FAR Part 28 Flashcards

Question

Individual Sureties

Answer 1

Acceptable for all types of bonds except position schedule bonds The contracting officer shall determine the acceptability of individuals proposed as sureties The individual must have pledged assets sufficient to cover the bond obligation

Answer 2

A contract which provides that for a stipulated consideration, one party undertakes to indemnify another against loss, damage, or liability arising from an unknown or contingent event

Answer 3

This part prescribes requirements for obtaining financial protection against losses under contracts that result from the use of the sealed bid or negotiated methods. It covers bid guarantees, bonds, alternative payment protections, security for bonds, and insurance.

Answer 4

A form of security ensuring that the bidder will not withdraw a bid within the period specified for acceptance and will execute a written contract and furnish required bonds, within the allotted time following award.

Answer 5

A written instrument executed by a bidder or contractor (the principal) and a second party (the surety)(except as provided in FAR 28.204) to ensure fulfillment of the principal's obligations to a third party (the obligee or government) identified in the bond. If the principal's obligations are not met, the bond assures payment, to the extent stipulated, of any loss sustained by the obligee.

Answer 6

* Advance payment bond-secures fulfillment of the contractor's obligations under an advance payment provision; *Annual bid bond—a single bond, in lieu of separate bonds, which secures all bids on other than construction contracts requiring bonds submitted during a specific fiscal year; * Annual performance bond-a single bond, in lieu of separate performance bonds, to secure fulfillment of the contractor's obligations under contracts other than for construction requiring bonds entered into during a specific fiscal year; *Patent infringement bond-secures fulfillment of the contractor's obligations under a patent provision; * Payment bond-ensures payments as required by law to all persons supplying labor or material in the prosecution of the work provided for in the contract; and *Performance bond-secures performance and fulfillment of the contractor's obligations under the contract.

Answer 7

A contract that provides that for a stipulated consideration, one party undertakes to indemnify another against loss, damage, or liability arising from an unknown or contingent event.

Answer 8

unless a performance bond or a performance and payment bond is also required. In sealed bidding, noncompliance with a solicitation requirement for a bid guarantee requires rejection of the bid except for those situations described in FAR 28.101-4(c).

Answer 9

for any construction contract valued in excess of the amount referred to in (FAR 28.102-3(a). Generally, such bonds are not required for other than construction contracts; however, in some situations, performance bonds may be appropriate.

Answer 10

for contracts exceeding the simplified acquisition threshold when necessary to protect the government's interest. Situations that may warrant a performance bond are delineated in Unless the contracting officer determines that a lesser amount is adequate for the protection of the government, the penal amount of performance bonds must equal 100 percent of the original contract price; and if the contract price increases, an additional amount equal to 100 percent of the increase.

Answer 11

labor or materials in the prosecution of the work provided for in the contract. They are required only when a performance bond is required and it is determined to be in the government's best interest to use them. Penal amounts are determined by the contracting officer.

Answer 12

U.S. bonds or notes; certified or cashier's checks, bank drafts, money orders, or currency; or an irrevocable letter of credit (ILC). The contractor must furnish all bonds or alternative payment protection, including any necessary reinsurance agreements, before receiving a notice to proceed with the work or being allowed to start work.

Answer 13

individual or corporation legally liable for the debt, default, or failure of a principal to satisfy a contractual obligation. There are three types: individual, corporate, and co-surety (one of two or more sureties that are jointly liable for the penal sum of the bond).

Answer 14

to support bond obligations with stable U.S.-backed securities, as specified in 31 CFR part 225. The Department of the Treasury, Bureau of the Fiscal Service must review those assets to ensure they meet established eligibility

Answer 15

corporate or individual sureties or any of the types of security authorized in lieu of sureties (i.e., United States bonds or notes, certified or cashier's checks, bank drafts, Post Office money orders, or currency, or an irrevocable letter of credit).

Answer 16

purchase or self-coverage, except when the government agrees to indemnify the contractor under specified circumstances or the contract specifically relieves the contractor of liability for loss or damage to government property.

Answer 17

(e.g., workers' compensation). Insurance is also required when commingling of property, type of operation, circumstances of ownership, or condition of the contract make it necessary for the protection of the government.

Answer 18

circumstances agencies may specify insurance requirements under fixed-price contracts. Examples of such circumstances include the following: the contractor is, or as a separate operation, engaged principally in government work; government property is involved; work is to be performed on a government installation; or the government elects to assume risks for which the contractor ordinarily obtains commercial insurance.

FAR Part 28 Flashcards

Bonds and Insurance