FAR 52.228-15 - Performance and Payment Bonds - Construction

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Prescribed in 28.102-3(a)
Effective Date:	1 October 2010
Clause or Provision:	Clause
Provision or Clause Number:	52.228-15 - Performance and Payment Bonds - Construction
Principle Type And/Or Purpose of Contract:
Required:
Applicable:	Dismantling, Demolition or Removal of Improvements; Cost Reimbursement, Construction; Fixed Price, Construction
Optional:	Utility Services; Simplified Acquisition Procedures (Excludes Micro-Purchase); Facilities; Indefinite Delivery; Leasing of Motor Vehicles; Time & Material/Labor Hour; Fixed Price, Service; Cost Reimbursement, Supply; Cost Reimbursement, Service
Subject:	Bond
ProcurementType:
Contract Threshold:	>150,000
Prescription Overview:	Prescription (a) Insert a clause substantially the same as the clause at 52.228-15, Performance and Payment Bonds—Construction, in solicitations and contracts for construction that contain a requirement for performance and payment bonds if the resultant contract is expected to exceed $150,000. The contracting officer may revise paragraphs (b)(1) and/or (b)(2) of the clause to establish a lower percentage in accordance with 28.102-2(b). If the provision at 52.228-1 is not included in the solicitation, the contracting officer must set a period of time for return of executed bonds.
Clause Overview:	Clause (a) Definitions As used in this clause— “Original contract price” means the award price of the contract; or, for requirements contracts, the price payable for the estimated total quantity; or, for indefinite-quantity contracts, the price payable for the specified minimum quantity. Original contract price does not include the price of any options, except those options exercised at the time of contract award. (b) Amount of Required Bonds Unless the resulting contract price is $150,000 or less, the successful offeror shall furnish performance and payment bonds to the Contracting Officer as follows: (1) Performance bonds (Standard Form 25). The penal amount of performance bonds at the time of contract award shall be 100 percent of the original contract price. (2) Payment Bonds (Standard Form 25A). The penal amount of payment bonds at the time of contract award shall be 100 percent of the original contract price. (3) Additional bond protection. (i) The Government may require additional performance and payment bond protection if the contract price is increased. The increase in protection generally will equal 100 percent of the increase in contract price. (ii) The Government may secure the additional protection by directing the Contractor to increase the penal amount of the existing bond or to obtain an additional bond. (c) Furnishing Executed Bonds The Contractor shall furnish all executed bonds, including any necessary reinsurance agreements, to the Contracting Officer, within the time period specified in the Bid Guarantee provision of the solicitation, or otherwise specified by the Contracting Officer, but in any event, before starting work. (d) Surety or Other Security for Bonds The bonds shall be in the form of firm commitment, supported by corporate sureties whose names appear on the list contained in Treasury Department Circular 570, individual sureties, or by other acceptable security such as postal money order, certified check, cashier's check, irrevocable letter of credit, or, in accordance with Treasury Department regulations, certain bonds or notes of the United States. Treasury Circular 570 is published in the Federal Register or may be obtained from the: U.S. Department of the Treasury Financial Management Service Surety Bond Branch 3700 East West Highway, Room 6F01 Hyattsville, MD 20782. Or via the internet at http://www.fms.treas.gov/c570/. Subcontractor Waiver (e) Notice of subcontractor waiver of protection (40 U.S.C. 3133(c)). Any waiver of the right to sue on the payment bond is void unless it is in writing, signed by the person whose right is waived, and executed after such person has first furnished labor or material for use in the performance of the contract.
Important Notes/Requirements:
Subcontract Threshold:	>150,000
Incorporated by Reference:	Yes
Uniform Contract Format:	I
Editor:	Marshall

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Personal notes.