FAR 28—Bonds and Insurance

Scope of part.

FAR 28.000 is the scope statement for FAR Part 28, which tells contracting officers and contractors what kinds of financial protection requirements may apply when a contract is awarded using sealed bidding or negotiated procedures. The part covers bid guarantees, bonds, alternative payment protections, security for bonds, and insurance, all of which are intended to reduce the Government’s risk of loss when a contractor fails to perform, fails to pay subcontractors or suppliers, or otherwise creates financial exposure on a contract. In practice, this section signals that Part 28 is not about one single instrument, but a family of risk-mitigation tools that may be required depending on the acquisition method, contract type, and the Government’s need for protection. It matters because these requirements can affect competition, proposal responsiveness, contract award timing, financing, and the contractor’s cost of doing business. For contracting officers, it is the gateway to deciding whether and how to require financial protection; for contractors, it is the notice that they may need to furnish guarantees, bonds, collateral, or insurance as a condition of award or performance.

Definitions.

FAR 28.001 provides the core definitions used throughout FAR Part 28, which governs bonds and insurance. This section defines the key terms that control when and how bid guarantees, bonds, sureties, powers of attorney, consent of surety, penal sums, and reinsurance are used in federal contracting. It also clarifies who counts as a bidder, what counts as a bid, and the different bond types used in procurement, including advance payment bonds, annual bid bonds, annual performance bonds, patent infringement bonds, payment bonds, and performance bonds. In practice, these definitions matter because they determine whether a contractor has submitted a responsive bid, whether a surety is properly bound, what security the Government may require, and how bond obligations are enforced when contracts are modified or when a contractor defaults. Contracting officers, contractors, and sureties rely on these terms to decide what security is required, how much is required, and whether the submitted instruments are legally sufficient.

Subpart 28.1

Subpart 28.2

Subpart 28.3