Contractor's Bond (less $1 million)

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U.S. Department of Agriculture
Rural Utilities Service

CONTRACTOR'S BOND
(Use only when contract is less than $1 million and Surety has accepted an SBA* Guarantee)
1.

Know all persons that we, _______________________________________________________________ , as
Principal, and __________________________________________________________________ , as Surety,
are held and firmly bound unto ______________________________________________________________
(hereinafter called the "Owner") and unto the United States of America (hereinafter called the "Government")
and unto all persons, firms and corporations who or which may furnish materials for or perform labor on a
Rural Utilities Service project known as _______________________________________________________
and to their successors and assigns, in the penal sum of ___________________________________________
dollars ($_____________________________), as hereinafter set forth and for the payment of which sum well
and truly to be made we bind ourselves, our executors, administrators, successors and assigns jointly and
severally by these presents. Said project is described in a certain construction contract (hereinafter called the
"Construction Contract") between the Owner and the Principal, dated _______________________, 20_____,
pursuant and subject to a certain loan contract (hereinafter called the "Loan Contract") between the Owner
and the Government, acting through the Administrator of the Rural Utilities Service (hereinafter called the
"Administrator").

2.

The condition of this obligation is such that if the Principal shall well and truly perform and fulfill all the
undertakings, covenants, terms, conditions and agreements of the Construction Contract and any amendments
thereto, whether such amendments are for additions, decreases, or changes in materials, their quantity, kind or
price, labor costs, mileage, routing or any other purpose whatsoever, and whether such amendments are made
with or without notice to the Surety, and shall fully indemnify and save harmless the Owner and the
Government from all costs and damages which they, or either of them, shall suffer or incur by reason of any
failure so to do, and shall fully reimburse and repay the Owner and the Government for all outlay and expense
which they, or either of them shall incur in making good any such failure of performance on the part of the
Principal, and shall promptly make payment to all persons working on or supplying labor or materials for use
in the construction of the project contemplated in the Construction Contract and any amendments thereto, in
respect of such labor or materials furnished and used therein, to the full extent thereof, and in respect of such
labor or materials furnished but not so used, to the extent of the quantities estimated in the Construction
Contract and any amendments thereto to be required for the construction of the project, and shall well and
truly reimburse the Owner and the Government, as their respective interests may appear, for any excess in cost
of construction of said project over the cost of such construction as provided in the Construction Contract and
any amendments thereto, occasioned by any default of the Principal under the Construction Contract and any
amendments thereto, then this obligation shall be null and void, but otherwise shall remain in full force and
effect.

3.

Provided, that the liability of the Principal and Surety hereunder to the Government shall be subject to the
same limitations and defenses as may be available to them against a claim hereunder by the Owner, provided,
however, that the Government may, at its option, perform any obligations of the Owner required by the
contract.

4

It is expressly agreed that this bond shall be deemed amended automatically and immediately, without formal
and separate amendments hereto, upon any amendment to the Construction Contract, so as to bind the
Principal and the Surety to the full and faithful performance of the Construction Contract as so amended,

* Small Business Administration
RUS FORM 168c (Rev. 2-04)

provided only that the total amount of all increases in the cost of construction shall not exceed 20 percent of the
amount of the maximum price set forth in the Construction Contract. The term "Amendment," wherever used in
this bond, and whether referring to this bond, the Construction Contract or the Loan Contract shall include any
alteration, addition, extension, modification, amendment, rescission, waiver, release or annulment, of any
character whatsoever.
5.

It is expressly agreed that any amendment which may be made by agreement or otherwise between the
Principal and the Owner in the terms, provisions, covenants and conditions of the Construction Contract, or in
the terms, provisions, covenants and conditions of the Loan Contract (including, without limitation, the
granting by the Administrator to the Owner of any extension of time for the performance of the obligations of
the Owner under the Loan Contract or the granting by the Administrator or the Owner to the Principal of any
extension of time for the performance of the obligations of the Principal under the Construction Contract, or
the failure or refusal of the Administrator or the Owner to take any action, proceeding or step to enforce any
remedy or exercise any right under either the Construction Contract or the Loan Contract, or the taking of any
action, proceeding or step by the Administrator or the Owner, acting in good faith upon the belief that the same
is permitted by the provisions of the Construction Contract or the Loan Contract) shall not in any way release
the Principal and the Surety, or either of them or their respective executors, administrators, successors or
assigns, from liability hereunder. The Surety hereby acknowledges receipt of notice of any amendment,
indulgence or forbearance, made, granted or permitted.

6.

This bond is made for the benefit of all persons, firms and corporations who or which may furnish any
materials or perform any labor for or on account of the construction to be performed under the Construction
Contract and any amendments thereto, and they, and each of them, are hereby made obligees hereunder with
the same force and effect as if their names were written herein as such, and they and each of them may sue
hereon.

7.

Provided, further, that no suit or action shall be commenced hereunder by any person, firm, or corporation
who performed work or labor or who furnished materials for the project: (a) Unless such person, firm, or
corporation, other one having a direct contract with the Principal (or with the Government in the event the
Government is performing the obligation of the Owner), shall have given detailed written notice of claim to:
The Principal, and the Owner, within ninety (90) days after such person, firm, or corporation did or performed
the last of the work or labor, or furnished the last of the materials for which such claim is made. (b) After the
expiration of one (1) year following the date on which Principal ceased work on said contract, it being
understood, however, that if any limitation embodied in the Bond is prohibited by any law controlling the
construction hereof, such limitation shall be deemed to be amended so as to equal to the minimum period of
limitation permitted by such law.

In witness whereof, the undersigned have caused this instrument to be executed and their respective corporate seals
to be affixed and attested by their duly authorized representatives this
_________________________________ day of ________________________________ , 20______ .

(Seal)
Principal

ATTEST:

By

Secretary

RUS FORM 168c (Rev. 2-04)

(Seal)
Surety

ATTEST:

By

Secretary

Address of Surety's Home Office

By
Resident Agent of Surety

Signatures: The Contractor's Bond must be signed with the full name of the Contractor. If the Contractor is a partnership the
Contractor's Bond must be signed in the partnership name by a partner. If the Contractor is a corporation the Contractor's
Bond must be signed in the corporate name by a duly authorized officer and the corporate seal affixed and attested by the
Secretary of the corporation. A typewritten copy of all such names and signatures shall be appended.
Power of Attorney: The Contractor's Bond must be accompanied by a power of attorney authorizing execution on behalf of the
Surety and, in jurisdictions so requiring should be countersigned by a duly authorized resident agent of the Surety.

RUS FORM 168c (Rev. 2-04)