37.302
Bonds or other security
For dismantling, demolition, or removal contracts, statutory bonds are not required, but contracting officers may still require performance bonds or other security to protect government interests.
Overview
FAR 37.302 addresses bonding and security requirements for contracts that are solely for dismantling, demolition, or removal of improvements. Unlike construction contracts, these contracts are not subject to the statutory bonding requirements under 40 U.S.C. chapter 31, subchapter III. However, the contracting officer has the discretion to require a performance bond or other security if deemed necessary. The purpose of such security is to ensure the contractor completes the work, protects government property, safeguards property provided as compensation, and prevents damage to adjoining property. This section gives contracting officers flexibility to tailor security requirements based on the specific risks of each project.
Key Rules
- Statutory Bonds Not Required
- Contracts solely for dismantling, demolition, or removal are exempt from the statutory bond requirements of 40 U.S.C. chapter 31, subchapter III.
- Discretionary Security
- Contracting officers may require performance bonds or other forms of security if they determine it is necessary to protect government and adjacent property, ensure work completion, or safeguard compensation property.
Responsibilities
- Contracting Officers: Assess project risks and determine if a performance bond or other security is needed; specify the amount and type of security in the contract.
- Contractors: Provide the required bond or security if stipulated in the contract; ensure compliance with all security provisions.
- Agencies: Oversee contracting officers’ decisions and ensure appropriate risk mitigation measures are in place.
Practical Implications
- This section exists to provide flexibility in risk management for non-construction removal contracts.
- Contractors should be prepared for possible bonding or security requirements even when statutory bonds are not mandated.
- Failure to provide required security can result in ineligibility for award or contract termination.