[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: 48CFR28.203-5]



[Page 560]

 

            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 

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]