[Code of Federal Regulations]

[Title 48, Volume 5]

[Revised as of October 1, 2006]

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

[CITE: 48CFR728.105-1]



[Page 37]

 

            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM

 

             CHAPTER 7--AGENCY FOR INTERNATIONAL DEVELOPMENT

 

PART 728_BONDS AND INSURANCE--Table of Contents

 

                           Subpart 728.1_Bonds

 

Sec. 728.105-1  Advance payment bonds.





    (a) Generally, advance payment bonds will not be required in 

connection with USAID contracts containing an advance payment provision. 

In lieu thereof, contracting officers will follow procedures set forth 

in FAR 32.409-3.

    (b) Whenever a contracting officer considers that an advance payment 

bond is necessary, the contracting officer will: (1) Establish a bond 

penalty that will adequately protect interests of the Government, (2) 

use the USAID Advance Payment Bond format, (3) place bond with a surety 

currently approved by the U.S. Treasury Department according to the 

latest Treasury Department Circular 570, (4) stipulate that the cost of 

the bond shall not exceed a rate of $7.50 per $1,000 per annum based on 

the penalty of the bond, without the prior written approval of the 

Office of Procurement, Policy Division (M/OP/P).

    (c) Where the surety's obligation under an advance payment bond 

covers all advances made to the contractor during the term of the 

contract, no release should be issued to the surety until all advances 

made and to be made under the contract have been fully liquidated in 

accordance with the provisions of the contract, such as no-pay vouchers, 

reports of expenditures, or by refund. Where the surety's obligation 

under the bond is limited to advances made during a specified period of 

time, no release should be issued to the surety until all advances made 

and to be made during the specified period have been liquidated as 

aforesaid.



[49 FR 13249, Apr. 3, 1984, as amended at 50 FR 50302, Dec. 10, 1985; 55 

FR 6802, Feb. 27, 1990; 56 FR 67224, Dec. 30, 1991; 59 FR 33446, June 

29, 1994]