Defense Federal Acquisition Regulation Supplement (DFARS) Part 228, Bonds and Insurance, and Related Clauses at 252.228

Defense Federal Acquisition Regulation Supplement
Part 228—Bonds and Insurance

SUBPART 228.1--BONDS
(Revised February 22, 2005)
228.102 Performance and payment bonds for construction contracts.
228.102-1 General.
The requirement for performance and payment bonds is waived for cost-reimbursement
contracts. However, for cost-type contracts with fixed-price construction subcontracts
over $25,000, require the prime contractor to obtain from each of its construction
subcontractors performance and payment protections in favor of the prime contractor
as follows:
(1) For fixed-price construction subcontracts over $25,000, but not exceeding
$100,000, payment protection sufficient to pay labor and material costs, using any of
the alternatives listed at FAR 28.102-1(b)(1).
(2) For fixed-price construction subcontracts over $100,000-(i) A payment bond sufficient to pay labor and material costs; and
(ii) A performance bond in an equal amount if available at no additional cost.
228.102-70 Defense Environmental Restoration Program construction
contracts.
For Defense Environmental Restoration Program construction contracts entered into
pursuant to 10 U.S.C. 2701—
(a) Any rights of action under the performance bond shall only accrue to, and be for
the exclusive use of, the obligee named in the bond;
(b) In the event of default, the surety’s liability on the performance bond is limited
to the cost of completion of the contract work, less the balance of unexpended funds.
Under no circumstances shall the liability exceed the penal sum of the bond;
(c) The surety shall not be liable for indemnification or compensation of the obligee
for loss or liability arising from personal injury or property damage, even if the injury or
damage was caused by a breach of the bonded contract; and
(d) Once it has taken action to meet its obligations under the bond, the surety is
entitled to any indemnification and identical standard of liability to which the
contractor was entitled under the contract or applicable laws and regulations.
228.105 Other types of bonds.
Fidelity and forgery bonds generally are not required but are authorized for use when—
(1) Necessary for the protection of the Government or the contractor; or
(2) The investigative and claims services of a surety company are desired.
228.106 Administration.

1998 EDITION

228.1-1

Defense Federal Acquisition Regulation Supplement
Part 228—Bonds and Insurance

228.106-7 Withholding contract payments.
(a) Withholding may be appropriate in other than construction contracts (see FAR
32.112-1(b)).
228.170 Solicitation provision.
When a requirement for a performance bond or other security is included in a
solicitation for dismantling, demolition, or removal of improvements (see FAR 37.300),
use the provision at 252.228-7004, Bonds or Other Security. Set a period of time
(normally ten days) for return of executed bonds.

1998 EDITION

228.1-2