 

Contract to include stand-alone 

maintenance contracts. The commenter 

stated that bonds for stand-alone 

maintenance contracts are commonly 

written and that excluding these types 

of bonds from SBA’s surety bond 

guarantee program seems unjustified. 

SBA agrees that it can offer a bond 

guarantee for these types of agreements 

and is proposing to create a new 

category under the definition of 

Contract to include them, provided that 

the stand-alone maintenance agreement: 

(1) Is entered into in connection with a 

Contract for which a bond was not 

required; (2) only covers defective 

workmanship or materials that are not 

covered by a manufacturer’s warranty; 

(3) is entered into with the same 

Principal; and (4) covers a period of 3 

years or less that begins immediately 

after the Contract is complete and was 

executed prior to the completion of the 

Contract. With SBA’s prior written 

approval, the agreement may cover a 

period longer than 3 years if such 

agreement is customarily required in the 

relevant trade or industry. 

SBA also received a comment 

suggesting that SBA reorganize the 

definition of ‘‘Contract’’ so that it is 

shorter and broken into several parts. 

SBA agrees that it would help to clarify 

the definition by reorganizing it into 

several parts and is proposing to do so. 

Section 115.12. Under section 

411(a)(1)(B) of the Small Business 

Investment Act of 1958, SBA may 

guarantee a surety bond for a total work 

order or contract amount that is greater 

than $6,500,000 (as adjusted for 

inflation under 41 U.S.C. 1908), but not 

exceeding $10,000,000, if a Contracting 

Officer (CO) of a Federal agency certifies 

that such a guarantee is necessary. 

Paragraph (e)(3) of section 115.12 

currently requires the CO’s certification 

to include a statement that the small 

business is experiencing difficulty 

obtaining a bond and that an SBA bond 

guarantee would be in the best interests 

of the Government. SBA received a 

comment in response to the ANPRM 

stating that requiring the CO to make 

this statement creates the appearance of 

partiality, and as a result, COs are 

refusing to provide the certification on 

behalf of qualified small businesses. The 

statute does not require the CO to make 

this statement and SBA does not want 

to impose requirements that are not 

mandated by the statute that make it 

more difficult for small businesses to 

obtain these contracts. SBA is, therefore, 

proposing to streamline paragraph (e)(3) 

to remove the requirement of this 

statement and require only that the CO 

certify that the guarantee is necessary, 

which as noted above is the standard set 

forth in the statute. SBA is also 

proposing to update the manner in 

which this certification may be 

submitted to SBA by providing that it 

may be either express mailed to SBA, 

Office of Surety Guarantees, 409 Third 

Street SW, Washington, DC 20416, or 

submitted by email to suretybonds@

sba.gov, along with additional 

information that identifies the small 

business and the contract. 

Section 115.14. Paragraph (a) of this 

section provides that, if one of the six 

events listed in paragraph (a) occurs 

under an SBA-guaranteed bond, the 

Principal and its Affiliates lose 

eligibility for further SBA bond 

guarantees. One such event, described 

in paragraph (a)(3), is when the Surety 

has established a claim reserve for an 

SBA-guaranteed bond of at least $1,000, 

an amount which was set by the SBG 

Program in 1996. In response to the 

ANPRM, SBA received 2 comments, 

including one from the trade association 

that represents surety companies, 

stating that the $1,000 threshold is too 

low. SBA has considered the purpose of 

this provision, which is to exclude 

Principals that have demonstrated an 

unacceptable financial risk under a 

current SBA-guaranteed bond from 

receiving future SBA bond guarantees. 

SBA agrees that the $1,000 claim reserve 

threshold no longer reflects a degree of 

financial risk that should trigger the 

Principal’s ineligibility for future SBA 

bond guarantees. After evaluating 

several factors, including inflation since 

1996, the increase in the maximum 

contract amount for which SBA can 

issue a bond guarantee (from $1,250,000 

in 1996 to $6,500,000 today), and 

historical claim reserve data, SBA 

proposes to increase the amount of the 

claim reserve that would result in the 

Principal and its Affiliates losing 

eligibility for further SBA bond 

guarantees from at least $1,000 to at 

least $10,000. 

Sections 115.19 and 115.64. Under 

§ 115.19(f)(1)(ii), SBA is relieved of 

liability under the bond guarantee if the 

bond was executed ‘‘after the work 

under the Contract had begun’’ unless 

the Surety submitted, and SBA 

executed, SBA Form 991, ‘‘Surety Bond 

Guarantee Agreement Addendum’’ with 

the evidence and certifications required 

by § 115.19(f)(1)(ii). Paragraph (f)(2)(i) 

currently provides that work under a 

contract is considered to have begun 

when a Principal ‘‘takes any action at 

the job site which would have exposed 

the Surety to liability under applicable 

law had a bond been Executed (or 

approved, if the Surety is legally bound 

by such approval) at the time.’’ In 

addition, under 13 CFR 115.64, a Surety 

participating in the Preferred Surety 

Bond Program (PSB Surety) is 

prohibited from executing or approving 

a bond ‘‘after commencement of work 

under a contract’’ unless the Surety 

obtains written approval from the 

Director of Office of Surety Guarantees 

(OSG). To apply for such approval, the 

Surety must submit a completed SBA 

Form 991 with the evidence and 

certifications required under section 

115.19(f)(1)(ii). 

In response to the ANPRM, SBA 

received a comment requesting that SBA 

clarify what constitutes 

‘‘commencement of work’’ under 

section 115.64. SBA agrees and is 

proposing to amend both sections 

115.19(f)(2)(i) and 115.64 to clarify that 

work under a contract is considered to 

have begun or commenced when the 

contractor takes any action related to the 

contract or bond that would have 

exposed its Surety to liability under 

applicable law had a bond been 

executed (or approved, if the Surety is 

legally bound by such approval) at the 

time. The work would not have to occur 

‘‘at the job site’’ to find that work has 

begun or commenced under the 

contract. For example, work would be 

deemed to have begun or commenced 

when the contractor takes any financial 

action that would be typically covered 


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1SBA data indicates that about 742 bonds per 

year are issued for contracts which are in an 

amount between $400,000 and $500,000, and these 

contracts would be eligible for the Quick Bond 

Application if the proposed rule is adopted. 

Assuming a reduction in time for the Surety of 1 

hour (with each hour valued at $48.98 per hour, 

which is based on the median hourly wage for an 

insurance sales agent of $24.49 plus 100 percent for 

benefits and overhead (from https://www.bls.gov/ 

ooh/sales/insurance-sales-agents.htm, retrieved 

August 6, 2020)) in preparing the application by 

using SBA Form 990A, the estimated annual 

savings to Sureties and small businesses would be 

$36,343. 

under the bond, such as purchasing 

supplies that will be used to complete 

the contract. 

Section 115.30. SBA proposes to 

revise the introductory language of 

paragraph (d)(2) to increase the 

maximum amount of the contracts for 

which a Prior Approval Surety would be 

permitted to use the Quick Bond 

Guarantee Application and Agreement 

(SBA Form 990A) (Quick Bond 

Application) from $400,000 to $500,000. 

SBA received eight comments to the 

ANPRM suggesting this change. In 

response to these comments, SBA 

conducted a risk assessment, considered 

factors such as the increasing average 

contract value, and considered the 

potential decrease in overall application 

burden on small businesses. In 

particular, SBA notes that, during Fiscal 

Years 2015 through 2019, the average 

default rate for contracts for which a 

Quick Bond Application was used was 

2.53%, while the average default rate for 

contracts for which the SBA Form 990 

was used was 5.66%. SBA has 

determined, therefore, that increasing 

the maximum contract value for using 

the Quick Bond Application would 

minimally increase program risk while 

reducing costs to Sureties and small 

businesses by $36,343 per year.1 In 

addition to reducing costs, SBA hopes 

that this change would result in the 

additional benefit of increasing overall 

access to the SBG Program. 

SBA is also proposing to allow this 

streamlined form to be used in 

additional circumstances. Paragraph 

(d)(2)(ii) lists the circumstances under 

which the Quick Bond Application may 

not be used. Under paragraph 

(d)(2)(ii)(D), the Quick Bond 

Application may not be used if the 

contract includes a provision for 

liquidated damages that exceeds $1,000 

per day. SBA received eight comments 

to the ANPRM stating that the $1,000 

limitation on liquidated damages was 

restrictive and inconsistent with current 

industry standards. Five commenters 

requested that the maximum amount of 

liquidated damages be set at $2,500. 

SBA agrees and proposes to revise 

paragraph (d)(2)(ii)(D) to increase the 

amount of liquidated damages from a 

maximum of $1,000 per day to $2,500 

per day in accordance with current 

industry standards. 

In addition, paragraph (d)(2)(ii)(E) 

provides that the Quick Bond 

Application may not be used for 

demolition contracts. SBA received five 

comments to the ANPRM requesting 

that SBA remove this exclusion, with 

one commenter arguing that the 

exclusion of all demolition contracts is 

too broad and another contending that 

removing this exclusion would bring the 

SBG Program more in line with similar 

fast track programs offered in the surety 

industry. After considering the 

comments, SBA proposes to remove 

demolition contracts from the list of 

categories that are excluded from using 

the Quick Bond Application. SBA 

expects that Sureties would, in their 

underwriting, ensure that the Principal 

has obtained any permit that is required 

for demolition pursuant to Federal, 

State or local law. If adopted, SBA will 

provide further guidance on the 

underwriting of demolition contracts in 

its Standard Operating Procedures. 

Sections 115.32 and 115.67. 

Paragraph (d) of section 115.32 governs 

when a Prior Approval Surety must 

notify SBA of any increase or decrease 

in the contract or bond amount. It also 

governs when any increase or decrease 

in the Principal and Surety fees that 

results from a change in the contract 

amount must be remitted to SBA by the 

Principal or Surety or will be refunded 

by SBA. In addition, for the PSB 

Program, sections 115.67(a) and (b) 

govern when any increase or decrease in 

the Principal and Surety fees resulting 

from a change in the contract amount 

must be remitted or will be refunded or 

adjusted. Currently, the payment for any 

increase in either the Principal’s or the 

Surety’s fee is due to SBA when the 

total amount of the change in that fee 

equals or exceeds $40, and any decrease 

in the fee is refunded to the Principal or 

rebated/adjusted to the Surety by SBA 

when the total amount of the change in 

the fee equals or exceeds $40. 

In response to the ANPRM, SBA 

received four comments stating that the 

$40 threshold for remittance of the fees 

is not aligned with industry standards 

and causes additional burden and 

increased processing costs on small 

businesses and their Sureties and 

agents. One commenter stated that the 

industry standard for remitting and 

refunding bond premium charges is 

$250 and a second commenter stated 

that the industry standard is between 

$200 and $300. SBA evaluated the 

process and determined that it would 

improve efficiencies and reduce 

administrative costs to increase the 

threshold amount from $40 to $250 for 

both remitting and refunding, or 

rebating (or adjusting), changes in the 

fee amounts. Thus, SBA proposes to 

revise sections 115.32(d) and 115.67 to 

increase the threshold amount for when 

an increase in the Principal or Surety 

fee would be due, or for when SBA 

would refund or rebate/adjust any 

decrease in these fees, from $40 to $250. 

Section 115.33. Under this section, 

SBA may approve a surety bonding line 

for a Prior Approval Surety under which 

the Surety may execute multiple bonds 

for a specified small business. SBA is 

proposing to revise paragraph (d)(1), 

which addresses the form that must be 

submitted for a Bid Bond executed 

under a bonding line, to remove the 

reference to SBA Form 994B, ‘‘Surety 

Bond Guarantee Underwriting Review’’, 

and replace it with SBA Form 990, 

‘‘Surety Bond Guarantee Agreement’’. 

SBA Form 990 is the agreement between 

SBA and the Surety for SBA’s guarantee 

of the bond and is, therefore, the 

appropriate form for Sureties to submit 

for SBA approval of a bond under a 

bonding line. There is no need to 

separately refer to SBA Form 994B in 

this regulation because that form, as the 

Surety indicates in its certification in 

SBA Form 990, is submitted with SBA 

Form 990 as a supporting document. In 

addition, for Final Bonds executed 

under a bonding line, paragraph (d)(2) 

of this section currently states that the 

Surety is to submit both SBA Forms 990 

and 994B to SBA for approval. For 

consistency and for the same reasons 

described above, SBA is proposing to 

remove the reference to SBA Form 994B 

in paragraph (d)(2). 

Compliance With Executive Orders 

12866, 12988, 13132, and 13563, the 

Congressional Review Act (5 U.S.C. 801– 

808), the Paperwork Reduction Act (44 

U.S.C., Ch. 35), and the Regulatory 

Flexibility Act (5 U.S.C. 601–612) 

Executive Order 12866 

The Office of Management and Budget 

has determined that this rule does not 

constitute a ‘‘significant regulatory 

action’’ under Executive Order 12866. 

Executive Order 12988 

This action meets applicable 

standards set forth in sections 3(a) and 

3(b)(2) of Executive Order 12988, Civil 

Justice Reform, to minimize litigation, 

eliminate ambiguity, and reduce 

burden. This action does not have 

preemptive effect or retroactive effect. 


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2An example is the reduction in cost mentioned 

in the analysis of § 115.30. 

Executive Order 13132 

This rule does not have federalism 

implications as defined in Executive 

Order 13132. It will not have substantial 

direct effects on the States, on the 

relationship between the National 

Government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government, as specified in the 

Executive Order. As such it does not 

warrant the preparation of a Federalism 

Assessment. 

Executive Order 13563 

Executive Order 13563, Improving 

Regulation and Regulatory Review 

(January 18, 2011), requires agencies to 

adopt regulations through a process that 

involves public participation, and to the 

extent feasible, base regulations on the 

open exchange of information and 

perspectives from affected stakeholders 

and the public as a whole. As discussed 

above, this proposed rule is based in 

part on the significant number of 

comments SBA received in response to 

a request for input from the public on 

the ANPRM published in the Federal 

Register in June 2019. 

Congressional Review Act, 5 U.S.C. 

801–808 

The Office of Management and Budget 

has determined that this is not a major 

rule under 5 U.S.C. 804(2). 

Paperwork Reduction Act, 44 U.S.C., 

Ch. 35 

SBA has determined that this 

proposed rule would not impose new 

reporting or recordkeeping requirements 

under the Paperwork Reduction Act. 

However, the rule would require a 

minor revision to SBA Form 990A, 

Quick Bond Application, to conform to 

the change in 13 CFR 115.30 increasing 

the maximum amount of the contracts 

for which a Prior Approval Surety may 

use this streamlined application. 

Revising the form to change the amount 

from $400,000 to $500,000 will not have 

any impact on the burden for this 

information collection, which is 

currently approved under OMB Control 

Number 3245–0378. SBA will submit a 

request to OMB to make the nonsubstantive change if the proposed 

increase is finalized. 

Regulatory Flexibility Act, 5 U.S.C. 601– 

612 

When an agency issues a proposed 

rule, the Regulatory Flexibility Act 

(RFA) requires the agency to ‘‘prepare 

and make available for public comment 

an initial regulatory flexibility analysis’’ 

which will ‘‘describe the impact of the 

proposed rule on small entities.’’ (5 

U.S.C. 603(a)). However, section 605 of 

the RFA allows an agency to certify a 

rule, in lieu of preparing an analysis, if 

the proposed rulemaking is not 

expected to have a significant economic 

impact on a substantial number of small 

entities. 

In the ANPRM (84 FR 25496), SBA 

solicited comments from the public to 

identify which of SBA’s regulations 

relating to the SBG program should be 

repealed, replaced, or modified because 

they are obsolete, unnecessary, 

ineffective, or burdensome. SBA also 

solicited comments from the public on 

how SBA can improve the surety bond 

products, procedures, forms, and 

reporting requirements of the SBG 

Program. SBA’s proposed revisions in 

response to comments received are 

consistent with these goals and with 

increasing the consistency of these 

regulations with industry standards. 

Under 13 CFR 115.11, Sureties 

participating in SBA’s SBG Program 

must be a corporation listed by the U.S. 

Treasury as eligible to issue bonds in 

connection with Federal procurement 

contracts. There are 256 Treasury-listed 

Sureties, of which 41 are program 

partners in the SBG Program. SBA 

estimates that 12 of these 41 Surety 

companies are small under SBA’s size 

standards. In addition, most small 

businesses that receive an SBAguaranteed bond operate within the 

236220 NAICS industry code 

(Commercial and Institutional Building 

Construction). According to the U.S. 

Census Bureau, there are a total of 

38,079 small business companies that 

operate within the 236220 NAICS code, 

and SBA provided guarantees in 2017 

for 1,602 of these small businesses. Even 

if the number of entities that may be 

affected by this proposed rule is 

considered significant, SBA has 

determined that the economic impact on 

these entities would not be substantial. 

The proposed rules would repeal, 

replace, or modify obsolete or outdated 

SBG Program requirements that will 

have the effect of reducing the burden 

on Sureties and small businesses that 

receive bonds under the SBG Program. 

In addition, SBA anticipates that the 

proposed rules would streamline 

outdated procedures and increase small 

business access to bond guarantees. 

Further, the proposed rule would 

reduce costs 2 to Sureties and small 

businesses receiving an SBA-guaranteed 

bond while any costs of adjustment to 

revisions are de minimis. Thus, SBA 

does not expect that this rule would 

have a significant economic impact on 

its program participants. Accordingly, 

the Administrator of the SBA hereby 

certifies that this proposed rule would 

not have a significant economic impact 

on a substantial number of small 

entities. 

List of Subjects in 13 CFR Part 115 

Claims, Reporting and recordkeeping 

requirements, Small businesses, Surety 

bonds. 

For the reasons stated in the 

preamble, SBA proposes to amend 13 

CFR part 115 as follows: 

PART 115—SURETY BOND 

GUARANTEE 

■ 1. The authority citation for part 115 

continues to read as follows: 

Authority: 5 U.S.C. app 3; 15 U.S.C. 687b, 

687c, 694a, 694b note; and Pub. L. 110–246, 

Sec. 12079, 122 Stat. 1651. 

■ 2. Amend § 115.10 by revising the 

definition of ‘‘Contract’’ to read as 

follows: 

§ 115.10 Definitions. 

* * * * * 

Contract means a written obligation of 

the Principal, including an Order, 

requiring the furnishing of services, 

supplies, labor, materials, machinery, 

equipment or construction. 

A Contract: 

(1) Must not prohibit a Surety from 

performing the Contract upon default of 

the Principal; 

(2) Does not include a permit, 

subdivision contract, lease, land 

contract, evidence of debt, financial 

guarantee (e.g., a contract requiring any 

payment by the Principal to the Obligee, 

except for contracts in connection with 

bid and performance bonds for the sale 

of timber and/or other forest products, 

such as biomass, that require the 

Principal to pay the Obligee), warranty 

of performance or efficiency, warranty 

of fidelity, or release of lien (other than 

for claims under a guaranteed bond); 

and 

(3) May include a maintenance 

agreement under the following 

circumstances: 

(i) The maintenance agreement is 

ancillary to a Contract for which SBA is 

guaranteeing a bond, is performed by 

the same Principal, is for a period of 2 

years or less, and only covers defective 

workmanship or materials that are not 

covered by a manufacturer’s warranty. 

With SBA’s prior written approval, the 

agreement may cover a period longer 

than 2 years, or cover something other 

than defective workmanship or 

materials, if a longer period or 

something other than defective 

workmanship or materials is 


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52848 Federal Register / Vol. 86, No. 182 / Thursday, September 23, 2021 / Proposed Rules 

customarily required in the relevant 

trade or industry; or 

(ii) The maintenance agreement is 

stand-alone and is entered into in 

connection with a Contract for which a 

bond was not required and only covers 

defective workmanship or materials that 

are not covered by a manufacturer’s 

warranty. The agreement must cover a 

period of 3 years or less that begins 

immediately after the Contract is 

complete and must be executed prior to 

the completion of the Contract. It must 

also be entered into with the same 

Principal that completed the Contract. 

With SBA’s prior written approval, the 

agreement may cover a period longer 

than 3 years if a longer period is 

customarily required in the relevant 

trade or industry. 

* * * * * 

■ 3. Amend § 115.12 by revising 

paragraph (e)(3) to read as follows: 

§ 115.12 General program policies and 

provisions. 

* * * * * 

(e) * * * 

(3) Federal Contracts or Orders in 

excess of $6,500,000 (as adjusted for 

inflation in accordance with section 

1908 of title 41, United States Code). 

SBA is authorized to guarantee bonds 

on Federal Contracts or Orders greater 

than $6,500,000 (as adjusted for 

inflation in accordance with 41 U.S.C. 

1908), but not exceeding $10,000,000, 

upon a signed certification of a Federal 

contracting officer that the SBA 

guarantee is necessary. The certification 

must be either express mailed to SBA, 

Office of Surety Guarantees, 409 Third 

Street SW, Washington, DC 20416 or 

sent by email to suretybonds@sba.gov, 

and include the following additional 

information: 

(i) Name, address and telephone 

number of the small business; 

(ii) Offer or Contract number and brief 

description of the contract; and 

(iii) Estimated Contract value and date 

of anticipated award determination. 

* * * * * 

§ 115.14 [Amended] 

■ 4. In paragraph (a)(3), remove ‘‘$1000’’ 

and add in its place ‘‘$10,000’’. 

■ 5. In § 115.19, revise paragraph 

(f)(2)(i) to read as follows: 

§ 115.19 Denial of liability. 

* * * * * 

(f) * * * 

(2)(i) For purposes of paragraph 

(f)(1)(ii) of this section, work under a 

Contract is considered to have begun 

when a Principal takes any action 

related to the contract or bond that 

would have exposed its Surety to 

liability under applicable law had a 

bond been Executed (or approved, if the 

Surety is legally bound by such 

approval) at the time. 

* * * * * 

§ 115.30 [Amended] 

■ 6. Amend § 115.30 as follows: 

■ a. In paragraph (d)(2), remove 

‘‘$400,000’’ and add in its place 

‘‘$500,000’’; 

■ b. In paragraph (d)(2)(ii)(D), remove 

‘‘$1,000’’ and add in its place ‘‘$2,500’’; 

and 

■ c. In paragraph (d)(2)(ii)(E), remove 

the term ‘‘demolition,’’. 

§ 115.32 [Amended] 

■ 7. In § 115.32(d), remove ‘‘$40’’ 

wherever it appears and add in its place 

‘‘$250.’’ 

§ 115.33 [Amended] 

■ 8. Amend § 115.33 by: 

■ a. In paragraph (d)(1), removing the 

phrase ‘‘a ‘‘Surety Bond Guarantee 

Underwriting Review’’ (SBA Form 

994B)’’ and adding in its place the 

phrase ‘‘a ‘‘Surety Bond Guarantee 

Agreement’’ (Form 990)’’; and 

■ b. In paragraph (d)(2), removing the 

phrase ‘‘a Surety Bond Guarantee 

Underwriting Review (SBA Form 994B) 

and’’ in the first sentence, and removing 

the phrase ‘‘these forms’’ in the second 

sentence and adding in its place the 

phrase ‘‘this form.’’ 

■ 9. Amend § 115.64 by adding a 

sentence at the end of the section to 

read as follows: 

§ 115.64 Timeliness requirement. 

* * * For purposes of this section, 

work has commenced under a Contract 

when a Principal takes any action 

related to the contract or bond that 

would have exposed its Surety to 

liability under applicable law had a 

bond been Executed (or approved, if the 

Surety is legally bound by such 

approval) at the time. 

§ 115.67 [Amended] 

■ 10. In § 115.67, remove ‘‘$40’’ 

wherever it appears and add in its place 

‘‘$250.’’ 

Isabella Casillas Guzman, 

Administrator. 

[FR Doc. 2021–20401 Filed 9–22–21; 8:45 am] 

BILLING CODE 8026–03–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2021–0827; Project 

Identifier MCAI–2021–00617–T] 

RIN 2120–AA64 

Airworthiness Directives; Airbus SAS 

Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Notice of proposed rulemaking 

(NPRM). 

SUMMARY: The FAA proposes to adopt a 

new airworthiness directive (AD) for all 

Airbus SAS Model A350–941 and –1041 

airplanes. This proposed AD was 

prompted by reports of slat transmission 

jams caused by frozen slat geared rotary 

actuators (SGRA) at slat 5 track 12. This 

proposed AD would require repetitive 

water drainage and plug cleaning of the 

left- and right-hand SGRA having a 

certain part number installed on slat 5 

track 12 with certain functional item 

numbers, as specified in a European 

Union Aviation Safety Agency (EASA) 

AD, which is proposed for incorporation 

by reference. The FAA is proposing this 

AD to address the unsafe condition on 

these products. 

DATES: The FAA must receive comments 

on this proposed AD by November 8, 

2021. 

ADDRESSES: You may send comments, 

using the procedures found in 14 CFR 

11.43 and 11.45, by any of the following 

methods: 

• Federal eRulemaking Portal: Go to 

https://www.regulations.gov. Follow the 

instructions for submitting comments. 

• Fax: 202–493–2251. 

• Mail: U.S. Department of 

Transportation, Docket Operations, M– 

30, West Building Ground Floor, Room 

W12–140, 1200 New Jersey Avenue SE, 

Washington, DC 20590. 

• Hand Delivery: Deliver to Mail 

address above between 9 a.m. and 5 

p.m., Monday through Friday, except 

Federal holidays. 

For material that will be incorporated 

by reference (IBR) in this AD, contact 

EASA, Konrad-Adenauer-Ufer 3, 50668 

Cologne, Germany; telephone +49 221 

8999 000; email ADs@easa.europa.eu; 

internet www.easa.europa.eu. You may 

find this IBR material on the EASA 

website at https://ad.easa.europa.eu. 

You may view this IBR material at the 

FAA, Airworthiness Products Section, 

Operational Safety Branch, 2200 South 

216th St., Des Moines, WA. For 

information on the availability of this 


lotter on DSK11XQN23PROD with PROPOSALS1