FAR 28.2—Subpart 28.2

Scope of subpart.

FAR 28.200 is the scope statement for FAR Subpart 28.2, and it tells readers what this subpart is about: the use of sureties and other security to protect the Government from financial loss. In practical terms, it frames the rules that contracting officers use when a contractor must provide financial protection, most commonly through bonds, guarantees, or other acceptable security arrangements. The section does not itself set out the detailed bonding requirements; instead, it establishes that the subpart’s procedures are intended to reduce the Government’s risk if a contractor defaults, fails to pay subcontractors or suppliers, or otherwise creates a financial exposure that the Government needs to guard against. For contractors, this means the subpart is the gateway to understanding when security may be required and what forms of protection may be acceptable. For contracting officers, it signals that decisions about sureties and security must be made under the procedures in this subpart, with the Government’s financial protection as the central objective.

Requirements for security.

FAR 28.201 explains the basic security requirements for bonds used in federal contracts for supplies, services, and construction. It tells agencies that they must obtain adequate security when bonds are required or used, and it identifies the acceptable forms of security: corporate or individual sureties, or other security authorized under FAR 28.204 in lieu of sureties. It also limits how solicitations may be written by prohibiting language that would unnecessarily block offerors from using any surety or security method allowed by this subpart, unless another law or regulation specifically forbids it. In practice, this section is about preserving competition while ensuring the Government has reliable financial protection if a contractor fails to perform or meet bond obligations. It matters to contracting officers because solicitation language and bond acceptability must be handled carefully, and it matters to contractors because it protects their ability to use approved bonding alternatives rather than being forced into a single surety format.

Acceptability of corporate sureties.

FAR 28.202 explains when a corporate surety is acceptable for federal bonds and how contracting officers should verify and manage that acceptability. It covers four main topics: the Treasury Department Circular 570 approved-surety list, underwriting limits and when coinsurance or reinsurance is needed, the special rules for reinsurance agreements and the use of SF 273, SF 274, and SF 275, the limited exception for foreign-country contracts where non-Treasury-listed sureties may be used, and Treasury’s notices about additions or terminations of surety authority. In practice, this section is the government’s screening tool for bond reliability: it helps ensure the surety has legal authority and sufficient financial backing to support the bond obligation. It also gives contracting officers a process for handling bonds that exceed a surety’s limit, including requiring reinsurance before final acceptance. Finally, it requires agencies to react quickly if Treasury withdraws a surety’s authority, so the Government’s protection is not left exposed on existing contracts.

Individual Sureties.

Alternatives in lieu of corporate or individual sureties.

FAR 28.204 explains when a contractor may use alternatives to a corporate or individual surety to satisfy a bond requirement, and how those alternatives are handled. It covers the types of security that may be deposited in lieu of a surety, the requirement to note that substitution in the bond form, the contractor’s role as principal on the bond, and the agency’s duty to safeguard and later return the security when the bond obligation ends. It also addresses partial release of deposited security when the conditions in FAR 28.203-3(c) are met, including the contractor’s obligation to provide an affidavit confirming that the release does not reduce bond liability. Finally, it allows combinations of security types and surety bonds, and permits substitution among approved security types or between security and additional surety bonds while the bond is still required. In practice, this section gives contractors flexibility in how they secure bond obligations, while requiring contracting officers and agencies to manage the security carefully to avoid loss, improper release, or misunderstanding about continuing bond liability.