[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR31.205-4]

[Page 589-590]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
              (This book contains chapter 1, parts 1 to 51)

                CHAPTER 1--FEDERAL ACQUISITION REGULATION
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PART 31_CONTRACT COST PRINCIPLES AND PROCEDURES--Table of Contents
 
          Subpart 31.2_Contracts With Commercial Organizations
 
Sec. 31.205-4  Bonding costs.

    (a) Bonding costs arise when the Government requires assurance 
against financial loss to itself or others by reason of the act or 
default of the contractor. They arise also in instances where the 
contractor requires similar assurance. Included are such bonds as bid, 
performance, payment, advance payment, infringement, and fidelity bonds.
    (b) Costs of bonding required pursuant to the terms of the contract 
are allowable.
    (c) Costs of bonding required by the contractor in the general 
conduct of its business are allowable to the extent

[[Page 590]]

that such bonding is in accordance with sound business practice and the 
rates and premiums are reasonable under the circumstances.