Joe Bucci had two choices when the financial tsunami of 2008 swept away so many contractors in the building business: Suck it up. Or pack it in.

He sucked it up: Sold assets. Reduced overhead. Borrowed on his home. But to stay in business, he needed one more thing: New customers.

So he went to where an increasing number of contractors in the building trades are going: Bucci bid on his first government contract.

He could do the work; after 38 years of residential and commercial construction experience throughout New Jersey, he knew that. But there was a catch that almost drove him out of the government construction business before he even started.

"I could not get a bond," Bucci said. "Most small business owners today cannot. That is because their credit was hurt over the last several years. And what most people not in business do not know is that a bond is really a line of credit, and is given — or not — based on a credit score. A credit score most small contractors today do not have."

Bucci almost had to walk away from a job to weatherize 135-unit building because he could not find a bond.


Rhonda Taylor had the same problem: She quit her job at the Post Office to start her own building maintenance company in St. Louis. Private clients were a good start. But Taylor wanted bigger fish. She wanted to take care of all those government buildings all over Missouri.

"We did the research and found out what the contract for building maintenance at the St. Louis airport was worth," said Taylor. "We knew we could do the work for less."

But when Taylor and her insurance agent tried to get bonding, six companies turned her down.

"They said I could not get a bond because I did not have the credit or cash in the bank," said Taylor. "We won the contract but I thought I was going to have to give on my first government job because no company would write us a bond."

Both Bucci and Taylor stayed in business because they found a bond at Ox Bonding, which specializes in small contractors that do government work. Ox Bonding looked at the ability of Bucci and Taylor to do the work, complete the job. Not just credit scores.

"When I was a teenager, I sat at the kitchen table when the insurance broker told my dad, a building contractor with a spotless record, that he could not do a larger job because he did not have the credit to get a bigger bond," said Robert Berman, co-founder of Ox Bonding.

"Today it is even worse. That is why we started Ox Bonding: There are a lot of great companies out there doing great work that deserve a bond. And working capital too."

Getting more contractors involved also increases competition for government work and saves taxpayers money.

"We were $100,000 under the next highest bidder," said Taylor. "So you can see the savings are pretty big when more companies can bid for the work."

"Local governments are paying attention too: In California, the San Diego Association of Governments is reducing the size of its bid packages so that bonding will be easier to get," said Jerome Stocks, Chairman of SANDAG. "Without better bonding for small companies, these contractors will not be able to get government work," Stocks said. "And that is not smart. And that is not right."

However important small business companies are to the economy, Berman is not running a charity. Writing a bond is a risk. If the company does not complete the work or pay its subcontractors, Ox Bonding has to step in and make it whole.

"Our underwriters are construction people, not accountants," Berman said. "So we look under the hood, check their books, look at their past jobs, and make sure they can do the work. Only then do we issue a bond."

Ox Bonding also controls the distribution of funds. This further reduces its risk that a contractor will not pay its subs or fail to complete the job.

And if its customers choose, Ox Bonding will also pay taxes, do payroll, issue working capital, and other back office functions that free the contractors up to do what they do best.

For Bucci, building. For Taylor, cleaning and fixing.

"The big companies are just not writing bonds for small contractors," said Bucci. "Ox Bonding does. Without them, I would not be in public work business."


 –by Dan Auld | Business Writer, San Diego, CA

Joe Bucci: "The big companies are just not writing bonds for small contractors," said Bucci. "Ox Bonding does. Without them, I would not be in public work business."