28.103
Performance and payment bonds for other than construction contracts
FAR 28.103 ensures that appropriate performance and payment bonds are used in non-construction contracts to protect the government and subcontractors from financial risk.
Overview
FAR 28.103 addresses the requirements for performance and payment bonds in contracts that are not for construction. This section outlines when such bonds may be required, the types of bonds applicable, and the relevant contract clauses. The regulation provides guidance to contracting officers on the use of bonds to protect the government’s interests in non-construction contracts, such as service or supply contracts, where financial security may be necessary to ensure contract performance and payment to subcontractors or suppliers.
Key Rules
- General Guidance (28.103-1)
- Explains the general policy and considerations for requiring performance and payment bonds in non-construction contracts.
- Performance Bonds (28.103-2)
- Details when performance bonds may be required and the conditions under which they are appropriate for non-construction contracts.
- Payment Bonds (28.103-3)
- Specifies the circumstances for requiring payment bonds to protect subcontractors and suppliers in non-construction contracts.
- Contract Clause (28.103-4)
- Identifies the appropriate contract clauses to include when performance or payment bonds are required.
Responsibilities
- Contracting Officers: Assess the need for bonds in non-construction contracts, include appropriate clauses, and ensure compliance with FAR requirements.
- Contractors: Obtain and submit required bonds when specified in the solicitation or contract.
- Agencies: Oversee the bonding process and ensure that financial protections are in place as needed.
Practical Implications
- This section exists to provide financial protection to the government and subcontractors in non-construction contracts.
- It impacts daily contracting by requiring careful evaluation of risk and the need for bonds.
- Common pitfalls include failing to require bonds when necessary or omitting required contract clauses, which can expose the government to financial risk.