FAR 52.228-11—Individual Surety—Pledge of Assets.
Plain-English Summary
FAR 52.228-11, Individual Surety—Pledge of Assets, governs what happens when a contractor uses a person rather than a corporate surety to back a performance bond or payment bond. It requires the contractor to obtain a qualifying pledge of assets from each individual surety and to collect Standard Form 28, Affidavit of Individual Surety, so the Government can evaluate the surety’s eligibility and the adequacy of the pledged security under FAR 28.203-1. The clause also explains how long the pledged assets must remain in place, which varies depending on whether the contract is a construction contract covered by the Miller Act, a contract subject to alternative payment protection, or another type of contract. It further addresses when the contracting officer may release part of the security interest for a performance bond after substantial performance, and when pledged assets supporting a payment bond may be released to a subcontractor or supplier based on a court judgment or sworn claim with surety authorization. Finally, it allows the contracting officer to approve substitution of an individual surety after award, provided the contractor meets the clause’s requirements within the time set by the contracting officer. In practice, this clause is about protecting the Government and unpaid subcontractors or suppliers by ensuring that individual surety arrangements are real, properly documented, and maintained for the required period.
Key Rules
Pledge must meet FAR standards
Each individual surety must provide a pledge of assets that satisfies the eligibility, valuation, and security requirements in FAR 28.203-1. The contractor must also obtain SF 28, which gives the Government the information needed to assess the surety and the pledged assets.
Performance bond assets may be partially released
The contracting officer may release part of the security interest on the individual surety’s assets when the contractor has substantially performed its obligations under the performance bond. This is discretionary and depends on the facts and the contracting officer’s judgment.
Performance bond retention periods vary
The pledged assets supporting a performance bond must remain in place for different periods depending on the contract type: for covered construction contracts, until completion of the warranty period or 1 year after final payment, whichever is later; for contracts subject to alternative payment protection, for the full performance period plus 1 year; and for other contracts, until completion of any warranty period or 90 days after final payment, whichever is later.
Payment bond release rules are specific
Assets pledged for a payment bond may be released to a subcontractor or supplier when the Government receives either a Federal district court judgment or a sworn statement from the claimant that the claim is correct, together with a notarized authorization from the surety approving the release. This clause creates a controlled path for paying valid claims from pledged assets.
Payment bond retention periods vary
The security interest supporting a payment bond must remain in place for different periods depending on the contract type: for covered construction contracts requiring performance and payment bonds, for 1 year after final payment or until all pending claims filed during that 1-year period are resolved, whichever is later; for contracts subject to alternative payment protection, for the full performance period plus 1 year; and for other contracts, for 90 days after final payment.
Post-award substitution is allowed
The contracting officer may permit the contractor to substitute an individual surety after award for either a performance or payment bond. If substitution is allowed, the contractor must satisfy the clause’s pledge and documentation requirements within the timeframe set by the contracting officer.
Responsibilities
Contractor
Obtain from each individual surety a pledge of assets that meets FAR 28.203-1 and collect SF 28 from each surety. Maintain the required surety support for the full period required by the clause, and comply with any deadline the contracting officer sets if an individual surety is substituted after award.
Individual Surety
Provide a valid pledge of assets that is eligible, properly valued, and sufficiently secured under FAR requirements. Complete SF 28 and keep the pledged assets available for the required retention period unless the Government lawfully releases them.
Contracting Officer
Review the individual surety arrangement for compliance, decide whether to release part of the security interest after substantial performance, determine whether to allow post-award substitution of an individual surety, and set the timeframe for the contractor to satisfy the clause after substitution.
Government
Maintain the security interest in pledged assets for the applicable retention period and, for payment bond claims, process release of pledged assets only when the clause’s documentary conditions are met, such as a court judgment or sworn claim with surety authorization.
Subcontractor or Supplier
If unpaid, may pursue release of pledged assets supporting a payment bond by providing a Federal district court judgment or a sworn statement that the claim is correct, together with the surety’s notarized authorization approving the release.
Practical Implications
Contractors cannot treat an individual surety like a simple signature on a bond; the asset pledge and SF 28 are mandatory and must be compliant from the start.
The retention period is not one-size-fits-all. Teams must track whether the contract is a Miller Act construction contract, an alternative payment protection contract, or another contract, because the release date changes.
Contracting officers have discretion to release only part of the performance-bond security after substantial performance, so contractors should be prepared to document progress and justify the request.
Payment-bond asset release is tightly controlled. A subcontractor or supplier cannot simply demand payment from pledged assets without the required court judgment or sworn claim plus surety authorization.
Post-award substitution of an individual surety is possible, but it is not automatic; missing the contracting officer’s deadline or failing to complete the required documentation can leave the contractor noncompliant and at risk of default or other remedies.
Official Regulatory Text
As prescribed in 28.203-4 (b), insert the following clause: Individual Surety—Pledge of Assets (Feb 2021) (a) The Contractor shall obtain from each person acting as an individual surety on a performance bond or a payment bond— (1) A pledge of assets that meets the eligibility, valuation, and security requirements described in the Federal Acquisition Regulation (FAR) 28.203-1 ; and (2) Standard Form 28, Affidavit of Individual Surety. (b) The Contracting Officer may release a portion of the security interest on the individual surety's assets based upon substantial performance of the Contractor's obligations under its performance bond. The security interest in support of a performance bond shall be maintained— (1) Contracts for the construction, alteration, or repair of any public building or public work of the Federal Government exceeding $150,000 (40 U.S.C. 3131) . Until completion of any warranty period, or for 1 year following final payment, whichever is later. (2) Contracts subject to alternative payment protection (see FAR 28.102-1 (b)(1)) . For the full contract performance period plus 1 year. (3) Other contracts not subject to the requirements of paragraph (b)(1) of this clause . Until completion of any warranty period, or for 90 days following final payment, whichever is later. (c) A surety's assets pledged in support of a payment bond may be released to a subcontractor or supplier upon Government receipt of a Federal district court judgment, or a sworn statement by the subcontractor or supplier that the claim is correct along with a notarized authorization of the release by the surety stating that it approves of such release. The security interest on the individual surety's assets in support of a payment bond shall be maintained— (1) Contracts for the construction, alteration, or repair of any public building or public work of the Federal Government exceeding $150,000 which require performance and payment bonds (40 U.S.C. 3131) . For 1 year following final payment, or until resolution of all pending claims filed against the payment bond during the 1-year period following final payment, whichever is later. (2) Contracts subject to alternative payment protection (see FAR 28.102-1 (b)(1)) . For the full contract performance period plus 1 year. (3) Other contracts not subject to the requirements of paragraph (c)(1) of this clause. For 90 days following final payment. (d) The Contracting Officer may allow the Contractor to substitute an individual surety, for a performance or payment bond, after contract award. The Contractor shall comply with the requirements of paragraph (a) of this clause within the timeframe established by the Contracting Officer. (End of clause)