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  • Question

    FAR 28.106-3 specifies the use on SF 1415 when additional bond coverage is required and FAR 28.106-5 specifies the use of the SF 1414 when any contract is modified and no additional bond is required ... It is confusing as a increase in contract cost (i.e. modification) seems to be a form of "additional bonding" The question is what constitutes "Additional Bond Coverage", and which FAR Part is applicable to our construction modifications and why? Thank you for your assistance.


    Answer

    The following response is based solely on the question and background information provided. As we do not have all of the facts particular to your contract, program, and situation, we highly recommend you consult your Contracting Officer and Legal Office for guidance.
     
    Per FAR 28.106-5, a Standard Form (SF) 1414, Consent of Surety, shall be obtained by the contracting officer when a contract is modified IF (emphasis added) --
    (1) An additional bond is obtained from other than the original surety;
    (2) No additional bond is required and --
    (i) The modification is for new work beyond the scope of the original contract; or
    (ii) The modification does not change the contract scope but changes the contract price (upward or downward) by more than 25 percent or $50,000; or
    (3) Consent of surety is required for a novation agreement

    This points to a scenario where IF no additional bond is required, a contract price modification of 25% or $50k would still require a SF 1414.  As the scenario alludes to, there is potential for a contract modification which increases price, but would not require additional security/bonding.  For construction, the paragraphs located at FAR 28.102-2 indicate that the Contracting Officer may determine lesser amounts are adequate/practical.  See the clause at FAR 52.228-2 (paragraph “(c)”) for when the opinion of the Contracting Officer may dictate whether or not additional bonding is necessary.  In summary, if the Contracting Officer determines that no additional bonding is necessary, but the contract price is changed by more than 25 percent or $50,000, then a SF 1414 is still required.


    If additional bonding is required, and is secured in whole or in part by the original surety/sureties, then a SF 1415 is the correct form.  Therefore, a contract modification may be the trigger for whether or not a SF 1415 is required as it was for a SF 1414.  The primary difference is whether or not additional bonding/security is required.


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