New Local Program Assists Contractors in Obtaining Bonding Insurance

New Local Program Assists Contractors in Obtaining Bonding Insurance

Three local government agencies have banded together to create a new program to help small and diverse contractors in bidding and obtaining work on infrastructure development and other publicly funded construction projects.

The city of Los Angeles, the county of Los Angeles and the Los Angeles County Metropolitan Transportation Authority announced the new program – called the Contractor Development and Bonding Program – earlier this month. It will provide bonding assistance, contract financing, technical support, education, training and other services to under-represented businesses.

San Francisco-based Merriwether & Williams Insurance Services, which specializes in providing bonding insurance for contractors and other small businesses, will administer the program. Other CDABPs the firm has administered have generated more than 1,000 bid bonds and led to more than $300 million in awarded contracts to underrepresented firms.

Both the city of Los Angeles and Metro have had contractor development and bonding programs in place for several years, also administered by Merriwether & Williams. But the county only joined this effort in recent months, thus enabling the creation of this new joint program.

The targeted businesses are in the disadvantaged, minority, small, women and disabled veteran owned business enterprise categories. All services provided through the contractor development and bonding program are provided at no cost to participants.
One minority business enterprise owner who has participated in the program is William Jackson, president of Inglewood-based electrical subcontractor Global Installation and Maintenance Inc., which does business as Global Electric.

Jackson said he reached out to Merriwether & Williams for a required performance bond as he won a $3.2 million contract on the Metro Purple Line construction project.
“It would have been very difficult for me to qualify for a bond of this size by myself,” Jackson said. “Without some of the benefits of this CDABP, I probably would not have gotten the bond and therefore wouldn’t have gotten the project.”

Jackson said Merriwether & Williams also facilitated a $500,000 loan to enable his company to afford some of the upfront costs for the Metro subcontract.
He added that in the future, knowing this program is there, he would “absolutely” bid on larger projects that he would never have considered earlier.

The expanded program’s timing is fortuitous, coming online just as the first tranches of federal funding arrive from the massive $1.2 trillion federal infrastructure spending bill enacted last year. Los Angeles World Airports, for example, has already been allocated $79 million in infrastructure upgrade funds. And Metro is preparing to compete for billions of dollars from several transportation funding programs contained in that federal bill.

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