Surety bonding capacity ceiling preventing mid-size GCs from bidding public projects that match their actual execution capability

A general contractor with $10M in annual revenue, $1.5M in working capital, and a track record of completing $3M projects wants to bid a $6M public school renovation, but their surety will only bond them for 1.5-2x their largest completed project ($4.5-$6M single job limit), and their aggregate program limit of 10-20x working capital ($15-$30M) may already be consumed by current backlog. This matters because public projects (schools, municipal buildings, infrastructure) require performance and payment bonds by law, so without bonding capacity, the contractor literally cannot submit a bid regardless of their technical ability to do the work. The contractor is trapped in a growth ceiling — they cannot get larger bonds without completing larger projects, but they cannot win larger projects without larger bonds. This forces them to remain in the private market where margins are thinner and payment risk is higher, or to joint-venture with a larger firm and surrender 30-50% of the profit. Their best project managers and superintendents, seeing no path to larger projects and career growth, leave for firms that can pursue the bigger work. The contractor's inability to bid public work also means they cannot diversify their client base, leaving them vulnerable to private market downturns. This persists structurally because surety underwriting is inherently backward-looking — it evaluates what you have done, not what you can do — and the surety's risk model penalizes growth because a contractor's first project at a new scale is statistically the most likely to fail.