28.203-5
Exclusion of individual sureties
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.