[Code of Federal Regulations]

[Title 48, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR28.001]



[Page 548-549]

 

            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM

 

                CHAPTER 1--FEDERAL ACQUISITION REGULATION

 

PART 28_BONDS AND INSURANCE--Table of Contents

 

Sec. 28.001  Definitions.



    As used in this part--

    Attorney-in-fact means an agent, independent agent, underwriter, or 

any other company or individual holding a power of attorney granted by a 

surety (see also power of attorney at 2.101).

    Bid means any response to a solicitation, including a proposal under 

a negotiated acquisition. See the definition of ``offer'' at 2.101.

    Bidder means any entity that is responding or has responded to a 

solicitation, including an offeror under a negotiated acquisition.

    Bid guarantee means a form of security assuring that the bidder (1) 

will not withdraw a bid within the period specified for acceptance and 

(2) will execute a written contract and furnish required bonds, 

including any necessary coinsurance or reinsurance agreements, within 

the time specified in the bid, unless a longer time is allowed, after 

receipt of the specified forms.

    Bond means a written instrument executed by a bidder or contractor 

(the ``principal''), and a second party (``the surety'' or ``sureties'') 

(except as provided in 28.204), to assure 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. The types of bonds and related documents are as follows:

    (1) An advance payment bond secures fulfillment of the contractor's 

obligations under an advance payment provision.

    (2) An annual bid bond is a single bond furnished by a bidder, in 

lieu of separate bid bonds, which secures all



[[Page 549]]



bids (on other than construction contracts) requiring bonds submitted 

during a specific Government fiscal year.

    (3) An annual performance bond is a single bond furnished by a 

contractor, in lieu of separate performance bonds, to secure fulfillment 

of the contractor's obligations under contracts (other than construction 

contracts) requiring bonds entered into during a specific Government 

fiscal year.

    (4) A patent infringement bond secures fulfillment of the 

contractor's obligations under a patent provision.

    (5) A payment bond assures payments as required by law to all 

persons supplying labor or material in the prosecution of the work 

provided for in the contract.

    (6) A performance bond secures performance and fulfillment of the 

contractor's obligations under the contract.

    Consent of surety means an acknowledgment by a surety that its bond 

given in connection with a contract continues to apply to the contract 

as modified.

    Penal sum or penal amount means the amount of money specified in a 

bond (or a percentage of the bid price in a bid bond) as the maximum 

payment for which the surety is obligated or the amount of security 

required to be pledged to the Government in lieu of a corporate or 

individual surety for the bond.

    Reinsurance means a transaction which provides that a surety, for a 

consideration, agrees to indemnify another surety against loss which the 

latter may sustain under a bond which it has issued.



[48 FR 42286, Sept. 19, 1983, as amended at 61 FR 31652, June 20, 1996; 

62 FR 44806, Aug. 22, 1997; 66 FR 2130, Jan. 10, 2001; 67 FR 13056, Mar. 

20, 2002]