FAR 28.106—Administration.

Bonds and bond-related forms.

FAR 28.106-1 is the government’s form-selection rule for bond-related instruments. It tells contracting officers and contractors which Standard Forms (SFs) and Optional Forms (OFs) must be used when a bid bond, performance bond, payment bond, or individual surety is required, and it also identifies the specific forms for annual bid bonds, annual performance bonds, reinsurance agreements, consents of surety, bonds for other than construction contracts, and release of personal property from escrow. The section matters because bond enforceability, surety acceptance, and administrative processing often depend on using the correct prescribed form and completing it according to the form instructions. It also makes clear that these forms are generally mandatory, except in foreign countries, which means agencies cannot freely substitute their own paperwork when the FAR prescribes a form. In practice, this section is a cross-reference hub: it does not set the substantive bonding requirements itself, but it directs users to the FAR provisions that govern when each form is required and how it is used. For contractors, the practical significance is that a wrong form, missing continuation sheet, or incorrect surety consent can delay award or invalidate bond acceptance. For contracting officers, it is a compliance checkpoint to ensure the solicitation and award package use the correct bond documents for the type of contract and security required.

Substitution of surety bonds.

FAR 28.106-2 addresses when and how a new surety bond may replace an existing bond that has already been approved, and what notice must follow that approval. The section covers substitution of surety bonds, the approval authority for that substitution, the possibility that agency regulations may assign or modify that authority, and the contracting officer’s duty to notify the principal and surety on the original bond once the new bond becomes effective. In practice, this rule matters when a contractor needs to change sureties, replace an inadequate or expiring bond, or otherwise update bond coverage without leaving the government unprotected. It ensures continuity of financial security for the bonded obligation while also creating a clear administrative record of when the old bond is superseded. For contractors, it means a replacement bond is not effective just because it has been issued; it must be approved by the proper authority. For contracting officers, it means they must track the effective date carefully and make sure the original bond parties are informed so there is no confusion about which bond is in force.

Additional bond and security.

FAR 28.106-3 explains how agencies must document and obtain additional bond coverage when the original bond is no longer enough. It covers two situations: first, when the added coverage is backed in whole or in part by the original surety or sureties, and second, when the added coverage is backed by a new surety or by one of the alternative security methods allowed under FAR 28.204 instead of a corporate or individual surety. The section identifies the exact Standard Forms the agency must use in each case: SF 1415, Consent of Surety and Increase of Penalty, for increases involving the original surety; and SF 25, SF 1418, SF 25A, or SF 1416, depending on whether the bond is a performance or payment bond and whether the contract is construction or nonconstruction. In practice, this section ensures the government has a legally effective and properly documented increase in bond protection when the required penal sum must be raised after award or during performance. It matters because using the wrong form, or failing to match the form to the surety arrangement, can leave the government with defective security and create enforceability problems if the contractor defaults.

Contract clause.

FAR 28.106-4 tells contracting officers which bond-related clauses must be included in solicitations and contracts when performance or payment bonds are required. It covers two specific clauses: FAR 52.228-2, Additional Bond Security, which is required whenever bonds are required, and FAR 52.228-12, Prospective Subcontractor Requests for Bonds, which is required when a payment bond will be furnished under the Miller Act bond framework in 40 U.S.C. chapter 31, subchapter III. The section also identifies an important exception: the 52.228-12 clause is not used for acquisitions of commercial products or commercial services as defined in FAR subpart 2.1. In practice, this section ensures the government can demand extra bond protection when needed and gives prospective subcontractors a formal way to request bond information on covered construction-type contracts. For contracting officers, the rule is a mandatory clause-insertion requirement, not a discretionary best practice. For contractors, it affects solicitation review, subcontracting communications, and compliance planning on bonded work.

Consent of surety.

FAR 28.106-5 tells contracting officers when they must get a surety’s written consent before modifying a bonded contract, and when that consent is not needed. It covers three main situations: adding a bond from a surety other than the original surety, making a modification without requiring an additional bond when the change is either new work outside the original scope or a price change over the stated threshold, and obtaining consent in connection with a novation agreement under FAR subpart 42.12. It also creates an exception for contracts secured by other forms of security listed in FAR 28.204, where consent of surety is not required for the kinds of modifications described in paragraph (a). Finally, it requires agencies to use Standard Form 1414, Consent of Surety, for all types of contracts. In practice, this section protects the Government’s bond rights, prevents unintended release or impairment of the surety’s obligations, and forces contracting officers to check bonding implications before issuing certain contract changes.

Furnishing information.

FAR 28.106-6 explains when and how the Government may or must share bond-related information on a contract. It covers four related topics: information the surety may request about contract progress, payments, and estimated completion; information the contracting officer must provide to subcontractors and suppliers when a payment bond exists; the requirement to furnish certified copies of the bond and contract to certain requesters who submit an affidavit showing unpaid labor/materials or a lawsuit on the bond; and a separate statutory rule requiring prompt disclosure of payment-bond information to subcontractors and prospective subcontractors on contracts other than commercial products or commercial services. In practice, this section helps protect sureties, subcontractors, and suppliers by giving them access to information they need to assess risk, pursue payment, or decide whether to extend credit or continue performance. It also limits disclosure to the categories authorized by law and allows reasonable fees for copying or preparation in some cases. For contracting officers, the section creates both mandatory disclosure duties and practical recordkeeping/response obligations whenever a bond-related request is received.

Withholding contract payments.

FAR 28.106-7 addresses when the Government may and may not withhold contract payments because subcontractors or suppliers have not been paid. It draws a sharp distinction between withholding during contract performance and withholding after completion, and it also points readers to labor-standards withholding rules in FAR part 22. In general, agencies are prohibited from withholding progress or other payments due to the contractor or an assignee merely because lower-tier firms have not been paid. After the work is complete, however, if the Government receives written notice from the surety that the contractor has failed to pay subcontractors or suppliers, the contracting officer must withhold final payment unless the surety agrees to hold the Government harmless from any resulting liability. Final payment may then be released when the contractor and surety resolve the matter or when a court determines the parties’ rights. In practice, this section protects the Government from becoming a collection mechanism for subcontractor disputes while preserving a narrow post-completion safeguard tied to surety notice and liability protection.

Payment to subcontractors or suppliers.

FAR 28.106-8 addresses when a contracting officer may authorize payment to a subcontractor or supplier from an irrevocable letter of credit (ILC) or other cash equivalent security. The section is narrow but important: it protects the government’s interests when a contractor has provided financial security in lieu of other payment protections, and it prevents the contracting officer from releasing those funds based on disputed or unverified claims. In practice, the rule applies only after the contractor’s payment obligation to a subcontractor or supplier is established through one of three specified forms of proof: a judicial determination of the parties’ rights, a signed notarized statement by the contractor admitting the amount is due and owed, or a signed agreement between the parties fixing the amount due and owed. The section is designed to reduce the risk of improper disbursement, double payment, or payment of contested amounts. For contractors and subcontractors, it means that access to ILC-backed funds is not automatic; for contracting officers, it means they must verify the required documentation before authorizing payment.