28.203-5 Exclusion of individual sureties
Source: FAR 28.203-5 on acquisition.gov
Contracting officers must not accept bonds from individual sureties listed as excluded in SAM, and exclusion for cause also bars those individuals from acting as contractors.
Overview
FAR 28.203-5 establishes the grounds and procedures for excluding individual sureties from participating in federal government contracts. It outlines the authority for exclusion, the causes that can lead to exclusion, and the consequences for both the surety and contracting officers. The regulation is designed to protect the government from unreliable or dishonest sureties by ensuring only responsible individuals can act as sureties on government bonds.
Key Rules
- Authority to Exclude
- Agency heads or their designees may exclude individual sureties using procedures in FAR subpart 9.4 to protect the government.
- Causes for Exclusion
- Exclusion can result from failure to fulfill bond obligations, nondisclosure of bond obligations, misrepresentation of assets or liabilities, false statements, or any other serious cause affecting responsibility.
- System for Award Management (SAM) Listing
- Excluded sureties must be listed in SAM, making their exclusion visible to all contracting officers.
- Prohibition on Acceptance
- Contracting officers cannot accept bonds from excluded sureties unless a written justification is provided by the agency head or designee.
- Broader Exclusion
- Exclusion as a surety also bars the individual from acting as a contractor under FAR subpart 9.4.
Responsibilities
- Contracting Officers: Must check SAM for exclusions and not accept bonds from excluded sureties unless justified in writing.
- Contractors: Must ensure their individual sureties are not excluded and provide accurate, complete information.
- Agencies: Must follow exclusion procedures and update SAM as required.
Practical Implications
- This section ensures only trustworthy individuals serve as sureties, reducing risk to the government.
- Contractors must vet their sureties carefully and maintain transparency.
- Failure to comply can result in exclusion from government contracting, affecting both surety and contractor.
(a)An individual may be excluded from acting as a surety on bonds submitted by offerors on procurement by the executive branch of the Federal Government, by the acquiring agency's head or designee utilizing the procedures in subpart 9.4. The exclusion shall be for the purpose of protecting the Government.
(b)An individual may be excluded for any of the following causes:
(1)Failure to fulfill the obligations under any bond.
(2)Failure to disclose all bond obligations.
(3)Misrepresentation of the value of available assets or outstanding liabilities.
(4)Any false or misleading statement, signature or representation on a bond or affidavit of individual suretyship.
(5)Any other cause affecting responsibility as a surety of such serious and compelling nature as may be determined to warrant exclusion.
(c)An individual surety excluded pursuant to this section shall be entered as an exclusion in the System for Award Management (see 9.404).
(d)Contracting officers shall not accept the bonds of individual sureties whose names appear in an active exclusion record in the System for Award Management (see 9.404) unless the acquiring agency's head or a designee states in writing the compelling reasons justifying acceptance.
(e)An exclusion of an individual surety under this section will also preclude such party from acting as a contractor in accordance with subpart 9.4.