[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: 48CFR28.106-7]



[Page 555]

 

            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM

 

                CHAPTER 1--FEDERAL ACQUISITION REGULATION

 

PART 28_BONDS AND INSURANCE--Table of Contents

 

           Subpart 28.1_Bonds and Other Financial Protections

 

Sec. 28.106-7  Withholding contract payments.



    (a) During contract performance, agencies shall not withhold 

payments due contractors or assignees because subcontractors or 

suppliers have not been paid.

    (b) If, after completion of the contract work, the Government 

receives written notice from the surety regarding the contractor's 

failure to meet its obligation to its subcontractors or suppliers, the 

contracting officer shall withhold final payment. However, the surety 

must agree to hold the Government harmless from any liability resulting 

from withholding the final payment. The contracting officer will 

authorize final payment upon agreement between the contractor and surety 

or upon a judicial determination of the rights of the parties.

    (c) For any withholding incident to the labor standards provisions 

of the contract, see part 22.