[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: 48CFR28.202]



[Page 556-557]

 

            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 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



[[Page 557]]



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]