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  • Question

    How long would the check referenced above need to be held by the agency? Would it be for the period of peformance only, or the period of performance plus the warranty period indicated by the contract (1-year in this case)?


    Answer

    The certified check accepted as an additional payment bond should be held until after final payment is made.
     
    The certified bank check is a form of payment bond IAW FAR 52.228-15(d). Without a payment bond, the Government could face multiple claims from suppliers and subcontractors for non-payment.
     
    In accordance with (IAW) FAR 28.001, a bond is a written instrument, executed by...a contractor and a second party...to assure fulfillment of the principle obligations to a third party (Government) identified in the bond...The bond insures payment... (5) a payment bond assures payment as required by law to all persons supplying labor or materials...in the contract.
     
    IAW with FAR 52.232-5(h) Final Payment. The government shall pay the amount due the contractor under the contract after--(1) completion and acceptance of all work... (3) presentation of release of all claims against the government   arising by virtue of the contract...
     
    The contractor has performed IAW the contract. The performance has been inspected and accepted. The contract has presented a final payment request with a release of all claims. Therefore, no claims from suppliers of labor or materials will be entertained. The bond in the form of a certified check can  be released.
     

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