28.106
Administration
FAR 28.106 establishes the administrative framework for managing bonds in federal contracts, ensuring financial protections and compliance throughout the contract lifecycle.
Overview
FAR 28.106 - Administration outlines the administrative procedures and requirements related to bonds and other financial protections in government contracts. This section provides guidance on the use and management of bonds, including the proper forms, substitution of surety bonds, requirements for additional bonds or security, contract clauses, consent of surety, furnishing information, withholding payments, and payments to subcontractors or suppliers. The section ensures that both contracting officers and contractors understand their responsibilities in managing bonds throughout the contract lifecycle, helping to mitigate financial risks and ensure compliance with federal requirements.
Key Rules
- Bonds and Bond-Related Forms
- Specifies the forms and documentation required for bonds in federal contracts.
- Substitution of Surety Bonds
- Outlines the process for replacing an existing surety bond with another.
- Additional Bond and Security
- Details when and how additional bonds or security may be required during contract performance.
- Contract Clause
- Requires inclusion of specific clauses related to bonds in contracts.
- Consent of Surety
- Establishes when and how consent from the surety must be obtained for contract modifications or payments.
- Furnishing Information
- Mandates providing bond-related information to relevant parties upon request.
- Withholding Contract Payments
- Allows withholding of payments under certain circumstances to protect the government’s interests.
- Payment to Subcontractors or Suppliers
- Addresses procedures for ensuring payment to subcontractors and suppliers, especially when bonds are involved.
Responsibilities
- Contracting Officers: Ensure proper administration of bonds, use correct forms, obtain consents, and manage payments and information requests.
- Contractors: Submit required bonds and forms, comply with substitution and additional security requirements, and ensure timely payment to subcontractors and suppliers.
- Agencies: Oversee compliance, maintain records, and enforce bond-related protections.
Practical Implications
- This section exists to protect the government’s financial interests and ensure contract performance.
- It impacts daily contracting by requiring careful management of bonds and related documentation.
- Common issues include improper bond forms, delays in obtaining consent of surety, and disputes over payments to subcontractors or suppliers.