FSM_Section_J-Attachment_6.pdf

Attachment 6 Performance and Payment Bond

PERFORMANCE AND PAYMENT BONDS-OTHER THAN CONSTRUCTION (JULY 2000)

(a) Definitions. As used in this clause--

Original Contract value means the award price of the Contract. Original Contract value does not include the price of any options, except those options exercised at the time of Contract award.

(b) HUD is entrusting the Contractor with the care of valuable government property. Therefore, for the protection of the Federal Government and persons supplying labor or materials for the work under this PWS, the Contractor shall furnish a performance and a payment bond, or the

Contractor may furnish the alternatives to performance and payment bonds described in FAR

28.204. The Contractor shall furnish a performance bond (Standard Form 1418) for the protection of the Government in an amount equal to two percent (2%) of the original Contract value and a payment bond (Standard Form 1416) in an amount equal to two percent (2%) of the original Contract value. The Contractor should note that original Contract value is the estimated value of the Contract.

(c) In accordance with FAR 28.103-4, the Contractor shall furnish all executed bonds, including any necessary reinsurance agreements, to the Contracting Officer, within 30 calendar days following the effective date of the Contract, but in any event, before starting work. For the purposes of this clause, “starting work” means the 61 st day after the effective date of the Contract when the

Contractor shall begin performance of all Contract services related to Conveyances, Property

Management, Custodial Properties, Pre-conveyance Inspections unless otherwise extended by the Contracting Officer.

(d) The Government may require additional performance and payment bond protection if the

Contract value is increased. The Government may secure the additional protection by directing the Contractor to increase the penal amount of the existing bonds or to obtain additional bonds.

The bonds shall be in the form of firm commitment, supported by corporate sureties whose names appear on the list contained in Treasury Department Circular 570, individual sureties, or by other acceptable security such as postal money order, certified check, cashier's check, irrevocable letter of credit, or, in accordance with Treasury

Department regulations, certain bonds or notes of the United States. Treasury Circular 570 is published in the

Federal Register, or may be obtained from the U.S. Department of Treasury, Financial Management Service, Surety Bond Branch, 401 14th Street, NW, 2nd Floor, West Wing, Washington, DC 20227.