28.106-2
Substitution of surety bonds
Substituting a surety bond requires formal approval and prompt notification to all affected parties to maintain contract security and compliance.
Overview
FAR 28.106-2 addresses the procedures for substituting surety bonds on government contracts. It allows for a new surety bond to replace an existing one, either in full or in part, provided the substitution is approved by the head of the contracting activity or as specified by agency regulations. Once a new surety bond is approved, the contracting officer is required to notify both the principal (the contractor) and the original surety of the effective date of the new bond. This ensures all parties are aware of the change and the coverage provided by the new surety bond.
Key Rules
- Approval of Substitution
- A new surety bond can replace an existing bond if approved by the appropriate authority.
- Notification Requirement
- The contracting officer must inform both the contractor and the original surety of the effective date of the new bond.
Responsibilities
- Contracting Officers: Must obtain proper approval for bond substitution and notify all relevant parties of the change.
- Contractors: Should coordinate with the contracting officer when seeking to substitute a surety bond.
- Agencies: Must ensure substitutions are approved according to agency or FAR requirements.
Practical Implications
- This section provides a clear process for replacing surety bonds, which is important for maintaining contract security and compliance.
- It helps prevent lapses in bond coverage and ensures all stakeholders are informed of changes.
- Common issues include failure to obtain proper approval or neglecting to notify the original surety, which can lead to disputes or compliance violations.