[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR28.202]

[Page 537-538]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 28_BONDS AND INSURANCE--Table of Contents
 
           Subpart 28.2_Sureties and Other Security for Bonds
 
Sec.  28.202  Acceptability of corporate sureties.

    (a)(1) Corporate sureties offered for bonds furnished with contracts 
performed in the United States or its outlying areas must appear on the 
list contained in the Department of the Treasury Circular 570, 
``Companies Holding Certificates of Authority as Acceptable Sureties on 
Federal Bonds

[[Page 538]]

and Acceptable Reinsuring Companies.''
    (2) The penal amount of the bond should not exceed the surety's 
underwriting limit stated in the Department of the Treasury circular. If 
the penal amount exceeds the underwriting limit, the bond will be 
acceptable only if (i) the amount which exceeds the specified limit is 
coinsured or reinsured and (ii) the amount of coinsurance or reinsurance 
does not exceed the underwriting limit of each coinsurer or reinsurer.
    (3) Coinsurance or reinsurance agreements shall conform to the 
Department of the Treasury regulations in 31 CFR 223.10 and 223.11. When 
reinsurance is contemplated, the contracting office generally shall 
require reinsurance agreements to be executed and submitted with the 
bonds before making a final determination on the bonds.
    (4) When specified in the solicitation, the contracting officer may 
accept a bond from the direct writing company in satisfaction of the 
total bond requirement of the contract. This is permissible until 
necessary reinsurance agreements are executed, even though the total 
bond requirement may exceed the insurer's underwriting limitation. The 
contractor shall execute and submit necessary reinsurance agreements to 
the contracting officer within the time specified on the bid form, which 
may not exceed 45 calendar days after the execution of the bond. The 
contractor shall use Standard Form 273, Reinsurance Agreement for a 
Miller Act Performance Bond, and Standard Form 274, Reinsurance 
Agreement for a Miller Act Payment Bond, when reinsurance is furnished 
with Miller Act bonds. Standard Form 275, Reinsurance Agreement in Favor 
of the United States, is used when reinsurance is furnished with bonds 
for other purposes.
    (b) For contracts performed in a foreign country, sureties not 
appearing on Treasury Department Circular 570 are acceptable if the 
contracting officer determines that it is impracticable for the 
contractor to use Treasury listed sureties.
    (c) The Department of the Treasury issues supplements to Circular 
570, notifying all Federal agencies of (1) new approved corporate surety 
companies and (2) the termination of the authority of any specific 
corporate surety to qualify as a surety on Federal bonds. Upon receipt 
of notification of termination of a company's authority to qualify as a 
surety on Federal bonds, the contracting officer shall review the 
outstanding contracts and take action necessary to protect the 
Government, including, where appropriate, securing new bonds with 
acceptable sureties in lieu of outstanding bonds with the named company.
    (d) The Department of the Treasury Circular 570 may be obtained from 
the U.S. Department of the Treasury, Financial Management Service, 
Surety Bond Branch, 401 14th St., SW., 2nd Floor--West Wing, Washington, 
DC 20227.

[48 FR 42286, Sept. 19, 1983, as amended at 54 FR 48986, Nov. 28, 1989; 
68 FR 28083, May 22, 2003]