FAR 28.105-1—Advance payment bonds.
Plain-English Summary
FAR 28.105-1 addresses when the Government may require an advance payment bond and who decides how much protection is needed. It covers two core topics: the condition for requiring the bond—there must be an advance payment provision in the contract and no performance bond furnished—and the contracting officer’s duty to set the bond amount. In practice, this section is about protecting the Government when it pays money to a contractor before receiving the contracted work or supplies. It limits advance payment bonds to situations where they are actually needed, rather than making them a routine requirement. It also gives the contracting officer discretion to size the bond based on the risk and the amount of advance payments, so the Government is covered if the contractor fails to perform or repay the advance. For contractors, this section signals that advance funding can trigger additional security requirements, which may affect financing, bonding costs, and award timing.
Key Rules
Only with advance payments
An advance payment bond may be required only if the contract includes an advance payment provision. If the contract does not authorize advance payments, this section does not provide a basis for requiring the bond.
No performance bond furnished
The bond may be required only when a performance bond is not furnished. If a performance bond is already in place, the Government generally relies on that protection instead of adding an advance payment bond.
Protect Government funds
The contracting officer must determine the amount of the advance payment bond needed to protect the Government. The amount should be tied to the Government’s exposure from the advance payments, not set arbitrarily.
Responsibilities
Contracting Officer
Decide whether an advance payment bond is appropriate based on the contract terms and whether a performance bond is furnished. Determine the bond amount necessary to protect the Government’s financial interest.
Contractor
Provide the required advance payment bond if the contract includes advance payments and no performance bond is furnished. Ensure the bond amount and terms satisfy the contracting officer’s requirement.
Government
Use advance payment bonds only in the limited circumstances allowed by the rule and rely on them to protect public funds when advance payments are made without performance bond coverage.
Practical Implications
This rule matters most when the Government is paying before performance, because it creates a backstop if the contractor defaults or fails to repay the advance.
Contractors should expect added cost and administrative burden if an advance payment bond is required, especially when they do not also provide a performance bond.
A common pitfall is assuming an advance payment bond is automatic whenever advance payments are allowed; it is only available when the contract has that provision and no performance bond is furnished.
Another key issue is bond sizing: if the amount is too low, the Government may be underprotected; if too high, it can create unnecessary burden and delay award or financing.
Contracting officers should document the basis for the bond amount so the requirement is defensible and aligned with the Government’s actual risk exposure.
Official Regulatory Text
Advance payment bonds may be required only when the contract contains an advance payment provision and a performance bond is not furnished. The contracting officer shall determine the amount of the advance payment bond necessary to protect the Government.