Solicitation provision or contract clause
Contracting officers must include and tailor the bid guarantee provision in solicitations requiring guarantees, ensuring the amount is at least 20% of the bid price but not more than $3 million.
Overview
FAR 28.101-2 outlines the requirements for including the solicitation provision or contract clause related to bid guarantees in government contracts. Contracting officers must use a provision substantially similar to FAR 52.228-1, Bid Guarantee, in solicitations or contracts that require a bid or similar guarantee. The provision can be modified for specific circumstances, such as changing the bond return period, construction solicitations requiring separate bid bonds, negotiated contracts, or service contracts with extended performance options. The contracting officer is also responsible for determining the appropriate amount of the bid guarantee, which must be sufficient to protect the Government but cannot exceed 20% of the bid price or $3 million, whichever is less. If the penal sum is a percentage, a maximum dollar cap may be included.