FAR 28.203—Individual Sureties.

Acceptability of individual sureties.

FAR 28.203-1 explains when an individual surety may be used, what assets that surety may pledge, how those assets are valued, and how the contracting officer must verify acceptability before relying on the bond. It covers the types of bonds an individual surety can support, the requirement that pledged assets be eligible Treasury collateral, the need for the surety to execute the bond and submit SF 28 with a security interest, and the rule that the net adjusted value of pledged assets must meet or exceed the bond’s penal amount. It also addresses use of multiple individual sureties, Treasury review and valuation of pledged assets, the contracting officer’s acceptability determination, setup of the pledged asset collateral account, and the consequences if the surety is unacceptable. Finally, it covers substitution of a surety when Treasury cannot assess the assets in time and referral of suspected criminal or fraudulent activity. In practice, this section protects the Government by ensuring that an individual surety is financially credible, the pledged collateral is legally eligible and properly valued, and the bond can actually be enforced if the contractor defaults.

Substitution of assets.

FAR 28.203-2 addresses how an individual surety can replace one pledged asset with another while a bond or guarantee remains outstanding. It covers the surety’s right to request substitution, the requirement to make that request in writing, the need to submit a revised SF 28 (Affidavit of Individual Surety), and the contracting officer’s authority to approve or deny the request. The section also ties the decision back to FAR 28.203-1, meaning the substitute asset must meet the same adequacy and acceptability standards used for the original pledged asset. In practice, this provision matters because it allows flexibility when a surety needs to change collateral, but it also protects the Government by ensuring the replacement asset still fully secures the bond or guarantee obligations. For contractors and sureties, the key issue is that substitution is not automatic; it depends on a contracting officer’s determination that the new asset is sufficient. For contracting officers, the section requires a fresh review of the collateral before agreeing to any change.

Release of security interest.

FAR 28.203-3 explains when and how a contracting officer may release the Government’s security interest in an individual surety’s pledged assets. It covers three main situations: full release after the required retention period, early release of assets supporting a bid guarantee when no award will result, and partial release of assets supporting a performance bond after substantial performance. It also addresses special treatment for payment-bond collateral, including release to a subcontractor or supplier when the Government receives either a Federal district court judgment or a sworn claim plus notarized surety authorization. The section distinguishes among contracts subject to the Miller Act bonds statute, contracts using alternative payment protection, and other contracts not covered by the bonds statute, because the retention period differs in each case. In practice, this rule protects the Government and unpaid claimants while preventing collateral from being held longer than necessary. It also requires the contracting officer to consult legal counsel before releasing the security interest, which helps ensure the release is legally sound and consistent with the bond obligations and any outstanding claims.

Solicitation provision and contract clause.

FAR 28.203-4 tells contracting officers which standard solicitation provision and contract clause to use when an individual surety is involved in a bid guarantee, performance bond, or payment bond. Specifically, it requires insertion of the provision at 52.228-17, Individual Surety—Pledge of Assets (Bid Guarantee), in solicitations that require a bid guarantee, and insertion of the clause at 52.228-11, Individual Surety—Pledge of Assets, in solicitations and contracts that require performance or payment bonds. The section exists to make sure the Government has a consistent, enforceable way to verify and document the assets pledged by an individual surety, rather than relying on informal assurances. In practice, this means the contracting officer must identify when a bond or bid guarantee will be backed by an individual surety and then include the correct FAR provision or clause in the solicitation and, where applicable, the resulting contract. For contractors, it means any proposed individual surety arrangement must comply with the prescribed pledge-of-assets requirements. For the Government, the section helps protect against inadequate or unsupported surety commitments and supports the enforceability of bond security.

Exclusion of individual sureties.

FAR 28.203-5 explains when and how the Government may exclude an individual from acting as a surety on bonds submitted by offerors for executive branch procurements, and what that exclusion means in practice. It covers the authority to impose the exclusion, the specific causes that can justify exclusion, the requirement to record the exclusion in the System for Award Management (SAM), the contracting officer’s duty to reject bonds from excluded sureties unless there is a written override by the agency head or designee, and the additional consequence that the excluded individual is also barred from acting as a contractor under FAR subpart 9.4. The section exists to protect the Government from unreliable, dishonest, or financially irresponsible sureties whose bond support could put contract performance or payment protections at risk. In practice, it gives agencies a formal tool to remove problematic individual sureties from the procurement process and ensures contracting officers can rely on SAM exclusion records when evaluating bond acceptability. For contractors and sureties, it means that misstatements, undisclosed liabilities, or failure to honor bond obligations can have broad and lasting consequences beyond a single procurement.