28.001
Definitions
FAR 28.001 defines essential terms for bonds and insurance, ensuring all parties interpret and comply with Part 28 requirements consistently.
Overview
FAR 28.001 provides definitions for key terms used throughout Part 28, which governs bonds and insurance requirements in federal contracting. This section clarifies the meaning of terms such as attorney-in-fact, bid, bid guarantee, bond, consent of surety, penal sum, and reinsurance, ensuring all parties have a common understanding of these concepts. These definitions are foundational for interpreting the requirements and obligations related to bonding and insurance in government contracts.
Key Rules
- Attorney-in-fact
- Defined as an agent or individual authorized by a surety to act on its behalf, typically via power of attorney.
- Bid and Bid Guarantee
- "Bid" covers all responses to solicitations, and a "bid guarantee" is a security ensuring the bidder will not withdraw and will execute the contract and required bonds if awarded.
- Bond Types
- Several bond types are defined, including advance payment, annual bid, annual performance, patent infringement, payment, and performance bonds, each serving specific purposes in contract assurance.
- Consent of Surety and Penal Sum
- "Consent of surety" is the surety's acknowledgment that its bond remains valid after contract modifications; "penal sum" is the maximum amount the surety is liable for under the bond.
- Reinsurance
- Defined as an arrangement where one surety indemnifies another against losses under a bond.
Responsibilities
- Contracting Officers: Must use these definitions to interpret and enforce bonding and insurance requirements accurately.
- Contractors: Should understand these terms to ensure compliance with bonding obligations and to communicate effectively with sureties and the government.
- Agencies: Ensure that all parties adhere to the definitions and requirements set forth in Part 28.
Practical Implications
- This section exists to provide clarity and consistency in the application of bonding and insurance requirements.
- Misunderstanding these definitions can lead to compliance issues, bid rejections, or bonding disputes.
- Contractors and contracting officers should reference these definitions when preparing, reviewing, or enforcing bond-related contract provisions.