28.200
Scope of subpart
FAR 28.200 sets the foundation for using sureties and security instruments to protect the Government from financial losses in federal contracting.
Overview
- FAR 28.200 establishes the scope for Subpart 28.2, outlining the procedures for using sureties and other forms of security to protect the Government from financial losses in contracting. This section serves as an introduction, clarifying that the subpart covers requirements and processes related to bonds and acceptable security instruments in federal contracts.
Key Rules
- Use of Sureties and Security
- The subpart details how sureties (such as individuals or companies) and other security mechanisms (like bonds or letters of credit) are to be used to safeguard the Government’s interests.
- Protection Against Financial Loss
- The procedures are designed to ensure the Government is financially protected if a contractor fails to meet contractual obligations.
Responsibilities
- Contracting Officers: Must follow the prescribed procedures for accepting and verifying sureties and other security forms.
- Contractors: Must provide acceptable sureties or security as required by contract terms.
- Agencies: Oversee compliance and ensure proper risk mitigation through bonds and security instruments.
Practical Implications
- This section exists to minimize the Government’s risk of financial loss due to contractor default.
- It impacts daily contracting by requiring careful vetting and documentation of sureties and security.
- Common pitfalls include accepting inadequate security or failing to follow proper procedures, which can expose the Government to unnecessary risk.