75 Am. U. L. Rev. F. 923 (2026).
Abstract
As federal contracting policy has moved away from race- and gender-conscious contracting initiatives, the need to identify and remove facially neutral requirements that create disparate impacts has assumed heightened significance in shaping access to government contracting law. In construction projects, the federal government has long required contractors to purchase surety bonds under the Miller Act to protect subcontractors and the government in cases of prime contractor default. While that original purpose remains valid today, bonding requirements are widely believed to unnecessarily limit participation by women- and minority-owned businesses.
Federal, state, and local governments have tacitly accepted the claim that bonding requirements create barriers to entry for women- and minority-owned businesses, with many programs aiming at promoting broader participation by relaxing these requirements. Despite decades of debate, both proponents and opponents have offered little empirical evidence to support their positions. At the same time, government officials increasingly justify bonding requirements as financial safeguards, but also as a secondary vetting mechanism for contractor reliability.
This Article argues that while bonding remains necessary for larger projects, the federal government should reconsider its use on smaller projects for two reasons. First, the government’s current implicit costbenefit analysis for requiring surety bonds is inherently incomplete, as it fails to account for indirect costs such as the exclusion of women- and minority-owned businesses. To support this claim, this Article presents the first empirical evidence that bonding requirements function as a barrier to entry for these firms. Second, the government’s reliance on sureties as a vetting mechanism improperly duplicates the functions of contracting officers, who are already tasked with ensuring that only “responsible” contractors receive government contracts. This dual-vetting system is generating costs and accountability gaps in federal procurement. If the government chooses to retain sureties in this capacity, then procurement regulations should reflect that delegation; otherwise, the contracting officer should retake full ownership and accountability for this function.
Finally, this Article proposes a conceptual framework that accounts for both the direct and indirect effects of bonding requirements while respecting established government contracting principles. Drawing on the costs and benefits of surety bonds and procurement law, the Article explores several policy alternatives that can help reconcile the government’s legitimate risk mitigation interest with statutory mandates to promote broad contractor participation in federal markets.
* The American University Law Review has not independently reviewed the empirical data and analyses described herein. The Article’s dataset is on file with the Author.
** Visiting Assistant Professor, Elisabeth Haub School of Law, Pace University. Portions of this Article are adapted from the Author’s doctoral dissertation, Barriers to Entry for Women- And Minority-Owned Businesses in Government Contracting (2024) (Ph.D. dissertation, Vanderbilt University). I am especially grateful to Joni Hersch, W. Kip Viscusi, Kevin M. Stack, and Steven L. Schooner for their extensive feedback as members of my dissertation committee. I would also like to thank Colton Cronin and Delaney Beck for their detailed comments on this Article. I am grateful to participants at the Economics of Public Procurement Workshop 2024 in Utrecht, Netherlands; the Association of American Law Schools 2024 Annual Meeting’s Law and Economics session; and the Southern Economic Association 2023 Annual Meeting’s session on Law and Economics for their feedback on this work. Finally, I would like to extend a special thanks to the editors and staff of the American University Law Review for their careful attention and thoughtful editorial suggestions throughout the editorial process.