6.0_Bonding_Requirements_24_CFR_PART_85.36.pdf
PDF 48 KB Posted
- Attached to
- Pettis Park Pavilion State and local contract opportunity
- Solicitation number
- 19-25-CIP
- Issued by
- Volusia County, Florida
About this file
The document is a federal regulation (24 CFR PART 85.36) detailing mandatory bonding requirements for construction and facility improvement contracts involving state, local, and federally recognized tribal governments. The regulation specifies three key bonding requirements for contracts exceeding the simplified acquisition threshold: (1) a bid guarantee equivalent to five percent of the bid price, which can be a bid bond, certified check, or negotiable instrument; (2) a performance bond covering 100 percent of the contract price to secure fulfillment of the contractor's obligations; and (3) a payment bond also covering 100 percent of the contract price to ensure payment of all persons supplying labor and materials.
The bonding requirements are designed to protect the awarding agency's interests, with provisions allowing the agency to accept the grantee's existing bonding policy if the agency determines its interests are adequately protected. Proof of bonding must be verified prior to issuing a notice to proceed. These requirements apply specifically to construction or facility improvement contracts and subcontracts, providing financial safeguards for government entities when entering into significant procurement agreements. The regulation emphasizes the mandatory nature of these bonding requirements and provides a standardized framework for managing financial risks in government contracting.
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Text version
24 CFR PART 85.36 Administrative Requirements for Grants and Cooperative Agreements to State, Local and Federally Recognized Indian Tribal Governments
Compliance with the following bonding requirements is mandatory.
Proof of bonding will be verified prior to issuance of the notice to proceed.
(h) Bonding requirements.
For construction or facility improvement contracts or subcontracts exceeding the simplified acquisition threshold, the awarding agency may accept the bonding policy and requirements of the grantee or sub grantee provided the awarding agency has made a determination that the awarding agency's interest is adequately protected. If such a determination has not been made, the minimum requirements shall be as follows:
(1) A bid guarantee from each bidder equivalent to five percent of the bid price. The bid guarantee shall consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder will, upon acceptance of his bid, execute such contractual documents as may be required within the time specified.
(2) A performance bond on the part of the contractor for 100 percent of the contract price. A performance bond is one executed in connection with a contract to secure fulfillment of all the contractor's obligations under such contract.
(3) A payment bond on the part of the contractor for 100 percent of the contract price. A payment bond is one executed in connection with a contract to assure payment as required by law of all persons supplying labor and material in the execution of the work provided for in the contract.
https://www.hud.gov/sites/documents/24CFR85-36PROC.PDF
File details come from the government source that posted it. Updated .