28.000
Scope of part
FAR 28.000 establishes the requirement for financial protections—such as bonds and insurance—in government contracts to safeguard against losses.
Overview
FAR 28.000 outlines the scope of Part 28, which establishes the requirements for financial protections in government contracts. This section applies to contracts awarded through both sealed bidding and negotiation, ensuring that the government is protected from financial losses due to contractor default or other risks. The part addresses the use of bid guarantees, various types of bonds (such as performance and payment bonds), alternative payment protections, security for bonds, and insurance requirements. Its purpose is to safeguard the government's interests by requiring contractors to provide adequate financial assurances before and during contract performance.
Key Rules
- Applicability to Contract Types
- Requirements apply to contracts awarded by sealed bid or negotiation methods.
- Financial Protections Covered
- Includes bid guarantees, bonds, alternative payment protections, security for bonds, and insurance.
Responsibilities
- Contracting Officers: Must ensure appropriate financial protections are in place for applicable contracts.
- Contractors: Must provide required guarantees, bonds, or insurance as specified in the solicitation or contract.
- Agencies: Oversee compliance and enforce requirements to protect government interests.
Practical Implications
- This section exists to minimize the government's financial risk in contracting.
- Contractors must be prepared to secure and submit the necessary financial instruments.
- Failure to comply can result in ineligibility for award or contract termination.