[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: 48CFR28.203-5]

[Page 541-542]
 
            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.  28.203-5  Release of lien.

    (a) After consultation with legal counsel, the contracting officer 
shall release the security interest on the individual surety's assets 
using the Optional Form 90, Release of Lien on Real Property, or 
Optional Form 91, Release of Personal Property from Escrow, or a similar 
release as soon as possible consistent with the conditions in 
subparagraphs (a) (1) and (2) of this subsection. A surety's assets 
pledged in support of a payment bond may be released to a subcontractor 
or supplier upon Government receipt of a Federal district court

[[Page 542]]

judgment, or a sworn statement by the subcontractor or supplier that the 
claim is correct along with a notarized authorization of the release by 
the surety stating that it approves of such release.
    (1) Contracts subject to the Miller Act. The security interest shall 
be maintained for the later of (i) 1 year following final payment, (ii) 
until completion of any warranty period (applicable only to performance 
bonds), or (iii) pending resolution of all claims filed against the 
payment bond during the 1-year period following final payment.
    (2) Contracts subject to alternative payment protection (28.102-
1(b)(1)). The security interest shall be maintained for the full 
contract performance period plus one year.
    (3) Other contracts not subject to the Miller Act. The security 
interest shall be maintained for 90 days following final payment or 
until completion of any warranty period (applicable only to performance 
bonds), whichever is later.
    (b) Upon written request, the contracting officer may release the 
security interest on the individual surety's assets in support of a bid 
guarantee based upon evidence that the offer supported by the individual 
surety will not result in contract award.
    (c) Upon written request by the individual surety, the contracting 
officer may release a portion of the security interest on the individual 
surety's assets based upon substantial performance of the contractor's 
obligations under its performance bond. Release of the security interest 
in support of a payment bond must comply with the subparagraphs (a) (1) 
through (3) of this subsection. In making this determination, the 
contracting officer will give consideration as to whether the unreleased 
portion of the lien is sufficient to cover the remaining contract 
obligations, including payments to subcontractors and other potential 
liabilities. The individual surety shall, as a condition of the partial 
release, furnish an affidavit agreeing that the release of such assets 
does not relieve the individual surety of its obligations under the 
bond(s).

[54 FR 48988, Nov. 28, 1989, as amended at 61 FR 31652, June 20, 1996]